Basic financial advice

I didn’t expect to ever offer anyone financial advice, but here we are. Some very simple tips that will hopefully help if you’re in the mid-life stage I find myself in.

1. Get a mortgage with an offset account. Not every bank offers this, but many do.

2. Put all your family’s income directly into this offset account. The balance effectively comes off your mortgage instantly for interest calculations, and you’ll therefore pay a lot less interest. If your mortgage payments are made directly from this account, it no longer matters if you pay weekly, fortnightly or monthly, because the money counts against the mortgage both before and after a payment is made.

3. Use a credit card for most purchases, but be sure to (automatically) pay off the full amount each month so you don’t incur any interest. That way, your money will sit in your account longer, paying off your mortgage for as long as possible.

4. To be safer, use a separate account for PayPal and for receiving payments, and don’t keep much (or any) money in it.

That’s it. The basic idea is that it’s better to avoid paying interest than it is to earn interest you have to pay tax on. Hope it helps.