There has been a lot of talk over the past week about to the latest increase in interest rates.

While for many families, the costs of living has increased far more than wages, consider this – if you didn't watch the news, read the papers or listen to the radio, would you be worried?

Or would you go on enjoying your life free from the concerns of day-to-day living?

You would probably go on living a normal life. So what I’m suggesting is that you implement effective savings and cost-cutting strategies that will ensure you can still enjoy life, while being secure in the knowledge that you have a protection plan for the future.

One thing to consider here is effective strategies to minimise your exposure to interest rate rises:

Consider a fixed rate loan: If you're considering your options, a fixed rate loan allows you to lock in your home loan at a fixed rate of interest for a defined period, usually one, three or five years.

The main advantage is that you know exactly how much your repayments will be for that extended period.

Borrow only as much as you can comfortably afford to: Just because the bank says that you can borrow up to a certain amount, that doesn't mean that you have to!

Many people who successfully purchase property set a clear budget and don't allow their emotions to overtake sensibility.
Have your finance pre-approved to ensure you shop within your budget.

Move to a cash-only purchasing position for other assets: For many people, the purchase of the home is just one of many loans ... others may be used to purchase new furniture, a new plasma television and even a new car.

While these may all seem attractive, be careful about additional payments.

“Finance” leases – like the popular “36 months interest-free” options currently available – may seem attractive, but often these agreements have costly interest rates associated with them.

If you can't afford it, wait until you can. There is nothing like purchasing something that you have saved long and hard for.

Shop around: You'll be amazed to see the deals that you can get from various lenders.

See your mortgage broker (or financial planner) to ensure that you select the best loan for your circumstances and that you're receiving the best rate possible.

Remember, you can always refinance, but it's a costly move, so ensure you do your research up front.

At the end of the day, although interest rates have increased, as long as inflation is kept in check, our economy is still one of the healthiest in the world.

We all need a place to live, and it's better to be paying off your own mortgage … it's the greatest savings program you can undertake.