Inside super

1) You might have some already. If you’re an employee, you may already have some death and total and permanent disability (TPD) cover in your super fund. This can be an easy and cost-effective way to get basic cover without the usual medical tests.

2) You can pay premiums using super. Super funds can claim a tax deduction for some insurance premiums paid inside the super fund. This means your insurance premiums may be effectively paid with pre-tax dollars. This can help you take a higher amount of cover and use the tax savings to cover the additional premiums.

3) You can salary sacrifice. If you want to pay your insurance premiums inside super but don’t want to reduce your retirement benefits, you can top-up your super by setting up a salary sacrifice arrangement. However, if you do this you need to keep an eye on your concessional contributions caps (see below).

Outside super

1) You can protect your income tax-effectively. Income protection premiums are generally tax-deductible outside super – meaning there’s no tax benefit to holding this cover inside super.

2) You can use your concessional contributions caps for super, not insurance. There’s a limit to how much you can contribute tax-effectively to super each financial year. Currently, the limit is:
• $25,000 per year if you’re under age 50, or
• $50,000 per year if you’re age 50 or over (this is a transitional cap that applies until 30 June 2012).
If you have sizeable insurance premiums inside super and you need to make additional contributions to pay them, you could be limiting how much you’re able to put away tax-effectively for your retirement.

3) Your benefit is easier to access. Outside super, you are the owner of the insurance policy, and any benefits are paid directly to you or your beneficiaries. Inside super, the super fund owns the policy and your super account receives any benefits. To get that money out of super, you then have to satisfy a ‘condition of release’.  If you don’t, you may have to wait until your retirement age to get this money out of your super account.

With the 30th June approaching, it’s a good time to review your insurance needs to make sure you have the right cover in place, and that you’re making the most of the strategies available. For advice specific to you and your family, talk to your financial adviser today.

General Advice Warning:  This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances.  Please seek personal financial advice prior to acting on this information.

An estimated 1.2 million Australians aged 15 years and over have been a victim of personal fraud in 2010/2011, ­causing an overall financial loss of $1.4 billion. Credit card fraud is the most common form of personal fraud, affecting 3.7% of the population.

While some credit card fraud schemes are very complex, caution and close attention to how you use your credit card can help to reduce the risk of fraud. 

Following the tips below can help to ensure that your card details remain safe and don’t fall into the wrong hands.

1. Never let your card out of your sight during any transaction. That means if you’re at a shop, watch the sales assistant, and if you’re at a restaurant, go to the counter and pay the bill – this is particularly important if you are overseas where you could be identified as a tourist and a ‘soft target’.
2. If you’re buying goods online, make sure the site is reputable and well-established. Be wary of unfamiliar sites that are identified through searches – giving them your credit card details is the same as sharing your card number with a stranger on the street.
3. Make sure you have anti-­virus software installed on your computer as viruses can be used to obtain personal information.
4. Put a padlock on your home letterbox so that your credit card statement, which contains your card number and full name, or any other sensitive personal mail, cannot be stolen.
5. Never, ever, write your PIN down anywhere or share it with anyone.
6. Use internet banking to regularly check that only your transactions are going through your credit card.

For more information on scams that are currently circulating, please see the Fraud and Security page on our website.

Because Financial institutions (FIs) operate by borrowing money from some people to lend to others; The average rate at which a FI lends must be higher than the rate at which it borrows (i.e. a positive interest margin) in order to cover its operating costs and deliver a return to its owners (i.e. a profit). FIs borrow money from individuals (retail deposits), professional investors (e.g. superannuation funds) and other FIs (interbank loans) both in their home country and, often, overseas. The rate it pays on all this funding is driven by the type of borrowing (and the credit risk and other commercial terms applicable), the country the money is borrowed from and the term (expectations of future rates). It is the weighted average cost of all these sources of funding that constitutes the FIs cost of funds, upon which it must base its lending rates to derive a positive interest margin.

If you have any questions about the RBA or about interest rates feel free to leave a comment on this post and I’ll get back to you.

Wayne – Chief Financial Officer

I have had a busy couple of months! I have just started doing shopping centre visits, which can be quite scary for a small puppy. But I am no ordinary puppy and took it in my stride! One of the most challenging things about shopping centres has been the travelators and elevators, but I have mastered them already!

As you can imagine, I attract a lot of attention in the supermarkets and lots of people like to say hello to me. However, I am learning that when I have my coat on I need to focus on the task at hand. This is great training for someday when I might be a Guide Dog or Autism Assistance Dog. I need to stay focused while out working.

I have also been into a café with my Puppy Raising family. It can be quite challenging to ignore all the distractions and to sit still under the table, but I am learning and I think I am starting to get the hang of it.

I have attended some group puppy training sessions in the past few weeks. Of course I love to play with my littermates and friends, but now the challenge is to learn to walk side-by-side on lead and ignore each other. It’s very hard but I am picking it up!

I am having lots of fun with my Puppy Raising family. I really enjoy playing with the kids and they are so happy to have me living with them. The family lives near the beach and I just love walking along the esplanade with the wind in my ears!

I recently attended the “Lollipop Markets,” which is run by my Puppy Raiser. I ended up being one of the main attractions and even appearing in the event’s photo collage!

Soon I’ll begin taking trips on public transport, a big step in a Guide Dog puppy’s life, so wish me luck and I look forward to telling you all about it soon.

Love
Eastwood the Guide Dog

In 2012 Eastwoods sponsored a Guide Dog pup- called Eastwood, we will continue to provide updates on his progress here.

The legislation gives effect to 2009 Federal Budget announcements concerning the private health insurance rebate and Medicare Levy Surcharge changes. The proposed changes mean than an income test to the 30% private health insurance rebate will apply for individuals whose income for Medicare levy surcharge purposes is more than $803,000pa and for families where that income is more than $166,000pa.

What does this mean?
It means individuals and families may not be eligible for the full 30% rebate for their private health insurance premiums. In conjunction with this, also from July 1, 2012, the rate of Medicare levy surcharge for individuals and families without private patient hospital cover may increase depending on their level of income.

The effect of these new tiers would be no rebate where individual income is over $1249,000pa and families over $2548,000pa.
For the purpose of calculating your income threshold, it is based on the definition of income used to calculate Medicarelevy surcharge for individuals or families.

If you are unsure on how you may be affected, contact the team at Eastwoods Accountants & Taxation to see how you may be impacted.

John- Executive for Profesional Services

Eastwoods Tax & Accounting

Things you should know>

But what does this really mean for you the consumer? This post covers one of the most common questions we’re asked about the RBA. We’ll be covering off a few more questions in other posts too.

Does the RBA set interest rates for financial institutions?
The RBA does not set interest rates for Australian financial institutions, despite common misconceptions. The RBA sets a target for the interest rate on overnight loans between financial institutions in the wholesale money market. The wholesale money market is the market where financial institutions borrow and lend to each other.

