03 May 3 Things You Should Do After The Latest Interest Rate Cut
Home owners and investors are very happy after yesterday’s RBA decision to reduce interest rates and so they should be. But what you plan to do with your savings is very important. Reading the paper today home owners were interviewed about what they would do with their savings and most people said they would relieve themselves of some pressure in the household budget (in other words spend it). Although this sounds like a wise thing personally I do not think it is.
Most people do not have enough money put away for a rainy day so if something was to happen to them and they could not work they would soon find themselves with big financial problems.
My top 3 things you should do with your savings.
- If you do not have at least 3 months (more is better) total living expenses put away then get to work on it, starting with taking the extra savings from the rate cut.
- Once number 1 is done eliminate any credit card and personal debts.
- Pay off your mortgage. One day the rate will increase again and if you get used to living a lifestyle based on 4% interest rates you will not have a roof over your head when things turn around. So keep paying your mortgage off as if you had your 7% home loan.
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