A Tip on the Road to Financial Happiness
One of the biggest economic impacts on both business and private costs over the last 12 months has been the drop in oil prices internationally which has resulted in lower fuel prices. The price per barrel has dropped from over $100/barrel down to $47/barrel. Watching Sunrise the other morning Craig James from Commsec stated that the flow-on effect was the equivalent of a .25% drop in interest for a person on a $350,000 home loan.
Given that the Reserve Bank yesterday dropped the official rate by .25% we should really be making sure that we are taking advantage of the current situation.
The old saying of paying down non tax deductible debt as your primary goal is never more true. I have not in my 40 years as an adult seen an economic environment where the opportunity to reduce debt has been more favorable. Yes there are some concerns on the job front with the end of the resource boom in Australia but with home loans at their lowest rates for a longtime and petrol prices way down from when they were above $1.50 to now (the lowest I have seen at 97.8 cents) it really is a great opportunity to reduce personal debt and set yourself up for the future.
If you take the 50 cents per litre on petrol and the quarter of a percent interest cut on home loans and put this against your credit card or home loan you are on your way to financial happiness.
These opportunities do not come along every day and it is very easy for us not to realise just how much this saving adds up when you take into account how not only can you reduce your debt but in doing so reduce the interest you will have on your reduced outstanding balance. It is a win win situation.
David Balwin
FCPA | Registered Tax Agent | Business Advisor
Balanix Solutions – Taxation | Accounting | Business Advise
Situated in Strathpine on Brisbane North, we partner with our clients to assist them in their accounting, business management and bookkeeping needs. Our clients vary in industries from professional services (such as law, vet and dentist) to the trades (mechanic, bricklaying, plasterer etc), hospitality and retail. Are clients are located in the Pine Rivers area (including Brendale, Lawnton, Albany Creek and Eatons Hill) through to Kallangur, Petrie, North Lakes and Caboolture, as well as Brisbane South, the Gold Coast and various other parts of Queensland.