The RBA then borrows and lends overnight money on the wholesale markets (i.e. influencing the supply of, and demand for, overnight money) to ensure the actual overnight interest rate remains as close as possible to its target rate. Other interest rates (e.g. on home loans, personal loans, term deposits etc) in the economy are influenced by this interest rate (and many other factors) to varying degrees, so that the behaviour of borrowers and lenders in the financial markets is affected by the RBA’s monetary policy.

Two other key influences on other interest rates are credit risk and tenor (term). Most interest rates have two key components, a risk free base rate plus a margin to compensate the lender for the credit risk they’re assuming (i.e. the risk that the money won’t be repaid). Overnight money, and particularly Reserve Bank funding, has low credit risk and therefore tends to form the base rate for short term interest rates.

The second key influencer on interest rates is term. For example, it is expected that a 30 year loan will have a different rate than a 1 year loan because of expectations/uncertainty about how interest rates might change over the longer term and the longer period over which the lender is exposed to credit risk. Government Bonds tend to form the risk-free base rate for longer term interest rates. These two factors will mean that the interest rate on, say, a 25 year home loan will be higher than the RBA’s official interest rate.

If you have any questions about the RBA or about interest rates feel free to leave a comment on this post and I’ll get back to you.

Wayne – Chief Financial Officer

•  The best place to start is to do your own research. Use the Internet to gather basic home loan information and to compare different types of loans. The main loans to look into include standard variable rate loans, fixed interest rate loans and parent equity loans. To help you decide, consider which option you think best suits your circumstances with a list of pros and cons for each loan type.
• Speak to your financial institution or a broker. This is an opportunity to ask questions and clear up any grey areas. Be aware that brokers are paid by the lenders they recommend. To ensure the recommended deal is best for you, research a range of lenders yourself and speak to a few different institutions.
• Compare the key loan terms and conditions. It can be difficult to know what to look for in a good loan and what terms and conditions are most important to compare. Most people compare the advertised interest rates, but you should also consider other fees, the loan’s flexibility, exit arrangements, repayment terms and redraw conditions. The Federal Government now requires lenders to provide Home Loan Key Fact Sheets on their products so that borrowers can make direct comparisons between loans. All facts must be presented in the same way, so you can clearly see the product differences between institutions.
• Think long term and consider your individual requirements. Consider the broader relationship with your lender. It is likely that you will be dealing with this financial institution for many years, so it’s worth considering things like the quality of service, branch locations, and wider product offering. Will these features suit you now and in the future?
• Don’t be afraid to negotiate a package deal. Most lenders are happy to offer a better deal if you transfer your entire banking relationship to one lender. Don’t be afraid to ask for a discount on interest rates, loan service fees or monthly account keeping fees if you bundle all your banking needs and deal with one institution.

Wayne- Chief Financial Officer

The Education Tax Refund (ETR) is the Australian Governments way of helping with the cost of educating primary and secondary school children. Eligible parents, carers, legal guardians and independent students are able to get money back on education expenses like computers, educational software, textbooks and stationery.

Many types of education expenses are claimable under the Education Tax Refund as long as you have a receipt for your expense of course. Find out more about what you can claim on the government education refund website.

Who is eligible?

To claim the ETR, a person must have had eligible education expenses during the financial year for a child, who meets the schooling requirement, and:

•  they received Family Tax Benefit (FTB) Part A for the child, or
• a payment was made for the child which prevented them from receiving FTB Part A, or
• their child stopped full-time school during the year and received income over the cut-out amount which prevented the claimant from receiving FTB Part A for the child.

If you are not entitled to receive FTB Part A, you may still be entitled to claim the ETR if you receive any of the following payments:

• Youth Allowance
• Disability Support Pension
• ABSTUDY Living Allowance
• the Veterans’ Children Education Scheme
• Student Financial Supplement Scheme, and
• the scheme to provide education and training under s258 of the Military Rehabilitation and Compensation Act 2004.

For more information on eligibility for the ETR visit the government education tax refund website.

Expenses

Eligible expenses

Many types of education expenses are eligible for the ETR and include the cost of buying, establishing, repairing and maintaining any of the following items:

• home computers and laptops
• computer-related equipment such as printers, USB flash drives, and disability aids to assist in the use of computer equipment for students with special needs
• computer repairs
• home internet connections
•  computer software for educational use
• school textbooks and other printed learning material, including prescribed textbooks, associated learning materials, study guides and stationery
• prescribed trade tools for secondary school trade courses, and
• school uniform expenses (uniforms purchased after 1 July 2011 are claimable in the 2011/12 financial year).

Find out more about eligible expense from the education tax refund website.

Expenses which cannot be claimed

• school fees
• student attendance at school-based extra-curricular activities such as excursions and camps
• tutoring costs
• sporting equipment
• musical instruments
• school subject levies – for example, payment for consumables for particular subjects such as woodwork, art or home science
•  building levies
• library book fees
• school photos
• donations
• tuck shop expenses
• waiting list fees
• transport
• membership fees, and
• computer games and consoles.

Find out more about what you cannot claim from the education tax refund website.

Sharing eligible expenses

Where eligible education expenses are incurred for more than one eligible child, you can share the expense between their children. But all the children must use the purchased items and the you must buy the item on a day when they satisfied the eligibility requirements for the ETR for each child. This is called pooling.

Claiming the Education Tax Refund

If you are eligible for the Education Tax Refund (ETR) because you receive FTB Part A, only you can claim the refund. For example, your spouse cannot claim the Education Tax Refund in their tax return if you receive FTB Part A.

Find out more about how to claim on the education tax refund website or by talking to a Tax & Accounting expert.

Michael – Eastwoods Practice Development Manager

Things you should know>

This information and advice is general in nature only and has been prepared without taking into account your individual objectives, financial situation or needs. Before implementing any recommendations that you may make based on the information contained here we recommend that you see a registered tax agent or legal adviser. The information in this article has been sourced from the Australian Government’s Education Tax Refund website http://www.educationtaxrefund.gov.au/index.html

Licensee Select is a division of Westpac and provides various financial planning support services to independent financial planning firms across Australia.

Eastwoods Wealth Management has previously won five SA/NT state based awards and has won the “Licensee Select National Practice of the Year” award 2012.

By winning the State award Eastwoods is now eligible for the national title which is announced in April.

The award represents an outstanding team effort dedicated to the provision of quality financial planning advice across Australia. I’m very proud of my team and the service we provide our clients.

John – General Manager Professional Services

The legislation gives effect to 2009 Federal Budget announcements concerning the private health insurance rebate and Medicare Levy Surcharge changes. The proposed changes mean than an income test to the 30% private health insurance rebate will apply for individuals whose income for Medicare levy surcharge purposes is more than $83,000pa and for families where that income is more than $166,000pa.

What does this mean?

It means individuals and families may not be eligible for the full 30% rebate for their private health insurance premiums. In conjunction with this, also from July 1, 2012, the rate of Medicare levy surcharge for individuals and families without private patient hospital cover may increase depending on their level of income.

The effect of these new tiers would be no rebate where individual income is over $129,000pa and families over $258,000pa.

For the purpose of calculating your income threshold, it is based on the definition of income used to calculate Medicarelevy surcharge for individuals or families.

