I returned this week from six blissful solo nights away in a cabin in the woods, where I meditated, cooked nourishing curries, listened to Dolly Parton and slept. Oh, did I sleep!Being me, I also packed my household budget binder and spent some time quietly reflecting on my annual budget.But while I was away, our Reserve Bank governor, Phil Lowe, has been cooking up other plans for my emotional state this financial year.
After nearly two decades of observing interest-rate rises from the sidelines as a dispassionate and renting journalist, I now find myself a cog in the wheel of the official “transmission mechanism” of “monetary policy”, under which borrowers are squeezed like lemons to bring about a slowing in demand and price pressures the central bank deems appropriate.
A degree of fear about what is to come is, in fact, the precise emotional response Lowe is hoping to elicit in borrowers. Joblessness is at its lowest in nearly half a century and, so long as you keep your job, you have an income to keep funding your mortgage. If the cash rate goes to 3 per cent, I’ll be out of pocket by an extra $932 a month. And so forth. At some point, my monthly budget surplus of about $1500 would be extinguished, and I’ll need to take action.Worst-case scenario, I could stop contributing extra to my superannuation, despite that strategy offering some of the best tax breaks in town.
Jess_Irvine Given your desire not to part with private school fees, would you be able to present an economic argument in support of this?
Jess_Irvine Refinancing bonus’s are great too. Plenty are offering 4-$5000 to bank with them. That can take off 6-9 months on interest rate rises
Jess_Irvine SELL SELL SELL SELL and SELL
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