If you’re finding it tough to manage your money, here are 10 easy money rules that might help you get back on the straight and narrow.
1. It sounds obvious, but NEGOTIATE A GOOD PURCHASE PRICE. Always be prepared to negotiate on the price of the property. We recommend a subtle approach, because selling agents are human beings after all, and have sold price evidence to support your argument to hand if you need it. Don’t ever rush into the process. If you’re nor confident about your negotiating skills, consider employing a buyer’s agent. If you’re bidding at auction, then you must know your limit before arriving and always, always stop there. If you can’t afford it now you won’t be able to afford it if your hit upon hard times and the stress alone will be tough to handle!
2. Follows on from the above. Do your research and have a solid understanding of why the property is worth what it is. You must do your valuation beforehand so that you negotiate confidently. If you don’t know for sure what the property is worth then you’re more likely to overpay or miss out because you’re offering too little.
3. If you’re buying an investment property then always have a property investment plan. Don’t just buy on a whim. Make sure the property you’re about to purchase matches your risk profile and future plans. If you’re not sure, then speak to a qualified property investment adviser, such as the team at Adviseable. They will help you assess cash flow and make sure that the property is right for you and your circumstances.
4. Never fail to have a building and pest inspection done. They only cost a few hundred dollars and are worth their weight in gold. They can give you the confidence to proceed as planned, or highlight some issues that can give you ammunition with which to negotiate further on price . You might even dodge a bullet.
5. Try and set a household budget and stick to it. While this may sound like a simple idea, it’s a little scary how many people genuinely have no idea what they’re spending on groceries, or entertainment or the like. It can be just a simple excel spreadsheet, but track your expenditure and make sure you’re not spending more than you earn.
6. Once you’ve completed the household budget, see where you can save money, be ruthless with yourself, without denying yourself everything. If you feel like you’re not getting ahead then set aside a percentage of your income each time you get paid, and set it aside immediately. Ideally divert it straight into a savings account so you don’t even miss it. Even if it’s just a small amount to begin with, make a start and start the routine.
7. Save to invest, and invest to retire. Being ruthless continues. Give something up so that you can divert more of your earnings to savings. Cut back on as much non-essential saving as you can, and put all of these savings into your mortgage or towards your investment plan.
8. If you’re investing in property then always make sure that you have a cash buffer in place that can help you see through any financially tough times you might go through. Talk to your financial planner about what an appropriate amount might be for you, and make a plan to have this money put aside so you can sleep at night, knowing that your expenses will be covered for a few months in case you lose your job, or your property needs urgent repairs.
9. Always make sure that you have the appropriate insurance in place to cover you, your income, your assets and your family. So many people insure their cars and their travel and their homes, but they don’t insure themselves. Talk to an independent broker about insurance cover that will cover your expenses if you find that you can’t work. While this may seem like an extra expense that you didn’t have before, it can be a life saver when you and your family need it most.
10. Talk to an independent mortgage broker about your current loan structure, and see what they can do to save you money, either by refinancing, or by tweaking your interest rate. This can literally save you thousands. Do not be loyal to the bank, they will certainly not be loyal to you. Think of your future as a business and take charge of it.
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