Information and Table sourced from the Department of Health and Aging website

http://health.gov.au/internet/main/publishing.nsf/Content/currentissue-P11000027

If you are unsure on how you may be affected, contact the team at Eastwoods Accountants & Taxation on 08 8132 9222 to speak to us to see how you may be impacted.

Sam – Taxation Accountant Eastwoods Tax & Accounting

Things you should know>

Strength in diversity: How to spread your wealth effectively

Diversifying your investments is an important aspect of growing your wealth over time and minimising the risk of volatile markets without forgoing returns. Basically, it means not putting all your eggs in one basket, but spreading your investments across a diverse range of assets, such as property, cash, shares and fixed interest.

People often focus on only one type of investment, mostly cash or property, which is not an ideal long-term approach as all markets are subject to volatility at some stage – and if you are forced to sell your assets when the market is down, you will most likely incur a loss.

The main benefit of diversifying your investments is that the low correlation of the asset classes – meaning the performance of one class is not affected by the performance of the other – helps reduce volatility in your portfolio because they respond to different market trends at different rates. Therefore, having a portfolio diversified among different classes creates more consistency and can improve overall portfolio performance.

Another possibility of diversifying is within the same asset class, such as buying shares from different companies and industry sectors. The less these companies and industries are correlated to each other, the less risk you take. In other words if you buy shares in three different oil companies, the risk is almost the same as investing in just one of those companies, as the industry factors that affect one oil company are most likely to equally impact all companies within the oil industry.

Many people find planning their financial future daunting and don’t quite know where to start, so here are some tips to keep in mind when developing your investment strategy:

Seek professional advice

Speak to a professional financial planner about your investment goals and objectives and the level of risk you are willing to take. The adviser will then develop a long-term investment strategy that supports your goals, and take you through the risk assessment of each investment class. In most cases a diversified investment portfolio is spread across property, cash, fixed interest, managed funds and shares.

Plan for the long-term

There are many schemes out there that promise quick returns, but the 20 per cent return within 12 months is simply unrealistic. By spreading your investments you can ride out the storm in some markets without incurring losses. With a long-term, diversified strategy you can afford to wait for market conditions to recover again – which is the normal cycle of every market – and therefore protect the value of your assets.

Don’t be emotional

Fight the temptation to spontaneously invest in a scheme you read or heard about. Stick to your strategy and avoid knee-jerk reactions to chop and change your investments to follow potential trends. Sustainable growth can only happen over time.

Review your portfolio regularly

Review your portfolio with your financial planner every 12 months to potentially adjust risk levels. In volatile market conditions a 6-monthly review is recommended.

In summary, diversifying your investments helps you spread your risk, so that a loss on one investment may be balanced out by a gain in another, creating sustainable growth over time.

John – General Manager Professional Services Eastwoods

Things you should know>

Most importantly ensure you choose a lender you are comfortable with, who is up front with you about all the costs involved and takes the time to answer your questions. A home loan lasts for a long time so it is important to have a good relationship with your lender and ensure that their after sales service is as good after you’ve taken out the loan.

1. What loan will suit me best?

Review all the loan features such as whether you can redraw or make extra payments.

2. What is the interest rate?

The interest rate will either be fixed or variable and is used to calculate your repayments. It will determine how much you’ll pay over the life of the loan.

3. How much can I borrow?

Depending on the loan provider you can borrow a maximum 80-95 per cent of the value of the property. However you should always consider how much you could comfortably afford to pay each month by discussing the monthly repayment amount.

4. What deposit do I need?

Most lenders require a minimum deposit of 5 per cent of the property’s value. If your deposit is less than 20 per cent, you may need to take out Lenders Mortgage Insurance. The higher your deposit the better as it will enable you to absorb fluctuations in interest rates which will impact on your repayment levels and the total amount of interest you pay on the loan.

5. What fees do I have to pay up front?

Discuss all fees involved in taking out a loan, such as loan application fees and government charges – including stamp duty, mortgage registration, mortgage transfer and Certificate of Title search fees.

6. What other fees are payable?

Make sure you are aware of the all additional fees and costs associated with the loan. For example, are there any monthly fees or charges to redraw?

7. What is the total cost of the loan?

Ask for the Comparison Rate for the loan you are considering. This rate includes both the interest rate and most fees and charges payable during the life of the loan, which is useful when comparing loans.

8. Are there any benefits available to me when I take out a home loan?

Check if your lender offers any benefits for taking out a loan. For example, Community CPS offers its free pinnacle +plus program to members borrowing $200,000 or more, which entitles them to no transaction or loan establishment fees, discounts on loans and bonus interest on term deposit rates.

9. Can I pay the loan off early?

Chances are you may want to refinance your mortgage before the term is complete, so check whether a lender will charge you a penalty for doing so.

10. What will repayments be if interest rates increase by 3 to 4 per cent?

Ask your lender how much your repayments will be if this happened. It’s important to consider whether you would still be able to afford the loan if interest rates were to increase substantially.

Ross – General Manager Operations

Things you should know>

The key is getting started. The first step should be creating a budget so you know exactly where your money goes.

Create a budget

Gather your bills and make a list of all debts, including the name of the creditor, your total balance, minimum monthly payment and interest rates. You should also list other necessary expenses, such as groceries, fuel and other transport costs, insurances, rent and school fees.

Add up all the minimum debt repayments and in a separate column document essential expenditure – the total of both columns will be the minimum you need to cover for the month.

This exercise may reveal your income is not enough to meet all your expenses. If that’s the case, you may need to reduce some costs, such as pay TV or your mobile phone.

Prioritise

The next step is to focus on repaying the debt with the highest interest rate first. Put as much towards these repayments as possible – the sooner the debt is cleared, the less interest you will pay over the life of the loan.

It’s important to continue repaying other debts and if possible, repay slightly more than the minimum so the balances can be reduced.

Consider debt consolidation

Depending on the size of the debts and the interest rates charged, it may be worth taking out a Debt Consolidation Loan. Instead of paying multiple creditors a variety of interest rates, you take out one loan to pay off all those accounts and make one single, monthly repayment.

However, be sure that the costs of the new, bundled loan are less than the total of current interest costs, otherwise there will be little to gain.

Assess your credit card debt

For those with a growing credit card debt, it may be beneficial to transfer the balance to a card with a zero per cent interest rate for a fixed period. For this strategy to work, it is vital that the balance is paid off before the no interest period ends.

There is one other important ingredient in a successful debt reduction strategy – discipline. By staying focused on the end goal, you’ll be well on the road to better money management.

Ross – General Manager – Operations

Here are a few tips to help you spot some of the credit card myths:

• Low rate credit cards have a low rate – it’s all relative and still best to shop around. The so-called low rate card from one organisation might still have a higher rate than those from other institutions. Also don’t forget the annual fee in this equation and make sure the low rate is not just an introductory offer.

• Low interest balance transfers are a good deal – they can be but you might find that you’ve switched to an expensive card once the honeymoon is over. Make sure you check how long the low (or no) interest balance period is and which interest rate applies after that period.

