Slash & Burn Your Mortgage

Use the MoneySMARTS virtual Flour Jar categories to calculate your income and expenditure. Identify discretionary spending and areas where you can cut back to increase your surplus income.

Categorize your regular spending, credit card expenses, direct payments, loans, and planned provisions spending. Analyse each category to determine where you can save more and increase your trapped surplus money.

• Living and Lifestyle Expenses: Try and identify non-essential expense items in this category. By cutting back on these, you could save extra per week, which could be used towards your goal.
• Credit Card Expenses: Keep your bill spending down and shop for better deals! A common one is negotiating phone bills to get better deals with your telco provider.
• Bank Fees and Accounts: Though your bank fees might seem higher, professional packages often include valuable benefits. Shop around using a Mortgage Broker and consider various factors such as interest rates, borrowing power, credit policy, and more.
• Loans: If you have both a mortgage and car loan, consider consolidating your car loan into your mortgage, but only if it provides financial benefits like interest savings or releasing surplus money for investments with better returns.
• Planned Provisions Spending: If you have some flexibility in planned provisions spending, target specific areas especially for holiday and gift items. Make sure your spending is really optimised in these provisions.
• Primary Account: You have a money surplus, and the trapped surplus money will continue to build up in your 100% offset Primary Account, reducing interest costs. Consider paying down debt more aggressively if you want to tighten your budget further, but make sure not to stretch yourself too much.
• Banking: Convert all accounts into 100% offset accounts linked to your mortgage, or transfer the money out and close those accounts. Your Living & Lifestyle Account can be set up as an additional offset account, and you can apply for two debit cards linked to this account. Decide which credit card will be your active card, and keep the second one only for emergencies without fees if you pay it off every month.

How can Moorr Help?: Let’s track your spending!

1. Get a copy of your bank statement for the last 12 months.
2. Start categorising and get your calculator ready! If you’re wondering how to categorise from a statement, it might be best to have it in an Excel spreadsheet first, and then transferring it to Moorr.
   • Regular spending – Ideally it’s best to go back and look over bank statements and credit card statements from the past 12 months to get a clear picture of where all your money goes. (Getting your numbers as accurate as you can might take a bit of effort now, but you will be glad when you’ve done it, because it will mean a lot less work when you have MoneySMARTS up and running.) Note the monthly average in your Excel sheet. We’ll transfer it to Moorr soon.
   • Provisioning spending – Think about the big things you plan to spend your money on over the next year. It could be anything from replacing your couch to spending on gifts. Document what these planned expenses are for the coming year.
3. Go to the Bills & Spending section in Moorr and enter what you have recorded.
4. Next, go to the MoneySMARTS Dashboard and enter the provisions.

Once you’ve completed all this, check out your Dashboard in Moorr! This is the coolest part because it tells you how much surplus you have and more. It’s like a profit and loss statement. If the dashboard shows that you should have a surplus in place, but you don’t, it means you may have overestimated your income or underestimated your expenses/repayments. Make sure to check and update accordingly.

This could be a reality check, but use this opportunity to motivate yourself!

For Step 4, you might remember that we mentioned combining your finances by setting up a joint bank account. Additionally, leveraging our years of experience in money management and insights from the thousands of users we’ve served, we’ve incorporated our account structure recommendations for each category of bills and spending. Please note that this is a general recommendation based on all our users and MoneySMARTS, and may not be customised to your unique spending habits. So, feel free to tweak it as you see fit.

Once you’ve reorganised your banking structure, make sure to update it in Moorr!