Tuesday, November 29, 2011

Stop saving and start saving

Most of us have a savings account where we put money away. $20, $50, $100, $200 per month – the amount vary, but most of us try to save for the annual holiday or for Christmas or just for a rainy day. Well – if you put money away for a rainy day - it’s time to realise that it’s pouring with rain right now!

If you are saving for a specific thing such as a holiday, a new car, a new outfit – great! Keep doing so, but if you are just saving for the sake of it (because your mum told you it was good to save) try switching the regular saving into a regular additional home loan repayment.

Think about it. What are you really saving for? Your future? Financial Independence? And what better way to invest in your future that to be debt free quicker?

That extra $100 per month that normally goes into the saving account could save you over $70,000 in interest payments and could mean you are debt free 4 years sooner. Now wouldn’t that be nice?

It’s not the best option for all. Some of us like to know that there is a lump sum in the bank to fall back on in case of emergencies, but it’s certainly worth thinking about!!