The 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. Read more…
Posted on January 10, 2012 Financial News & Updates Money Expert Saving Leave a Comment
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. Read more…
Posted on January 6, 2012 Financial News & Updates Investing Money Expert Saving Leave a Comment
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
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.
Posted on December 5, 2011 Financial News & Updates Home Loans Money Expert Leave a Comment
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:
Posted on September 15, 2011 Financial News & Updates Money Expert 2 Comments
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
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:
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
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’:
Further information on scams and how to protect yourself, including a free email alert service, is available on the Government’s website SCAMWatch
Sources:
Posted on July 9, 2011 Financial News & Updates Money Expert Security Leave a Comment
When it comes to choosing a home loan it pays to do your homework. There are great discounts to be had and incentives galore to move your home loan to another lender, but how do you know which one is the best deal for you?
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.
Posted on July 2, 2011 Financial News & Updates Home Loans Money Expert Leave a Comment
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.
Posted on June 15, 2011 Financial News & Updates Home Loans Money Expert Leave a Comment
The week is a Government initiative which aims to help Australians understand cyber security risks and educate home and small business users on the simple steps they can take to protect their personal and financial information.
8 simple tips for better online security
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.
Posted on May 15, 2011 Financial News & Updates Money Expert Security Leave a Comment
While mortgages, loan repayments and bills are a fact of life there are many ways to cut your budget. This includes the more obvious ones such as spending less on clothes and entertaining, but there are also other small changes you can make to your daily spending that will result in savings for you. The best way to start this process is to revisit your budget and determine where your money is going – this will then allow you to make little changes, saving you money without affecting your lifestyle.
Posted on April 21, 2011 Financial News & Updates Home Loans Money Expert Saving Leave a Comment
If you are approaching retirement you should consider protecting your retirement plans and finances by ensuring your children have sufficient cover for their own families.
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.
Posted on April 14, 2011 Financial News & Updates Investing Money Expert Saving Tax Advice Leave a Comment
Establish a plan – how much will you need?
Do some calculations and figure out how long it will take to save your ideal amount.
Break down your goal into monthly or weekly amounts, so you can track your progress. To ensure saving doesn’t seem like a never-ending ordeal, set yourself a time limit to save for a deposit.
Seek as much advice as possible from experts such as financial planners, accountants and your financial institution. Rather than simply saving, you may be able to negatively gear into investments such as managed funds, thereby using the tax advantages to help your savings grow.
First things first – clear those credit cards!
Credit cards can be an expensive means of borrowing, and you should eliminate credit card debt if you are serious about your savings plan.
Cut down those expenses
Set yourself a budget and keep records so you can track exactly where your money is going.
Small sacrifices along the way certainly help. For instance, using public transport, taking your lunch into work and controlling the use of your mobile phone.
Establish a good savings history
Start a separate savings account to the one you use on a daily basis, so you are not tempted to use it for everyday living and transactions. Think of it as a deposit account and choose one that rewards your savings with a high interest rate return, such as a term deposit. Make sure there are no account keeping fees that will eat into your savings.
Getting to know your financial institution
Establish a relationship with your financial institution so that they are aware of your disciplines, repayment capability and employment history.
Borrow within your means
Make sure you borrow within your means. Speak to your financial institution and work out what you can really afford to pay as a monthly repayment. You need to be able to still enjoy your life – purchasing a property is a great achievement, but it is not worth sacrificing your happiness.
Understand the financial matters within home ownership
The first home owners grant of $7,000 provides a great start for first time borrowers. However, you also need to allow for associated costs such as borrowing fees, conveyancer costs and other adjustments. A good financier should willingly provide you with guidance and advice in planning for these and other ongoing costs of first home ownership.
Posted on March 15, 2011 Financial News & Updates Home Loans Money Expert Saving Leave a Comment
Whether you are purchasing a new or used car, buying a car is a very exciting time – but there are many things to consider.
Here are our top 10 tips:
Posted on January 15, 2011 Car Loans Financial News & Updates Money Expert Leave a Comment
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