The last time the Reserve Bank hiked rates, the Bowden family were caught short and had to scrape to make their finances work. They’re better prepared today. Picture: Jason Edwards.
For Georgia and Tim Bowden a Reserve Bank decision to raise home loan costs today will likely mean less time with their kids.
The family of four learned from a “hard wake up call” during the nation’s last run of interest rate hikes that having Ms Bowden taking reduced wages from her healthcare job to extend her maternity leave for daughter Olivia, was a risk they weren’t willing to take with the birth of son Toby, meaning she had already had less time to bond with him.
Tim has also had to go back to five days a week working as a teacher instead of four as a result of the prior hikes, and another will likely mean cutting back to get more time with his young children would not be feasible.
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“I feel like the last interest rate hikes were a hard wake up call … we had to pay ahead and learn more about how to get ahead, like paying weekly instead of monthly,” Ms Bowden said.
“It was a hard adjustment, but if we didn’t do that we would probably still be making the minimum monthly repayments and not have as much of a safety net.”
She added that it would be good if alternative means to address inflation could be pursued.
Among the tricks they’ve picked up to cope with rising mortgage costs are paying in advance so they have a buffer in an off-set account, and paying weekly which minimises interest costs.
For the Bowden family, a rate hike will mean less time together as a family — and more time working. Picture: Jason Edwards
“In our day to day living we will be OK, but we had goals for other things, we had hoped to start travelling overseas with the kids, but that will have to be pushed back,” Ms Bowden said.
“It will be more our children and their generation who are not getting as much time with their parents”
Commonwealth Bank of Australia everyday banking executive general manager Monica Wegner said homeowners should be taking proactive steps to get ahead of their mortgage.
Better money management through online tools could help ensure better savings balances, and as a result better financial resilience.
The bank also offers a Financial Fitness program to the public, not just their own customers, aimed at boosting financial skills around savings and managing expenses via reviews of purchasing behaviour.
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