3 minute read
Nicole Pedersen-McKinnon’s Smart Money
Nicole Pedersen - McKinnon has always targeted big, beautiful things. Her money insights have appeared in The Sydney Morning Herald/Sun-Herald and The Sunday Age newspapers, and on all related websites, for more than 15 years. She is a regular on Channels 7, 9 and 10 and travels the country giving speeches and MC-ing events, including on multiple occasions at Canberra’s Parliament House.
Recent Fidelity research suggests that women want debt freedom - particularly when it comes to their home loan, so you may be surprised to hear that this financial literacy expert actually believes money is for spending - just not all at once!
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The fact that single 60-year-old women have the highest poverty rate in the country makes it vital to take control of our own futures, so Wise Girls Money Magazine chats with Nicole about getting mortgage free and taking charge of your money.
There’s a life-changing realisation when it comes to a mortgage: the quicker you pay it off, the cheaper your house will be. And I’m talking potentially hundreds of thousands of dollars cheaper. Say you take the full 25 years to pay off a $400,000 property at an average 5% interest rate, your home will end up costing you $702,000. But say you end up ditching your debt in just 10 years; the interest you pay will drop from $302,000 to only $109,000. It’s a circa $200,000 that YOU get to keep from the bank and spend yourself! What’s more, with interest rates at record lows, there is a once-in-alifetime opportunity to pay off debt cheaper and quicker than ever before.
Cutting Your Costs
More than 100 Aussies contributed their best, what I call, stingespiration for my book. The ideas range from clever to crazy. But the EASIEST ways to save are to simply cut the costs you believe to be fixed. There’s a very good chance you could slash in the vicinity of $7000 a year off your expenses by refinancing your debts, including your mortgage, and switching to better value utilities, telcos and insurance policies. And it doesn’t compromise your lifestyle!
Get Organised
Sorting your finances is not difficult, it’s just about organisation. An overhaul and audit of all of your so-called fixed costs [like above] is all it takes to make possibly $7000 in easy savings. Let comparison sites do the work for you to choose the best deals!
Debt Consolidation May Not Be For You
I sound a big warning about debt consolidation in my book. Even at a lower mortgage interest rate, if you spread a previously shortterm debt over a 25-year period, it will end up costing you a bunch more money. For credit cards, as 0% balance transfer deal is a far smarter strategy and gives you a window of opportunity, of perhaps 24 months, to get out of jail free.
The Power Of Compounding
MANY people think small amounts of money don’t make a difference but just $6 a day saved from the age of 20, at an 8% investment return, turns you into a millionaire by 65. And compounding can
equally work against you if you’re not EARNING investment returns but PAYING interest. That’s that enormous potential cost of the mortgage… or so-sweet-you-canalmost-taste-it saving.
Faster, Smarter, Cheaper
Bringing my book How To Get Mortgage Free Like Me to life was about the most fun a finance writer can have. So many inspirational Aussies entrusted me with their private and personal stories of how they’ve achieved the real Australian dream. We’re not talking doctors and lawyers but mechanics, fitness instructors and yes, teachers. But it’s one thing to get inspiration, it’s another to hear stingespiration. This is the word I’ve shamelessly made up for the hundreds of techniques Aussies also shared with me – and I with you – to painlessly cut their costs. Then there is the win-spiration that I contribute – the strategies and shortcuts that experts like me use to obliterate a mortgage smarter, faster and cheaper. I divulge everything and you might be interested to hear in advance that we ditched our debt in just seven years. YOU could too.
nicolessmartmoney.com
