1. Credit card myths – and how to spot them

    There are a lot of credit card offers out there, from banks, credit unions, building societies, airlines and department stores, to name a few, but how do you identify the really good offers from the rest?

    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

     

    Posted on February 20, 2012 Financial News & Updates Money Expert Saving Leave a Comment

  2. Teaching children the value of a dollar

    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

     

    Posted on February 8, 2012 Financial News & Updates Money Expert Saving Leave a Comment

  3. #1 Clubs, Groups & Charities Fundraiser Tool for 2012

    We know you have spent many Saturdays turning sausages for your local footy team or filling your freezer with pies or lamingtons after the inaugural bake sale.

    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

     

    *Only available within our Branch network. Full terms, conditions, fees and charges are available in the Product Guide and Fees and Charges booklets
    (communitycps.com.au).  These booklets are available on request, on the website and will be provided at the time of acquiring the product.  Before acquiring the product you should consider if the product is appropriate for you.

    Posted on February 2, 2012 Community Financial News & Updates Money Expert Saving Leave a Comment

  4. Are you bushfire ready?

    Record rainfall last year has resulted in a blanket of grass transforming large parts of Australia, which could prove to be a significant fuel source for bushfires this summer. ¹

    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

     

    1 http://watoday.domain.com.au/real-estate-news/be-prepared-for-bad-bushfires-says-emergency-service-20101028-174hh.html
    Our insurance is issued by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL 234708. Community CPS Australia Ltd (incorporating United Community, Companion Credit Union and Wagga Mutual Credit Union), AFSL 237856 ABN 15 087 651 143 acts as an agent of Allianz and not as your agent. Any advice here does not take into consideration your objectives, financial situation or needs, which you should consider before acting on our recommendations. Before making a decision about this insurance please refer to the relevant Product Disclosure Statement available on 13 25 85 or www.communitycps.com.au.
    Sydney Morning Herald, 29/10/2011 – After the floods, grassy plains fuel fears – http://www.smh.com.au/environment/conservation/after-the-floods-grassy-plains-fuel-fears-20111028-1mo2l.html#ixzz1jDMCq1V8

    Posted on February 1, 2012 Financial News & Updates Insurance Money Expert Leave a Comment

  5. Land Rent Scheme eases Canberra’s housing affordability

    home loan affordabilityIn partnership with the ACT Government, we developed and implemented the Australian Capital Territory’s Land Rent Scheme two years ago now. The aim of the scheme is to offer the local community home loans  for houses built on land rented from the ACT Government.

    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

    Posted on January 27, 2012 Financial News & Updates Home Loans Money Expert 2 Comments

  6. Managing the Christmas credit card hangover

    Credit Card

    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>

    Posted on January 20, 2012 Financial News & Updates Money Expert Saving Leave a Comment

  7. Find the best home loan product – with key fact sheets

    Home Loan FactsAs of 1 January 2012, the Australian Government requires all lenders (banks, credit unions and building societies) selling standard home loans to provide consumers with a Home Loan Key Facts Sheet (HLKFS) about their standard variable and fixed rate home loans, if they ask for one.

    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

    Posted on January 18, 2012 Financial News & Updates Home Loans Money Expert 2 Comments

  8. Give your accounts a health check!

    Account health checkThe start of the year is an ideal time to give your bank accounts a quick health check. 

    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>

    Posted on January 10, 2012 Financial News & Updates Money Expert Saving Leave a Comment

  9. New Year’s investment resolutions

    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>

    Posted on January 6, 2012 Financial News & Updates Investing Money Expert Saving Leave a Comment

  10. Keeping a lid on Credit over Christmas

    The festive season is synonymous with overindulgence. But along with some unwanted kilos, Christmas can also leave us lumbered with a bloated credit card debt.

    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. Read more…

    Posted on December 19, 2011 Financial News & Updates Money Expert Saving Leave a Comment

  11. When Your Parents Really Want You to Leave the Nest!

    More younger Australians are taking up Parent Equity home loans as they look to take advantage of today’s favourable market conditions for first homebuyers.

     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.

    Read more…

    Posted on December 5, 2011 Financial News & Updates Home Loans Money Expert Leave a Comment

  12. Credit unions vs banks – who are the biggest winners?

    Credit unions are financial institutions that offer the same products and services as banks – more than 4.5 million people are members of Australia’s 109 credit unions and mutual building societies.

    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.

    Posted on September 15, 2011 Financial News & Updates Money Expert Leave a Comment

  13. Don’t put all your eggs in one basket

    Understanding investment risk is vital for the development of a successful investment plan. While every investment has potential risks, they can be managed and minimised.

    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.

    Posted on July 23, 2011 Financial News & Updates Investing Money Expert Saving Leave a Comment

  14. How to get the most out of your tax return

    Tax time is here so it is time to start getting together your PAYG summaries, statements and receipts. Once you’ve gathered all your paperwork, it’s important to understand exactly what you can claim to help you make the most of your return.

    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.

    Posted on July 16, 2011 Financial News & Updates Money Expert Tax Advice Leave a Comment

  15. Are you being scammed?

    Every year 1 in 20 Australians fall victim to scams and personal fraud. Scams come from many sources – they may originate from unsolicited telephone calls or emails or may be in response to an advertisement you have placed in a newspaper or online.

    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

    Posted on July 9, 2011 Financial News & Updates Money Expert Security Leave a Comment