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Money Saving Tips
To Pay Off Your Loan Sooner!
Nobody wants to be paying off a home loan forever- or any other kind of loan.
One of the best ways to pay off your loan faster is to make extra loan repayments.
You might be thinking "We can't afford to pay anything more than the actual home loan repayments!" But is this really true?
In most cases, significant amounts of money are frittered away, little bit by little bit. How much do you spend each week on the small things... things you think don't really matter and wouldn't be much use in helping reduce your loan? You might be surprised!
Try this little exercise- for a week, keep a little notebook with you, and every time you spend money- no matter how small, or on what- record it. Stick to your normal spending. Don't try to cut back, or you'll only be fooling yourself! Now look through the list.
Cross out all the things that are really essential (but read the suggestions below first, before you decide on what is essential), and add up the costs of the non-essential "could do withouts".
Next, think about other expenses that might be paid direct, or by credit card- are some of them really non-essentials? How much does all this add up to?
Add them together.
So... how much money could you manage to save and put into your loan each week, just from these little savings? Makes you rethink it, doesn't it?! You can cut years, and thousands of dollars off your loan, just by making small extra repayments.
There are lots of good loan repayment calculators on the internet, so why not use one of those to see how many years, and how much money, you could save by doing this.
Below are some simple things that you can do to gain some extra money to put towards your loan:
- Take a packed lunch and snacks to work- buying food and drink every day can add up immensely!
- Don't stop at the cafe or snack bar on the way to or from work for that coffee- and stay out of the pub!
- Can you cut back on buying junk food- like chips, lollies, soft drinks, beers, biscuits etc- and do both your wallet and your health a favour?
- Cut back on eating out and buying takeaway. Plan your meals in advance, and make sure you have the right ingredients on hand, so you're less tempted to go for an easy solution.
- If you go out to the movies or any other outing, take your own snacks and drinks. Prices at those kind of places are almost criminal!
- Could you enjoy free activities on your outings, instead of movies or pay to enter venues? Or how about entering competitions to win movie tickets so you can go free!
- Catching the bus to work may work out cheaper. Or walking, if you're close. Or why not see if anyone would like to carpool?
- Help the environment too, by using less resources- and paying lower bills! Turn lights off when not in the room, replace globes with power saver fluoro tubes, don't leave electrical items on stand-by, have shorter showers (or share a shower with your partner), if you need to buy new equipment look for good energy efficiency rating, put more clothes on instead of running a heater, use a fan for cooling if it's not too hot instead of an air conditioner.
- Do you really need some of those regular charges such as a daily newspaper (is there one at work you could read, or drop into the library- instead of the snack bar!), or Pay TV (watch free to air TV or do something more productive with your time)? Maybe you can do without for a while.
- If you smoke or drink- STOP- Just think of how much you spend on these habits, and how many years sooner you could own your home if you put this money towards your home loan instead! And you might even live long enough to enjoy it!
- Do you have unwanted items you could sell?
- Do you really need that latest gadget, new TV or car yet?
- Can you get a part time job, or work from home? Maybe pamphlet deliveries? Caring for pets or gardens while people are on holiday? Odd jobs? Typing up resumes or other documents?
- If you are handy on the computer, and preferably have broadband internet access, money making opportunities abound, including many ways which do not require you to personally sell anything, nor spend much, if any money to begin. But, be careful to fully research the possibilities and don't get conned into a scam- there's plenty of those too!
If you would like some suggestions for some legitimate ways to make money online, feel free to check out this article we wrote > Make money online legitimately. We do not endorse, promote or run any of these opportunities- this will just be unbiased advice, and some pointers in the right direction!
These are only a few generic suggestions. You can no doubt come up with lots more, specific to your own situation. So get your financial thinking cap on... and start getting that loan paid off in record time!
To be of real benefit, these extra loan repayments need to be taken off the principle, not the interest, so make sure you specify this to your lender, when making them. You should try to get a loan that allows unlimited, unrestricted extra repayments, and that doesn't charge fees if you pay out the loan early.
May you soon be happy in the full ownership of your castle!!
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