Default is a word I have come to despise. The reason behind this is my youngest plays rugby league and every time we have a home game they default. It’s just too expensive for off island teams to come over. We are subsidized but they are not. So this article is a bit of a plug for much needed sponsorship so teams can come over and the kids can play.
Another style of default that I also dislike seeing is unarranged overdrafts and mortgage payments not being met. It is hard to get finance for people that constantly go into overdraft. The banks are happy if you have an arranged one, there are no problems there. If it is not arranged they will charge you fees and if you want to get finance I have to come up with a reasonable explanation for defaults on payments. Mindful is a word that a lot of people try to work with in everyday life. Why not be a bit more mindful about money. Most people work very hard to make money so it makes sense to think about how you spend it and what you do with it. Another way of being mindful about money is how you pay off your debt. I have had many people come into my office with the same statement. I’ve had my mortgage for years and it has hardly reduced. People get fixated on the best rate but rarely think about how to structure there mortgage so it reduces effectively. Banks make hundreds of thousands out of your mortgage, yes just one mortgage. The average Kiwi wants to be debt free in there mid 60’s and potentially earlier. So what is the best way to reduce your mortgage. Firstly you want to look at your short, medium and long term goals. If you have a young family you really don’t want to put yourself under pressure and stress so fixing at a short term might not work. However, having a portion revolving or floating may. When you have the extra money or get your working for family tax credits as a yearly lump sum which some people do you can put this on your mortgage. The other thing to be aware of is if you have fixed in for a long period some banks will allow you to pay off more without penalties. You need to look at the terms and conditions with your lender. So before you fix, float, refinance etc make sure you think about what you are doing with your mortgage as you actually work really hard for it. As with insurance you should review your mortgage on an annual basis and talk to a professional so that it is in line with your short, medium and long term goals. It may pay to contact your adviser or bank to discuss. Back to the little league, if anyone wants to sponsor the Rams little league we will shout about your company to the heavens and have some very happy young players.