Saving a dollar is worth more than earning the same dollar – Why?

How many of us get excited about purchasing our first home, or even our new family home?  We arrange the loan, settle on finance and move in – awesome! The change is great, the family are happy, the excitement is overwhelming.   All care has been taken to ensure a good purchase price, competitive interest rate and suitable loan product.  We may even feel like we understand the market, have a good handle on how the banks work and have calculated our loan repayments down to the dollar.

What we forget to do though is review this loan, like we review our insurance and electricity accounts. Our home loan should be reviewed just like any other family bill.  We are all too focused on earning our overtime and perhaps even working on Sundays just to pick up that penalty rate.   We are heard cancelling dinner dates and away weekends as “finances are a little tight”.   We are heard telling the kids that we can’t afford that this year, “perhaps if dad picks up another few shifts”.  The credit card gets a little beating now and again and things start to really tighten up.

At what stage have we realised that saving a dollar on our home loan, is actually worth more than the dollar we earn…?  Why?  Because we are paying tax on the dollar that we’re earning.  For every dollar we earn, we might pay 32c tax (subject to taxation rate).  So for every dollar we need on our home loan, we actually need to earn $1.32. Multiply this now on say $200.   This means that for every $200 that we DON’T save on our home loan, means that we are having to earn an extra $262.

WOW! Perhaps looking at saving money on our home loan is worth more than we thought?

So why don’t we refinance?  Perhaps we think we’re on the most amazing deal that can never ever be beaten?  Perhaps we couldn’t be fussed to pull out bank statements and payslips?  Perhaps we need a broker who can guide and walk us through the process?

Just a few of my reviews : www.moneyquest.com.au/mermaidwaters

• “5 stars!!  Amanda at Money Quest is amazing! Our home loan is approved because of her hard work and knowledge as a broker! Our family is forever grateful and ever so happy to be in our own home. Amanda has our full recommendation. THANK YOU ! ” – Courtney Curtis

• “Mandy helped us purchase our dream home in our dream location.
  Owning my own home in Nobbys walking distance to the beach is something I thought would happen around the age of 40.
  You are the best, we literally couldn’t have done it without you!!!!!” – Tim Windisch

• “Mandy has been an invaluable asset during our first home loan application . She ran through the whole process from start to the absolute finish and kept us up to speed with the entire progress – even whilst she was on holiday!! Her efficiency, knowledge and guidance made the whole process simple and easy. I can’t recommend her enough. Thanks Mandy” – Emily Gallagher

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