• Reward schemes are worth a slightly higher interest rate – reward schemes are great if you pay your card off each month to avoid interest but, if you don’t, the rewards are often negligible relative to the extra interest you have to pay. Also, be careful of the monthly card fee!

• Interest free days apply to all purchases – not true! Generally interest free periods only extend to the next repayment date. This could be up to 55 days for purchases made just after a statement cut-off date but can be as little as 10 days for purchases made just before a cut-off date. Make sure you are aware of the cut-off dates for your cards so you can manage your card activity.

• The higher interest rate on a credit card is not significant because the debt amount is usually small – be careful, it all adds up! Even if you’re carrying forward and paying interest on as little as $1,000 each month you’d be better off drawing down on your home loan, or taking out a personal loan to pay this off, as interest rates on those loans are much lower. Avoid paying interest on your credit card and focus on paying back the higher loan as quickly as possible.

• It’s just too tempting to spend on the credit card – the repayment pain comes later! This is not a myth and is exactly how credit card providers make money. The key is spending discipline. Credit cards are a convenient way to buy but the golden rule is to not spend what you can’t afford to pay in full when the credit card bill arrives.

^Wayne - Chief Financial Officer

Credit cards, ATMs and EFTPOS have made our lives easier in one respect, but spare a thought for the challenge our cashless culture poses to parents. Teaching children the value of money today requires care, persistence and setting a good example.

It all starts from when a child first begins to count. Teach them about the different currency denominations and explain how everything has a price, from the gingerbread man in the bakery to the latest toy.

Teach them how to count their money to see if they have enough to make the purchase. It’s also important to talk to them about ‘needs’ and ‘wants’. Use shopping trips as an opportunity to teach them that everything in a shop costs money and so we must decide what is really needed and what isn’t.

To show that money is a reward for effort, pay pocket money in exchange for children helping around the house.

On ‘pay day’, provide pocket money in denominations that encourage children to save a portion. For example, if a child has earned $5, give them five $1 coins so they can save $1.

Start the saving habit early by opening a savings account for your child and encourage them to make deposits and watch the balance grow and earn interest.

If children are keen on a big ticket item, such as an iPod touch or Nintendo DS, encourage them to save up for it. Show them that by saving a fixed amount of pocket money each week for a certain period, they will have enough to fund their purchase. Once they reach the goal, make a special outing of going to the shop to buy the item.

It’s also important to give them some autonomy to make their own spending decisions so they learn through experience.

If they want to spend all their pocket money at once, explain that this means they won’t have any money until the next pay day to buy anything else they might like.

By educating our children and encouraging them to learn through action, they can grow up with the necessary skills to manage their money.

^CS

Most major organisations offer online or email statements/billing options.  If you haven’t already made the switch this is a really simple step you can take to reduce your impact on the environment. It’s amazing just how much paper is used to produce statements.

Ask your financial institution to switch you to online statements now.

1. It’s convenient! You can view or print your e-statements any time you choose.
2. It’s simple! You will receive an email when your e-statement is ready to view online.  
3. It’s fast! Your e-statement is available before paper statements get through snail mail.
4. It’s secure! Your e-statement will not be lost or stolen in the mail.
5. It’s environmentally friendly! Reduces paper waste.

We know we can all do more. Embrace the change and take your first and simple step towards reducing your paper consumption, register for eStatments today.

Ross

Environment Management System Committee Chair

Now there is an easier way to fundraise for your local not-for-profit club, group or charity- the Community Reward Account.

This account takes the average annual balance of all Community Reward Accounts nominating your club, group or charity as the beneficiary, and donates up to 1.5% of this balance directly to your registered organisation!

How to benefit:

1. Find out about becoming a recipient for the Community Reward Account*.
2. Register your club, group or charity as a recipient.
3. Encourage all of your members and supporters to open an account to support your club, group or charity.
4. At the end of each financial year the amount raised is deposited straight to your registered organisation.

What your supporters need to do:

1. Open a Community Reward Account.
2. Select your club, group or charity to receive the benefits.
3. Start saving!
4. Be happy knowing they are supporting their favourite club, group or charity.

We know it works:

Over the past few years many clubs, groups and charities have been recipients of this account with great success.  In 2011 approx. $150,000 was donated to registered organisations.

This could easily be your not-for-profit club, group or charity!

Luke – Product & Segment Analyst

Now is the time to take some precautionary steps to protect your home and loved ones before a bushfire threat develops and ensure your Home Building and Contents Insurance is up to date and that it provides enough cover to replace your home and all its contents should the unthinkable happen.

Here are a few simple measures you can take:

• Regularly clean leaves from gutters and downpipes;
• Keep woodpiles and other flammable materials well away from the house;
• Trim any long grass or dense scrub near your property;
• If possible, have a 20 metre safety buffer around your home free of rubbish;
• Take time with your family to sit down and develop a plan, ensuring all family members know what to do in the event of a fire;
• Consider purchasing a portable pump to use from your swimming pool or water tank;
• Have a first aid kit and protective clothing ready should fire approach. 

These simple steps can make all the difference in protecting your home, business and family from a fire. And, if you are unsure whether your insurance is up to date or if it provides enough cover, talk to us or use our Home Building Replacement Cost Calculator or Home Contents Replacement Cost Calculator which can help you estimate the full replacement value of your home and contents.

Stay safe. ^Derek, Insurance Manager

The Scheme is becoming increasingly popular, particularly with first homebuyers and young families. Because buyers only need to borrow the money for the house and not the land, it reduces the deposit required substantially. Without the Scheme the dream of owning a home would remain elusive for many.

As a mutually owned organisation housing affordability is an issue very close to our hearts, and we are pleased that, together with the ACT Government, we can help more people to break out of the rent-cycle and get into their own home sooner.

So far we have approved land rent loans to the value of $40 million, with loans advanced approaching $10million.

Wayne – Chief Financial Officer

It’s that moment in the New Year that so many Australians dread – the credit card statement that clearly spells out how much you’ve spent at Christmas.

Many consumers get caught up in the Christmas spirit and arrive in the New Year with credit card balances they simply can’t pay off.

If you’ve woken up to the holiday debt hangover, you should focus on avoiding high interest charges, which are often much higher on credit cards, by clearing the debt as quickly as possible. If you can, clear the balance completely when due, but if you don’t have savings or the cash flow to do this, then investigate alternatives such as refinancing the debt at a lower interest rate.

Some might have the capacity to redraw on their home loan, where the interest rate is much lower than a credit card, or consider taking out a personal loan. For this strategy to succeed it is vital for consumers to increase loan repayments so the credit card portion of the owed amount is cleared as quickly as possible. Make a mini budget that allows you to repay the holiday debt over a few months, otherwise you wind up stretching a $2000 debt over a 20-year home loan, which will cost more in interest and extend the life of the debt.

While you’re clearing the balance, be careful about how you use your credit card and only spend what you can afford to repay at the end of the month.

