The Rate Cut Is Finally Here and How You Can Take Advantage
I've been thinking about how to make my money work for me
Hey, late starters!
While most Aussies were glued to Married at First Sight (MAFS), I was doing something far less dramatic—I was refreshing realestate.com.au and thinking about my money strategy.
Why? Because the RBA finally cut rates.
Many have been waiting for it since the US made its first cut since 2020 in September 2024. The finance world had been buzzing about it for months. Some experts said we wouldn’t see a cut until mid-year, but here we are, and it came early.
For homeowners, this is fantastic news—lower mortgage repayments, finally! A 0.25% cut might not seem huge, but for a $500K mortgage, that’s about $100/month saved. Over a year, that’s $1,200 back in your pocket. Enough to cover car insurance, flights to Tokyo, or a big fancy TV.
But what if you’re not a homeowner?
That’s where things get interesting.
Pay attention—Things are changing
For the past year, I’ll admit—I’ve been lazy with my money. With high-interest savings accounts giving up to 5.5%, it was too easy to just leave my money sitting there. It felt safe. Risk-free. Why bother doing anything else when I was earning a solid return without lifting a finger?
But now? That’s about to change.
I checked my inbox this morning, and there it was—an email from my bank letting me know my savings account interest rate is dropping.
And this got me thinking: What am I actually doing with my money?
I’ve worked so hard to save it. And now, if I don’t do something, it’s just going to sit there losing value.
So… What do we do?
If you’re like me—a late starter trying to make up for lost time—this rate cut is a sign. A nudge to finally stop playing it too safe.
Here’s what’s been on my mind:
1. First, the mortgage situation
I don’t have a mortgage, but if I did, you bet I’d be on the phone with my bank or broker right now.
Banks will confirm their final rate cuts by March 4—so if you haven’t checked in yet, now’s the time. A quick call could mean saving thousands over the next few years.
If I were a homeowner, I’d be looking at ways to pay it off faster, too. Who wants to be paying a mortgage in their 70s?
2. Savings—how much is enough?
I’ve always been a safety-first person with money. I like knowing I have enough cash for emergencies. But how much is enough?
With rates dropping, keeping too much cash in the bank is just going to cost me in the long run.
So I asked myself:
Do I have enough for emergencies?
Do I have too much just sitting there?
The question of how much is enough for emergencies is controversial, as it depends on one's situation and what makes you feel safe. To me, one year of expenses is my comfort level, so that’s what I aim for.
And when I have more than my comfort level, the rest needs to start working for me.
3. Investing—making my money work
I used to be scared of investing. It felt complicated. I didn’t want to lose money. And I definitely didn’t want to spend hours researching stocks.
But I kept seeing people talk about ETFs—simple, diversified, and a great way to just get started.
So, here’s what I would do if I started over again:
I’ll go with either VAS or VGS, the two ETFs Aussies seem to love. And I’ll start small.
I’ll stick to a set amount every month, not worrying about timing the market. This is called Dollar Cost Averaging (DCA), which basically means investing the same amount regularly. So, I buy more shares when prices are low and fewer when they’re high.
Right now, VAS is trading at $101 per share. If I invest $100 a month, some months I’ll get a full share, some months fewer, but over time, I’ll average out my cost per share.
If I keep this up, by the end of the year, I will likely have at least 10 shares and make some dividends too.
4. Property—should I get in now?
I know many have been waiting for this time to buy a home. And I get it—when interest rates drop, property prices tend to rise.
I jumped on realestate.com.au to see what’s happening, and already, I can feel the market heating up.
If I were ready to buy, I’d be getting pre-approved now—because once prices start climbing, it’s harder to get in.
Final thoughts: This is our moment to move
This rate cut isn’t groundbreaking, but it’s enough to make some noises in the market, and you need to make the most out of this.
For years, I thought:
I have time.
I’ll figure it out later.
Things will work out somehow.
But looking back, I wish I had started sooner. I wish I had saved more, invested earlier, and been more intentional with my money.
If you feel behind, if you feel like it’s too late to start—I promise you, it’s not.
We still have time to get ahead, to build wealth, to set ourselves up for a better future.
So don’t just sit on this.
Make the call to your bank.
Review your savings.
Take that first step into investing.
Make this your goal for this week.
Current “Ah-Ha” moment 💡
I’ve been reading about debt recycling, which is a strategy to pay off your mortgage faster while investing at the same time. It sounds interesting, but it’s not for everyone. Should I write an article about it?
Where my money went this week 💰
My dog’s vet bill—$1,500. 😭 Luckily, I save separately for my dog’s expenses (yes, he has a bank account), so it wasn’t stressful. Do you save for your pet? If not, you should!
What shocked me this week 😳
$18 for a Lindt chocolate bunny! And that’s on special?! Easter shopping is getting out of hand.
That’s all for this week! Hope you all have a great start to March.
I’m on a mission to empower all the late starters to build a better financial future. You’re only too late if you never start.
For years, I spent mindlessly, assuming things would work out. Now I look back and wish I had: Saved more, Invested earlier and been intentional with my money. If you’ve ever felt stuck, behind, or unsure where to start, you’re not alone. Let’s figure this out together.
Disclaimer: Information shared in this newsletter is not financial advice. Always do your own research before making any financial decisions.
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We are faced with the same issue in the European union. So, saving has never been an option for me for a long-term investment 🤔.... it's okay for short-term reasons. Investing stays my number 1 strategy.