Consider an offset account for savings and seek advice down the track

QI am in my early 30s, bought my townhouse in August 2021 and have a fixed $320,000 loan with a 2.09% interest rate until August 2024 and a split loan of $6000 with 5.39% variable interest.

I live with my partner but his income is inconsistent, so I’m making repayments on my own. We are planning marriage and/or a child in the next few years.

I am unsure what is best financially between keeping money in savings (about $20,000), paying the extra $10,000 annually off my loan or investing. My income is $2400 a fortnight and I’m currently putting $810 into savings each fortnight and paying extra off my variable loan.

My partner and I did a spending course in 2021, which helped us understand where our money goes, and I’ve read The Barefoot Investor, but I’m just not confident and wish it were easier to grow money.

I’m also considering investing in a financial planner but unsure how this works. Any thoughts?

Good question, Kirralee. What I would suggest is to consider setting up an offset account to your mortgage and putting your surplus there.

This effectively earns you the rate of interest being charged on your mortgage, but your savings are accessible to you. Chat to your bank or mortgage broker about this and see if this works for you.

It is great you have read Scott Pape’s

The Barefoot Investor. I’ve known Scott for a long time and strongly endorse his solid, commonsense thoughts.

My background is in advice, and I firmly believe good advice is invaluable, but I wonder whether now is the right time for you. A professional adviser will need to do a complete assessment of your situation before they can proceed to give you advice.

This requires a lot of time, and an adviser may charge several thousand dollars for a statement of advice. I would really like you to get professional advice, but you should consider the costs and benefits at this stage of your life.

I wonder if you would not be better off to keep saving, possibly through an offset account, and seek advice as your asset base and income grow.