4 savvy things to do for your finances before the RBA rate cut
Thursday 30 May 2019
It’s been one of the most talked about rate cuts in Australia and Reserve Bank of Australia watchers have been holding their breath for the past 3 years.
While the RBA came out of the 30th consecutive meeting since interest rates last moved having put another hold on rates, there is something in the air that says it’s only a matter of time before they’re cut to a historic low.
Besides putting in your bets with workmates and family about whether the RBA will announce an official rate cut next month or not, here’s a few things you should do before it impacts your finances, including when it comes to things like your travel budget, shopping and your home loan.
Stash away in a term deposit
If your rainy day fund is stashed away in a savings account, then the news of an RBA rate cut won’t be what you want to hear. You want to be earning the highest rate on your savings and even lower interest rates won’t help with that.
One way you can make sure your money goes untouched is by locking it away in a term deposit, where it won’t feel the weight of a rate reduction. As rates are already on a downward slide, it’s best you get in quick if you’re chasing a good deal.
Make any big overseas purchases
Before we have a moment of silence for all the empty virtual shopping carts, if you’ve had your eyes on those $500 sneakers from the US for ages, then now’s the time to whip out the credit card and make the purchase. For the same reason as above, a falling Aussie dollar on the cards means you won’t want to wait any longer to make overseas purchases online.
Review your home loan and consider switching if a better deal comes up
If it’s been a while since you’ve checked on how your home loan is getting along, why not take the opportunity to look at it before the RBA rate cuts, that way you’re ready to pounce if your lender doesn’t pass on the rate cut, but another one does.
So you have a head start if you do decide to refinance to a better low rate deal post-RBA decision, start looking at your options now by checking out our refinance home loan comparison table.
Lock in your travelling budget on a prepaid travel card
Travelling overseas? Since AMP Capital and InvestSMART are predicting the Aussie dollar could tank to at least US65 cents later this year if interest rates go any lower, locking in an exchange rate with a prepaid travel card sooner rather than later, means you won’t have to worry about the lower Aussie dollar hurting your holiday budget.
If you don't already have a prepaid travel card, head over to our prepaid travel card comparison table and compare your options.