Managing your money from your 30’s to 50
Often our 30’s and 40’s is the most expensive time of our life’s and often the time when we are carrying the most debt. During this period we usually go through some significant life events like:
- Getting Married
- Buying a House
- Having Children
- Renovating your House
With these events come added expenses such as:
- Food & Clothing
- School & Day care fees
- Higher utilities bills
- Vehicle purchases and maintenance
- House maintenance
To cover a lot of these expenses from time to time you need to borrow money. Below we are going to go through some of the traditional borrowing methods and how to best use the borrowing options available.
Paying of high interest debt using a Debt Consolidation Loan
What we mean by high interest debt is credit cards & payday loans which are quick to access, easy to use and top up. Credit cards are great if they are used right but most of us fall into the trap of paying the minimum payment and living at the maximum limit. As for payday loans the repayments can often be so high you need to keep topping up your loan to cover living expenses.
A great way to do this is a debt consolidation loan, this will allow you to combine multiple debts into one easy loan repayment. A coupe of tips when doing a debt consolidation loan are:
- If you are struggling making you existing repayments a debt consolidation can make your repayments more affordable.
- To help reduce your debt faster rather than paying the loan over a longer term, how about doing a debt consolidation and keeping the repayments the same as the total payments for the multiple loans you were paying.
Most long-term lenders like Pioneer Finance can also offer same day top ups on existing loans, similar to a payday lender but with far lower interest rates and fees.
Currently we are seeing some of the lowest mortgage interest rates in New Zealand history. It is also a time where many people can get caught out when interest rates rise again. You can also take advantage of this time to really make some in roads to paying off your mortgage sooner.
Many people that took out a mortgage 5 years ago will remember floating interest rates around 6.50% and fixed interest rates around 5%. Now you are looking at 4.50% for floating and 3% for fixed. One trick to paying your mortgage quicker is leave your repayments the same as if the interest rate was 5%.
$400,000 @ 5% over 30 years repayments are roughly $2,147
$400,000 @ 3% over 30 years repayments are roughly $1,686
At 3% if you leave your repayments at $2,147 you could save $68,086 and reduce your mortgage by 9 years. You have been paying the higher amount fine already why not leave the payments the same.
Even if you have defaults on your credit history or don’t have the best repayment history there are plenty of non-bank lenders who may be able to help you. If you are looking for options and want to talk them through with someone we suggest our sister company Finance People.
You can visit their website at www.financepeople.co.nz
Finance for short-term needs with a Pioneer Finance Personal Loan
What we mean by short-term needs are things like Cars, Car repairs, holidays, Funerals, minor home renovations and general living expenses. All these things you could add to your mortgage, but you would then use up your equity which could be used for larger renovations, buying a bach or upgrading your house.
Adding these debts to your mortgage could also mean you are repaying a short term need over 20-30 years, meaning you would have paid much more interest than using a short term lender.
You can find out more information on our Personal Loan page
Budgeting for the future
Often forgotten but an important part of life is knowing what your budget is and sticking to it. By completing a budget and sticking to it you can achieve your financial goals. Completing a budget will help you see where you are spending your money and areas you can cut back on.
Try using our Instant Finance Budget
We hope this information has been helpful and below are other helpful links