With the property market the most vulnerable to a fluctuating interest rate environment, fixed rate mortgages may be the best way to manage increasing interest rates, especially for the low cost residential property market.
Fixed rate deals allow buyers to budget for the short and medium term, protecting them against rising interest rates. And your monthly repayment stays the same for the term that you have fixed it for, even if interest rates rise or fall. A fixed rate is set for a number of years. Most people choose fixed rates for between one and five years.
Predict it
Try to anticipate situations as far as possible by buying little bits throughout the year. Stock up on cheap stationery when there are sales or specials so that when the new school year begins you don't have to pay premium "back to school" prices. Same goes for birthdays and special occasions – always look out for great deals and store the gifts for when you need them. When you shop for a gift on the last minute you are more-likely to overspend on an impulse buy.
Save it
If you are lucky enough to finish paying off an instalment sale, loan or monthly expense, don't absorb what you would have paid into your daily spending, set it aside in a savings account instead. If you have a young child, take that money and put it towards their education.
If you have a child who has just become employed and he or she is living at home, charge them rent! It is not an unfair request since you have selflessly supported them for the last 18 to 24 years. You can boost your retirement savings and pay off debt in this way. Or if you really want to be generous, put their money aside to help them buy a home of their own one day.
Control it
Most people are affected by our current economic climate. The best thing to do is to just stop spending. It's as simple as that. Stop spending as much as possible or face losing all of your possessions and being blacklisted for the next five years.
For every downward debt spiral there is a point or a stage where you purchased an item on credit and felt uncomfortable about it. If you stop spending at that moment and take stock of your debt, there's still time to turn things around.
Don't let this happen to you! Stop the cycle and regain control. Pretend you have lost your income for a few months and see how little you can get by on. Use the money you save to pay off debt. You will feel so much better, in control and be richer for it.
