Whether it is getting a pay rise or paying off ,a long-term debt, getting a little bit extra each month can be a great boost to personal finances. Although it can be tempting to spend the extra money, homeowners who already have an emergency fund saved may want to think about the long-term and consider putting the extra money towards securing their future instead.
For homeowners thinking ahead, often the choice is between using the extra money to pay off their mortgage early or boosting their pension contributions. Although choosing which is the best option, Kellands, an independent financial adviser company, said: “A starting point, is to align your mortgage term to your preferred retirement date, ensuring you do not carry debt on your main residence into retirement. Beyond this, allocating further income or savings to tax-efficient investment can make sense. The consideration is to balance a known interest cost of a mortgage, against the unknown and variable, but potentially higher return available from investing. Valuable tax allowances, particularly those offered through pensions and ISAs can help sway the argument. The consideration tends to be a personal one, factoring your wider financial position, and views on risk and towards debt in general.”