Yahoo Finance 7 easy money resolutions to change your life - not just your 2024
Forget the gym, here are Nicole's key financial 'cheat' codes.
In a fresh new year, you’re probably thinking along the lines of eating less, spending less, exercising more, saving money, etcetera. But there is a far simpler way to start the new year right.
I wouldn’t call mine the cheat’s way but, year in, year out, I see people working far too hard rather than working the money system. In other words, they don’t take advantage of all the free economic kicks out there.
Here are the seven ways to get an easy money edge in the next year and beyond.
Easy money resolution 7: Start paying your mortgage fortnightly
Whatever you do, don’t go to the bank and ask to pay fortnightly – they’ll sabotage your savings. Simply make half your monthly minimum, each fortnight. I won’t bore you with why, but this will put you a whole month ahead every year. On a $400,000 mortgage at an average 5 per cent interest rate, you’ll save $48,000 and 3.5 years.
Also by Nicole Pedersen-McKinnon:
Easy money resolution 6: Stop paying money directly INTO your mortgage
By doing this you’re running the risk that those extra payments will be subsumed - as in, locked away from you if you need them. The only safe way is to make over-and-above repayments into a parallel offset account. Your interest saving is the same.
Easy money resolution 5: ‘Load’ your expenses onto a 55-day interest-free credit card
There are two reasons to do this:
You can sit your salary in an offset account beside your mortgage for the month so it slashes your interest
You can turn your expenses into powerful points because who's in a position to pay a fortune for travel right now?
Of course, pay the interest-free credit card off in full - from the offset account - at the end of every month.
Easy money resolution 4: Refuse to pay credit card interest
There is no need for this. The dirty little secret of the banking world is that the average credit card still charges 17 per cent interest while the best is 7.49 per cent. But you shouldn’t even be paying that - if you carry over some debt (the idea is to clear the card above every month from your offset account), you need to park it at 0 per cent interest, which is still available for up to 32 months.
Easy money resolution 3: Think of ‘future you’ and put free money into your super every year
If you are in a couple and one person earns less than $40,000, you should be paying $3,000 each year into their super - it will get you a $540 tax offset, which means a tax discount.
If you're working but earn less than $58,445, paying in just $19.25 a week could score you a free cash boost to your super of up to $500, which - if done every year - could boost your end balance by $185,019 (for 30-year-olds). Or you could let the government keep all this money.
Easy money resolution 2: Consider going to cash for your FUN stuff
I did this for the first three months of 2023 and cut my discretionary spend by 35 per cent. Do it before the currency goes completely digital and watch what happens - just the inconvenience might see you save.
Easy money resolution 1: Get private health
If you earn more than $93,000 a year as a single, or $186,000 as a couple, get private health. You’re paying for it anyway in the form of the Medicare Levy Surcharge, a tax penalty of as much as 1.5 per cent - it’s $930 on $93,000. So get medical coverage.
Finally, know that a mortgage refinance today saves an instant average $618 per month.
In 2024, make life EASIER!
Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, Twitter and Instagram.
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