If you’re facing back-to-school expenses, then take advantage of any interest-free period on your credit card, provided you can pay the outstanding amount at the end of that period. If you don’t think you can do this, consider cheaper sources of credit, such as the home loan, but like the Christmas debt, you need to increase your repayments.

While clearing the 2011 debt, consumers should also focus on preparing for the 2012 festive season. If you have landed in January with a nasty credit card debt, the important thing is to avoid the same thing happening next year.

So if you know that you usually spend, say, $1500 at Christmas, then set up a Christmas savings account where you make a $30 weekly deposit and are discouraged from withdrawing funds early.

By preparing a plan and sticking to it and spreading the cost over the year you can avoid the pain of a large lump sum cost at Christmas.

Wayne – Chief Financial Officer

Things you should know>

The HLKFS have to be presented in the same format and layout regardless of the lender, and are designed to enable consumers to easily compare home loans provided by different lenders.

The HLKFS are prepared based on consumers’ individual requirements for their loan amount, loan term and interest type (fixed or variable) and summarises information about the loan, including:

• The interest rate (nominal and comparison rate i.e. including fees)
• Total amount to be repaid (including loan amount and fees)
• Amount repaid for every $1 borrowed
• Establishment and ongoing fees
• Repayments per month and per year

They also include information about how your monthly repayments will change if interest rates increased by one per cent and how much sooner you could repay the loan if you increased your repayments by $200 per month.

I’m pleased to see initiatives like this implemented that help people find the best product for their personal circumstances. Every lender uses a different language to describe its products and features it can be quite difficult for people to compare them directly to one another.

Buying a home is a big decision for most Australians, and they will spend a good time of their adult life paying it off – so it is very important to pick the right product. We feel the HLKFS are a great tool, empowering consumers in their choice of product without the bells and whistles distracting from the actual basic features of the loan.

If you’re thinking about taking out a home loan, make sure you ask for a HLKFS from several lenders to enable you to shop around for the best deal. Financial institutions are also required to make the HLKFS available on their website if they provide information about home loans or enable home loan applications online. You’ll find ours here:-

http://www.communitycps.com.au/calculators/homeloankeyfactsheet.aspx

 Wayne – Chief Financial Officer

You may have made a certain New Year resolution such as getting out of debt or buying a house, or you simply may want to ensure you are receiving the maximum benefits out of your current situation.  Either way, regular reviews of your bank accounts can provide you with valuable extra savings.

If the New Year has also coincided with a change to your personal and lifestyle circumstances, reviewing your bank accounts is even more important. You may have started a new job, bought or are buying a house, started or plan on starting a family or be retiring from work.  

These, and similar changes, may alter your day to day banking behaviour and needs.  For example, they  may alter the way you transact on your account, the amount and frequency of deposits and direct credits which you receive, or if withdrawals and direct debits coming from your account.  This could change the amount of fees you are charged and the interest you may earn.

Reviewing your accounts will ensure that you:

• have the right account for your banking needs;
• are not paying any unnecessary bank fees; and
• have the best savings options to maximise the interest which you can earn.

To get started, review your bank statements for the past few months.  This can be easily done by reviewing your transaction history or e-statements within Internet Banking.  Check to see what fees you have been charged at the end of each month.  If you have been charged excess fees and/or don’t understand the fees you have been charged, contact us so we can explain how you can minimise your fees each month and check to ensure the account(s) you have best suits your current needs.

Interested in maximising the interest you earn?  Many people hold large, excess balances in everyday access accounts.  The nature of these accounts means they pay very little, if any, interest.  There are many at call deposit products offering a higher rate of interest and better return for your money.

Speak to us today to see if you can get more out of your everyday banking and maximise the interest you can earn.

Luke -  Product & Segment Analyst

Things you should know>

Over the holiday season many of our members will be thinking about their finances and making New Year’s resolutions to improve them.

We have highlighted the top 10 investment tips to help meet your longer term goals.

Top 10 investment tips

1. Clarify your investment goals – having a clear understanding of your goals will help you select the most appropriate investments to achieve them.
2. Pay yourself first – Set aside some of your pay packet for your longer term goals.  List all your expenses then work out how much you can afford to save each month.  With the surplus put this money aside first so that you don’t spend it on other miscellaneous items.  That way you will be able to meet your longer term goals.
3. Set up an automatic payment – to help you organise your contributions to your investment(s) so you save automatically!
4. Invest your savings to grow – make the most of your savings by investing them.  The type of assets you invest in will depend on your financial needs and objectives.
5. Harness the power of compound interest – each dollar you invest earns a return.  If you reinvest that return, it can earn more dollars, allowing your investment the potential to grow much faster.
6. Diversify your wealth – spread your risk across each of the main investment types (for example shares, property, fixed interest and cash) with an aim to achieve more consistent returns.  In other words, ‘don’t put all your eggs into one basket’.
7. Choose tax advantaged investments (not tax driven investments) – consider sound investments that can also offer you tax benefits.
8. Time in, not timing the market – it’s not timing the market that’s key, but rather the amount of time you’re in the market.
9. Get some advice – speak to an expert who can help assess your needs and goals.
10. Do something now – the sooner you get your investment started the sooner you’ll achieve your goals.

Happy Investing!

Michael – Practice Development Manager

Investment Performance:  Past performance is not a reliable guide to future returns as returns may differ from and be more or less volatile than past returns. The ten tips were sourced from Colonial First State www.colonialfirststate.com.au  Eastwoods Wealth Management Pty Ltd,  ABN  17 008 167 002, AFSL  237853. Things you should know>

The pre-Christmas spending season traditionally sees Australians give their credit cards a solid workout. Last year we collectively spent $3 trillion more on our cards in November and December than in any of the previous ten months.*

Rather than undo all the healthy budgeting efforts made during the year, some simple strategies can help you keep credit under control over the festive season.

Maintain a sense of perspective

Rather than get swept up in a frenzy of festive season spending, aim to maintain your regular financial regime.

Follow Santa’s lead

To avoid overspending, take a tip from the big man in red himself. Make a list. Then check it twice. Allocate a spending limit for each person you plan to buy a gift for.

Shop smart

Hit the stores early to snare the best deals on gifts. Doing your gift shopping online is an easy way to make cost comparisons.

Cash is king

If you’re buying big ticket items this Christmas aim to pay with cash. And don’t be afraid to ask for a discount.

With your finances in good shape and card debt under control, you’re well placed to celebrate the festive season knowing you can take advantage of investment opportunities in 2012.

Happy Holidays everyone! ^Michael, Practice Development Manager

*This publication has been complied for Licensee Select by Securitor Financial Group ABN 48 009 189 495 AFSL 240687.  Things you should know.

