Homes

Top 3 home finance tips

RE/MAX of Southern Africa shares their top 3 home finance tips to help homeowners set up good money habits.

After well over a year of record high interest rates, homeowners might be feeling desperate to find ways to lessen the financial strain. While household finances cannot be rescued overnight, there are ways to start forming better money habits that will allow homeowners more financial freedom over time.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, is hopeful that we have reached the end of the interest rate hiking cycle and expects that an interest rate cut might even be around the next corner.

“We should hopefully be entering into a slightly more stable economic period than we were in last year. If this is the case, this will offer homeowners an opportunity to form better financial habits and to keep on top of their debt levels so that they will be better prepared for any future economic downturns,” says Goslett.

To help homeowners set up good money habits, RE/MAX of Southern Africa shares their top 3 home finance tips…

1. Budget for upcoming expenses

So much financial stress can be avoided if adequate time is taken to plan for upcoming expenses. Apart from setting up a monthly budget where you list all your regular debit orders and expenses, consider what other ad hoc expenses will occur during the year, including things like car services, birthday presents, licence renewal fees, etc. Once you list all these expenses, come up with a plan on how to cover these costs so that you have enough time to save up rather than paying for these items on credit.

2. Set up emergency savings

No matter how carefully you have planned, unexpected expenses will always occur, from emergency medical bills to replacement costs for a broken refrigerator. To avoid having to pay for these items on credit, start building up an emergency savings account. Even if all you can afford is a R100 each month, every little bit can help build up the kitty over time.

3. Make extra payments towards your home loan

This habit is good for so many different reasons. Not only will it lessen the total amount of interest you will end up paying over the loan term, but it will also get you used to paying a higher amount on your home loan so that you won’t feel pinched if and when interest rates do go up.

“By implementing the above, homeowners will be putting themselves in a better position to withstand any future storms. The economy works in cycles, and for every up season, there will be a down season. The key to financial resilience is sticking to good money habits when times are good so that you will feel less pressure when times are tough,” Goslett concludes.

Writer: Kayla Ferguson

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