This week I read the assistant governor (of the RBA) comments with some dismay, wondering what it would take to make Australian’s stop spending & save.

Dr Kent commented “We’re going to be monitoring the effects of increased rates on household spending, and remember, we do actually want it (interest rate increases) to have an effect on household spending to rein that in somewhat”.

Charter Finance works with many organisations looking after their workforces’ financial wholeness. A key component of this is having borrowers take whatever excess cash they have and reinvest this into their home loans (where appropriate). According to a recently released report by AMP, financial stress in the workforce is causing a loss in productivity now exceeding $60 billion per annum!

Don’t get me wrong, I love holidaying with my family and retail therapy, but when we are in an environment where the governor is saying they’ll be increasing rates until spending is curtailed, for the sake of the collective, as a nation, we need get out of our post Covid retail blood rush, slow down and focus on wealth creation.

Whilst inflationary pressures are multi-faceted, our spending is a key barometer for the RBA. The increasing rates are affecting our asset values, as well as the disposable income we have, which has many a negative flow on effects into the productivity of the workplace and harmony in our homes.

We had these discussions with our clients when rates were not so long ago in the low 2%’s, saying invest the extra $ into your home loan (or savings / other investments) now, as soon enough, you’ll need to find those same dollars to pay the bank. We’re now above 4% with more increases to come. Before any more do arrive, let’s do ourselves and each other a favour, invest in something that provides long term return to ourselves, our families, workplaces and nation.