1. Security: treat it like you would your computer, ensure you have antivirus installed on your device. It contains a LOT of personal information, and you probably use it for online purchases or online banking you need to ensure you keep it safe.
2. Pins & Passwords: ensure you have a pin or password set on your device AND your SIM. This will ensure if your phone is lost that thieves cannot make phone calls from it.
3. WIFI & Bluetooth: ensure you are connecting to safe networks, try and use a network that is encrypted and requires a password to access it. And ensure you turn off Bluetooth when you are not using it. You would be surprise how clever thieves can be accessing your information via WIFI and Bluetooth networks.
4. Recycling your old phone: ensure that ALL information is completely removed from your phone before recycling it. Remember your phone contains a lot of personal information about you.
5. Foreign links or emails:  ensure you do not click on any unknown links or emails, it is likely they contain malicious software.
6. More than a phone: todays smartphones are almost like your wallet always keep it with you. They are also a form of computer and you should take all of the same precautions you would with your computer.
7. Stay within reputable websites: be cautious with your web surfing ensure you stay within reputable websites.

You can find out more smartphone and tablet security tips at scamwatch.gov.au

 This trend has occurred for a variety of reasons such as the difficulty in saving up such a large deposit, required to enter the home buyers market.

Parent Equity home loans are designed so parents, parents-in-law or step-parents can help their children purchase their own home by using the equity in their property.

Depending on how much a family member is willing to guarantee, the homebuyer could borrow up to 100 per cent of the purchase price as well as an additional 10 per cent of the price to help with the associated costs of the purchase, such as stamp duty and other fees.

Using theParent Equity home loans home buyers may be able to avoid paying lenders mortgage insurance (LMI), which can amount to thousands of dollars.  When the property increases in value or when the loan is sufficiently reduced, the guarantor (the parent) can be released from the loan.

The Parent Equity home loans is a great product to help enter the home buyers market. Current market conditions are ideal for first home buyers, particularly with low interest rates and a stagnant property market.

No one thinks it is ever going to happen to them – but what if one day, you unexpectedly had a heart attack like one of our members Jan. Jan was 50 years old and fit and healthy, but one day after suffering from stress, Jan had a heart attack. Jan was told she was ‘half a centimetre away from death’ that day.

Luckily Jan had taken out trauma insurance as there was a history of breast cancer in her family. She received payment six weeks later and was able to choose what she wanted to do with the funds, such as pay off debt, or set aside the money for retirement as she may need to retire earlier.

“I now see why it is so important to be adequately insured to protect against unforeseen events in life particularly where health is involved, because it has a major impact on your life,” says Jan.

Some people are aware that they are at higher than normal risk due to family history. Sadly the majority of people who are diagnosed with cancer, cardiovascular disease or serious illness did not know they were at risk.

Dealing with the emotional consequences of suffering a serious illness can be hard enough, but adding financial stress on top of this can be devastating. Trauma Insurance eases the financial burden allowing you to focus on getting well.

Trauma insurance pays a cash lump sum payment in the event of contracting a specified disease or trauma and covers up to 58 defined events such as cancer, heart attack and stroke.

Trauma insurance gives you a lump sum payment to ease the financial pressures of not working and could be used to cover things such as:

• To pay for a specialist or possibly receive international medical attention
• The cost of modifications made to the home or relocating to more suitable accommodation
• Financial obligations whilst recovering (living expenses, debts) • Rehabilitation and recovery costs
• Paying off outstanding debts or providing an ongoing income
• A professional carer
• Enabling your partner or family member to reduce their working hours to look after you.

It may make more sense to renovate than to move if your property is unique in its location, size or design qualities, or if you love your home but it’s just not big enough.

Renovating is a great way to get the house you want. You have the freedom to add design features that suit you and your family whether it’s for an addition to the family, the ensuite you’ve always wanted or a games room for the kids.

The aspects of a house most likely to capture buyers’ attention are bathrooms, the kitchen, entertaining areas and landscaped garden spaces.

Benefits of Renovating:

• You can stay in the house that you like and make improvements according to your individual choice and style
• Your renovated house may be worth a lot more in the real estate market
• You can avoid the costs associated with selling (such as stamp duty, legal and agency fees).

Benefits of Buying:

• Buying a new home is usually quicker and easier than undertaking a renovation
• When you buy you know exactly what you’re willing to spend and choose a house to meet your requirements
• You can avoid the risk of improving your current home beyond the increased value you might get from the sale of the home.

Before you make the final decision, look at the real estate market, get an appraisal on your house and look at prices of houses that you would consider buying instead. Ask a construction professional what your desired renovation is likely to cost. A small investment in good advice can really pay off when you decide to sell your home in the future.

Whether you decide to renovate or buy it is important to remain focused on your finances and more importantly, choose the right loan.

There are basically three types of policies available. ‘Comprehensive’ insurance will cover you for the damage to your vehicle as well as the damage you may cause to other people’s vehicles or property. ‘Third Party Property Damage Fire and Theft’ only insures your car if it is damaged by fire or as a result of theft as well as damage to other people’s vehicles or property that you cause with your vehicle. ‘Third Party Property Damage’ only covers damage you cause to other people’s vehicles or property.

When looking for an insurance policy to meet your needs and budget, here are five things to remember:

1. Think about who will drive the vehicle, even if only on occasions. Ask if there are any restrictions on who can drive the car, particularly young drivers.
2. Find out about the Excesses that apply. An Excess is the first part of the claim that you may need to pay depending on the circumstances of the accident. Ask about any additional excesses for young or inexperienced drivers, or if the policy provides the ability to select a voluntary excess allowing you to reduce your premiums.
3. Talk to your insurance consultant about the options available to tailor your insurance; for example, can you remove the excess for windscreen or other window glass breakage; is a hire car available should yours be off the road due to an accident?
4. Consider whether it is important to you to have a choice of repairer and see if the policy allows you to do so.
5. Resist the temptation not to have any insurance. You might be able to pay for damages to your own car, but can you also afford the repairs to someone else’s car or other property? What if you hit a high-end BMW or damaged a set of traffic lights? At the very least you should have third party property damage cover to avoid paying for these repairs out of your own pocket.

Find out more about car insurance which can be tailored to suit your needs.

With the direction of future interest rates uncertain and the continually soaring energy and grocery prices, the Christmas period is the time when families are most likely to under estimate the financial burden.

Often people forget about the myriad of other expenses beyond presents, such as food and drinks and of course any travel expenses such as petrol and accommodation.

The good news is that it’s never too late for those who haven’t yet considered budgeting for the Christmas period and offers the following tips:

• Reflect on last year … consider how much you spent last year and what you could have done without. How much difference will it really make?
• Make a list … make a list of all the expenses you can foresee during that period, including presents, food, alcohol, flights, accommodation and decorations.  
• Draw a line … buying Christmas presents can be the most costly of all, so allocate an overall budget for presents and divide it among your list of friends and family and stick to it.
• Do it differently … as families grow so does the financial outlay for presents. Consider doing a draw whereby you only buy for one immediate family member.
• Plan ahead and do your research … write down who you’re buying presents for and what you’re wanting to buy before you step foot in a shop to avoid buying on impulse.  
• Avoid getting swept up … it’s easy to get swept up in the moment and buy things that were not originally budgeted for or spend a little over the budgeted amount – it all adds up.
• Think outside the square … why not take the opportunity to show your creative side. Often things you make yourself are more personal than something you’ve bought in a store.
• Keep track … hold on to receipts so you know exactly how much you are spending which could assist with budgeting in the future.
• Be a bargain hunter … don’t be afraid to take advantage of the pre Christmas sales, no matter how far out from Christmas they are.
• Avoid credit … avoid using high interest credit cards or store cards unless you know that you will be in a position to pay it off. If in fact you must use credit, choose a personal loan so the amount is fixed and will not blow out as it can with a credit card. It also gives the advantage of shopping with cash and achieving a better discount on a chosen item.
• Start now … start your savings today. Check to see if your credit union or bank offers a high interest Christmas savings account that automatically deducts money from your pay to give you a lump sum in time for Christmas.

