The Reserve Bank of Australia has slashed the cash rate to a record low of 2%. This means that if you’re a homeowner, with a variable rate home loan, your monthly disposable income is going to see a rise, as long as your bank passes on the full cut. See here to find out if your lender is being naughty or nice.
How much will depend on your loan amount but on a 25-year, $300,000 mortgage at an average interest rate of 4.93%, you will now save $44 on your monthly mortgage payment. Now that’s something to celebrate, isn’t it?
The RBA usually cuts the cash rate because it wants you to increase your spending and accelerate economic growth.
One of the wisest things to do with this extra money would be to continue with your repayments as usual. By doing this, the average homeowner would save about $11,160 in interest and pay off the mortgage 13 months before time. That’s pretty good incentive.
But, if you’ve been itching to have a bit of a splurge, here are 10 fun ways to do it:
- Plan a movie night: Plan a date night with your partner and go watch the latest movie at the local cinema. Don’t get stingy about the drinks and popcorn.
- Buy a bottle of bubbly: Cheap wines are nice, but why not pop a bottle of bubbly to celebrate your extra income.
- Donate to charity: Do your good deed by donating your bonus saving to the local charity. Whether it’s for the environment, for the kids or the animals, pick a cause you feel strongly about.
- Go to the salon: Head to a spa and get yourself a manicure and pedicure. Like they say, if you look good, you’ll feel good.
- Get a massage: Take some time off and pamper yourself with a quick massage. You’ve earned yourself some time for relaxation.
- Accessorise: Splurge on some spontaneous retail therapy and buy yourself a new scarf, a belt or earrings that will add that extra spark to your look.
- Visit the bookstore: You could buy e-books too, but it’s always nice to visit a bookshop, soak in the smell of new (or second-hand) books and buy yourself a pile of reading material you’ve been meaning to catch up on.
- Buy a storm umbrella: Ever heard of ‘saving for a rainy day’? Well, seeing the extreme weather these days, we suggest you buy a sturdy storm umbrella. The cheap ones are good when you’re caught unprepared but it’s better you buy a strong one to get you through the winter.
- Get winter kitchen accessories: Buy some beautiful soup bowls or add this cute Loch Ness kitchen ladle, which would be perfect for pouring out that hot soup.
- Buy someone a gift: You don’t always have to wait for birthdays or anniversaries to buy presents. Buy a loved one an unexpected gift and share the good luck. See here for ways to pay it forward.
So how are you going to spend that extra money? Don’t forget to share your plans with us!