To make saving for Christmas a little easier, we have developed an easy-to-use online budgeting calculator, together with a Christmas Club Account designed to help members save for their Christmas related expenses.

The Christmas Club Account features a limited access option, a higher rate of interest, no monthly account keeping fees and the option of having part of your wage deposited directly into your account.

“No one really notices a small amount deducted from their wage each week, and it’s comforting to know that when December comes around you have a lump sum ready to spend without having to rely heavily on credit cards,” Mr Matters said.

“The last thing we want people to do is start 2012 with financial difficulties so we’re advising people to start their planning now.”

The key difference between credit unions and banks is that when people join a credit union they are not a customer, they are a member and owner of the business.

With every customer being a member and owner (and having an equal vote in how the organisation is run), credit unions and mutual building societies offer products and services designed to cater more for their members than the institution’s bottom line.

Credit unions meet the same regulatory standards as the biggest banks, so are just as safe and secure. Credit unions are ‘authorised deposit taking institutions’ and are regulated under the Banking Act by the Australian Prudential Regulatory Authority and Corporations Act by the Australian Securities and Investments Commission.

Because credit unions are not answerable to financial shareholders, they don’t squeeze profits out of their members to provide large share dividends. Once the expenses of a credit union are met, any additional income is returned to members in the form of extra benefits such as:

• Better interest rates on deposits and loans
• Lower fees and charges
• Enhanced member services
• Investment in the communities in which members live and work.

One way of minimising risk is to diversify your investments. Put simply, to diversify means not putting all your eggs in one basket! By spreading your investments across a diverse range of assets, your overall risk may be less compared to investing in a single and possibly volatile investment. Diversified investments can help you to manage risk without forgoing returns.

There are various ways in which this can be achieved.

One way of diversifying could be to spread your investments amongst various asset classes such as shares, property, fixed interest and cash. The low correlation to each other – meaning the performance of one class is not affected by the performance of the other – helps reduce volatility in your portfolio because these different assets respond to different market trends at different rates. Therefore, having a portfolio diversified among different assets creates more consistency and can improve overall portfolio performance.

Another way to diversify is within the asset class, for example, if you are looking to buy some shares you could consider buying them in different companies. To eliminate even more risk, it is also important to consider the industries these companies operate in to determine if they are too closely correlated with each other. In other words if you buy shares in three different oil companies, the risk is almost the same as investing in just one of those companies, as the industry factors that affect one oil company are most likely to equally impact all companies within the oil industry. For example, if the price of oil drops, it is probable this will have a negative impact for most oil companies.

It is not advisable to put all your eggs in one basket when it comes to your investments and the financial markets. Diversifying your investments helps you spread your risk, so that a loss on one investment may be balanced out by a gain in another.

Understanding your tolerance to investment risk is a good first step in taking action to diversify your investments. It is recommended before making any investment decisions that you speak with a financial planner who can help determine your risk profile and see what’s right for you.

WORK-RELATED EXPENSES:

According to the ATO, approximately 7.3 million Australians claimed an average of $2,008 in work related expenses last year, making them one of the most commonly claimed deductions.

Things to remember when claiming work-related expenses:

• You must have incurred the expense in the year you are claiming it.
• The expense must be work-related and not private and if the expense has been reimbursed by your employer it can’t be claimed.
• Receiving an allowance from your employer does not automatically entitle you to a deduction.
• If your claims total more than $300 you need to keep written evidence.

USE THE EDUCATION TAX OFFSET

If you have bought computers, textbooks or stationery for your children’s schoolwork you can take advantage of the 50 per cent education tax offset.

You qualify for the Education Tax Refund if you receive family tax benefit Part A. This financial year you can claim expenses of up to $794 for each child in primary school and up to $1,588 for each child in high school and get half your money back.

CLAIM YOUR CHARITABLE DONATIONS

Don’t forget your donations to charity – everything from the Queensland Flood Appeal to your sponsor child. Any donation over $2 is tax deductible but you’ll need a receipt to claim for the donation.

UNDERSTAND YOUR OFFSETS

There are a lot of offsets available and it’s a good idea to check whether you are eligible for one. These include the dependant spouse tax offset, the private health insurance rebate or medical expenses over $1500.

If you can’t find receipts, but know where you spent the money, see if you can get a copy of the receipt or invoice. Statements from your financial institution showing details of purchases can be used in some cases.

When it comes to testing whether or not something is a scam the old adage “if it’s too good to be true, it probably is” certainly applies. However, whether something is a scam is not always that obvious.

Therefore in order to protect yourself from scams, remember the following 10 ‘golden rules’:

1. If it looks too good to be true – it probably is;
2. Use your common sense: the offer may be a scam;
3. ALWAYS get independent advice if an offer involves significant money, time or commitment;
4. Remember there are no get-rich-quick schemes: the only people who make money are the scammers;
5. Do not agree to offers or deals straight away: tell the person that you are not interested or that you want to get some independent advice before making a decision;
6. You can contact your local office of fair trading, ASIC or the ACCC for assistance;
7. NEVER send money or give your debit card, credit card or online account details to anyone you do not know and trust;
8. Check your account and credit card Statements when you get them. If you see a transaction you cannot explain, report it to us immediately on 13 _5 85;

1. Do not agree to offers or deals straight away: tell the person that you are not interested or that you want to get some independent advice before making a decision;
2. You can contact your local office of fair trading, ASIC or the ACCC for assistance;
3. NEVER send money or give your debit card, credit card or online account details to anyone you do not know and trust;
4. Check your account and credit card Statements when you get them. If you see a transaction you cannot explain, report it to to your financial provider.

Further information on scams and how to protect yourself, including a free email alert service, is available on the Government’s website SCAMWatch

Sources:

ASIC’s MoneySmart

ACCC’s SCAMWatch

To obtain the best deal for you, it is important to shop around and compare interest rates, fees and the minimum loan amount required to be eligible for the offer.

Shopping around can save you tens of thousands of dollars over the term of the loan but it is important that you are comparing ‘apples with apples’ when looking at the different features.

Community CPS member, Elicia Williams of Pooraka SA, has recently refinanced her home loan from Commonwealth Bank and has experienced a saving of almost $90 per fortnight.

“This saving will assist with my everyday living expenses as the cost of living continues to increase,” said Ms Williams.

Make additional repayments

Making additional repayments beyond what’s required in your minimum monthly repayment is one of the best ways to reduce the total interest paid and term of your loan.

Consider either one-off lump sum payments when you have spare cash or commit to increasing your regular repayment amount. Even $5 extra each week can save you thousands of dollars in interest over the life of the loan and reduce your home loan term. However, make sure that your loan allows you to make additional repayments without penalty. Fixed-rate and basic (or ‘no-frills’ loans) often have restrictions on extra repayments or charge a fee for the privilege.

Make your surplus cash work harder

Use cash savings to help pay off your loan quicker.

If you have a home loan at seven per cent, every extra dollar you pay off the principal is another dollar you are not paying seven per cent on each year. If you instead put that extra dollar into a savings account you are only going to earn two or three, perhaps five per cent at the most.

Therefore putting savings into your loan earns you twice as much as a savings account. Redraw facilities available on most standard variable loans allow you to take back those extra payments if needed.

Save interest with offset accounts

Offset accounts not only save you interest paid on your home loan, but are great for tax purposes as well.

Savings held in offset accounts are subtracted from the outstanding loan amount each month so interest is charged only the net amount. Interest paid in cash to your savings account is taxable, but the same interest used to offset home loan interest is not – a tax effective way to reduce your home loan. However, to get the most from an offset account, look for accounts that offer a ‘full offset’, ie. paying interest at the same rate charged on your home loan. Redraw facilities and line-of-credit loans make use of your savings in much the same way.

Consolidate your debts

As interest rates rise on home loans they also rise on personal loans and credit cards. Consider rolling all debts into your home loan. There’s more than one benefit to this strategy.

Firstly you could end up paying less interest because home loan interest rates are often much lower than personal loan, credit card and store account rates.

And by reducing your monthly repayments into just one home loan repayment you could reduce your monthly commitments so that you have extra cash available to make additional repayments off your home loan. This option requires discipline around future use of credit cards and store account, such as reducing limits or closing the account.

Factor further rate rises into repayments

It is a good idea to factor in further rises in interest rates and, if possible, start making contributions at the higher rate. It will ease the stress when repayments do increase and will also put you ahead of the scheduled loan term – as will extra contributions. Alternatively, if rates decrease you should keep your repayments at the higher amount to enable you to pay off your loan sooner.

8 simple tips for better online security

1. 1. Install and renew your security software and set it to scan regularly;
2. 2. Turn on automatic updates on all your software, including your operating system and other applications;
3. 3. Think carefully before you click on links and attachments, particularly in emails and on social networking sites;
4. 4. Regularly adjust your privacy setting on social networking sites;
5. Report of talk to someone about anything online that makes you uncomfortable or threatened;
6. Stop and think before you post any photos or financial or personal information about yourself, your friends or family;
7. Use strong passwords and change them at least twice a year;
8. Talk within your family about good online safety.

Remember your personal details should remain private, never give them out online or over the phone in cold calls.

For more information, visit Stay Smart Online.

1. Review your mortgage – check the interest rate and regular fees on your mortgage and compare it with other providers to determine if now is a good time to refinance to save costs. Keep in mind that refinancing and switching financial institutions can incur fees, so make sure you include this in your calculations.
2. Check your credit card’s interest rate and interest-free period. If you only get 30 days interest-free, look at changing to a card with 55 or 60 days. And if you can’t pay it all off, take advantage of a balance transfer to a lower interest rate credit card.
3. Pay off your debt – know what interest rates you are paying on your loans and work to reduce the balances of those charging the highest rate of interest first.
4. Get insurance quotes from various insurers to see how much you can save on your home and car insurance. Many providers will offer a discount if you take more than one policy with them.
5. Investigate whether bundled services for your home phone, mobile phone and internet might save you money.
6. Switch to compact-fluorescent bulbs, and turn them off when not needed. Turn off TVs, computers and other electrical appliances when not in use.
7. Use shades, blinds and drapes to regulate your home temperature: Keep them open in the winter to let in light and drawn in the summer to block the sun’s rays.  Also, turn up your cooling, or your heating down, a degree or two.
8. Wash only full loads of dishes or clothes.
9. Bring lunches and snacks to work.
10. Organise a car pool to travel to and from work, and try to avoid expensive car parking.

In the event something was to happen to your son or daughter which left their family without any means of support, it would most likely be you who the family turns to for support.

Circumstances such as this could place serious financial pressure on your retirement funds and in turn your overall retirement plans, as it did for David and Susan.

David was 15 when he started an apprenticeship at his local steel works. Forty years later, he was still working at the same factory.

His wife Susan had kept the family ticking along, having raised four children to become independent adults with their own families.

After a company restructure was announced, David took the opportunity to ask for a redundancy and succeeded in getting a healthy redundancy package. This, together with his superannuation and accumulated benefits, meant David and Susan were sitting pretty for an early retirement.

Both David and Susan viewed this as a great opportunity to enjoy time with their grandchildren and to travel around Australia.

On Boxing Day of that year, David’s eldest son Rodney had a massive brain haemorrhage and passed away.

And because he was young and didn’t see the need for any life insurance, Rodney left his wife Erin and their three children without any means of support.

As any parent or grandparent would, David and Susan took in Erin and the kids into the family home.

The unplanned financial impact on David, Susan and their retirement plans was devastating and they were unable to do most of the things that they had hoped 40 years of work would allow them to do.

Whether you are already retired or about to retire, talk to your son or daughter about their financial obligations, and make sure they have a plan in place to protect their family’s financial future.

2. To make it easier for you to find exactly what you want, here are the top 10 questions you should ask when choosing a home loan.

1. 3. What loan will suit me best? Review all the features of the loan such as whether you can redraw or pay extra.
2. 4. What is the interest rate? The interest rate will either be fixed or variable and will be used to calculate your repayments. It will determine how much you’ll pay over the life of the loan.
3. 5. How much can I borrow? You will be able to borrow a maximum 80-95 per cent of the value of the property but consider how much you can comfortably afford to pay each month by discussing the monthly repayment amount.
4. 6. What deposit do I need? Most lenders require a minimum deposit of five per cent of the property’s value, and if your deposit is less than 20 per cent, then you may be required to take out Lenders Mortgage Insurance.
5. What fees do I have to pay up front? Make sure you are aware of all the fees involved in taking out a loan, such as loan application fees and government charges including stamp duty, mortgage registration, mortgage transfer and Certificate of Title search fees.
6. What other fees are payable?  Find out if there are any monthly fees or charges for redraw so that you are aware of the costs.
7. What is the total cost of the loan? Ask for the Comparison Rate for the loan you are considering, as this rate includes both the interest rate and most fees and charges payable during the life of the loan which is useful when comparing loans.
8. Are there any benefits available to me when I take out a home loan? It is a good idea to check if your lender offers any benefits for taking out a loan, such as reduced transaction fees and if there is a fee for these benefits.
9. Can I pay the loan off early?  Chances are you may want to refinance your mortgage before the term is complete, so check whether you will be charged a prepayment penalty for doing so.
10. What will repayments be should interest rates increase by three to four per cent? Ask how much your repayments will increase by if interest rates go up by three or four per cent so you can see whether you would still be able to afford a loan if interest rates were to increase.