OUR COMFORTABLE RELATIONSHIP WITH DEBT

There is no doubt about it, Australians have some of the highest amounts of debt in the Western world. 

This is growing due to the attitudes around finances with younger Australians.  Millennials were found to be around twice as likely as the average Gen X or Baby Boomer to believe they could not maintain their lifestyle without borrowing, or without borrowing, they ‘would not have any quality of life’.

In the last 12 months, Millennials have applied for more than twice as many credit cards, mortgages, and personal loans as the average Gen X or Baby Boomer. (Canstar.com) 

It has never been easier to spend money you don’t really have with the offers of credit cards, zero per cent balance transfers, interest-free store loans etc.  flashed in our faces constantly.

You may not see an issue with this whilst you have a well paying job, equity in your home  and a good economy.  However, it could cause major concern if the situation were to take a turn for the worse. The sudden loss of a job or a serious illness of a family member could place significant stress on the household and impact upon your ability to maintain repayments. A small decline in house value could see you in a position where your home value is less than your mortgage.

Debt is really about spending money you don’t have.  It is easy to then, spend more than you earn.  It is important you understand and know exactly what comes in and out of your bank account and developing a way to track this.  And if you are in too much debt working out a plan of attack to reduce this debt.

SAVING ON YOUR EASTER GETAWAY

Taking the time for a trip away over the Easter long weekend sounds fantastic. But it needs planning. Not to mention the price hikes that always seem to take place just before Easter, so you’re paying 20 cents more per litre for fuel and accommodation, costs triple over normal prices.

If you can avoid going away for Easter, you will be saving so much that you could probably afford to go away for a week, somewhere even nicer, at another off-peak time. You will also save yourself from stress of being stuck in traffic on a 3 hour trip that’s ballooned out to 7 hours (I speak from experience!) or at the airport, with what seems to be half the city, waiting to board a delayed flight…

Stay at home and enjoy time with the family. Take the kids to the local park for a picnic and you’ll probably have it all to yourself, and for free. Check out some of the local sights, you might be surprised at some of the beautiful places not 20 minutes away, that you have never seen. You can take your visitors there next time they come.

If you absolutely must travel at Easter, make sure your car is prepared and you have plenty of water, and maybe a snack or two on hand for those hours sitting in traffic, if it’s a road trip you’re going on. For air travel, make sure your devices are charged to 100% just before you leave and you’ve got some entertainment installed on your phone or tablet. Most importantly for either case, dress comfortably!

For overseas travel, check that your credit/debit card doesn’t charge foreign transaction, foreign exchange or foreign ATM fees. These very quickly add up, especially for big sums like accommodation or flights, which sometimes add their own credit card fee to the mix.

Whatever you do, try to relax this Easter - and look forward to a nice trip away some other time.

PENALTY RATE CHANGES - WHAT THIS MEANS FOR EVERYONE

I am sure you would have heard, the Federal Government has agreed to cut Sunday penalty rates for hundreds of thousands of Australian workers. 

According to the Fair Work Commission, the cuts will lead to increased services and trading hours on public holidays and Sundays.

WHAT THIS MEANS FOR THE EMPLOYEE

The workers who will be hardest hit are those in the retail, hospitality and fast food industries.

Australians who rely on penalty rates generally earn a relatively low wage. The ACTU estimates the FWC decision will cost low-paid workers up to $6000 a year.

WHAT THIS MEANS FOR THE EMPLOYER

Small business owners are cheering. Employers in these industries are the ones who have been pushing for these cuts. They say the penalty rates have hindered their business by making it too expensive to operate efficiently on the days that demand extra pay.

WHAT THIS MEANS FOR THE CONSUMER

This could mean the end of public holiday surcharges or is this wishful thinking?

Consumers can expect to pay no less for their Sunday breakfast, however the decision could mean increased trading hours on a Sunday.

You can read more about the decision here http://www.fairwork.gov.au/pay/penalty-rates-and-allowances

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FINANCIAL PLANNING KNOWLEDGE FOR WOMEN

Did you know that currently only 10% of Australian women retire with enough savings to fund a comfortable lifestyle.  Recent studies also show that 2 in 5 Australians lack confidence when it comes to financial decision making.

It is vital for women to build their financial literacy.  It can mean a change or improvement to your whole way of living.  It can mean the difference in enjoying a comfortable retirement or depending on social services like the pension alone in retirement, just to make ends meet.

WHERE TO START

Women are already on the back foot with gender pay gap issues.  Although these have improved over time, women’s salaries are still 17.3% lower than those of men doing the same job. 

Women tend to retire earlier than men, and live longer.  Another vital reason you need to ensure you money will last the distance.

This makes it doubly important for women to improve their financial literacy and make the most of their money. 

PAY OFF YOUR DEBTS

The first step is to make your number one priority paying off your debts.  Consider whether you really need that credit card and pay extra on your home loan if you’re in a position to do so.

INVESTING IN THE FUTURE

Overall, women are generally more cautious when it comes to investing, which isn’t a bad thing, however they could be missing out on bigger returns.  Ensure your investment/s match your stage in life.  This will help ensure your investments have the best chance of growing over time.

I AM HERE TO HELP

Everyone’s circumstances are different and there isn’t a one size fits all.  This is where I come in.  To make the best decisions for your money it is important to ask questions. Your financial adviser is here to help you make wiser financial choices.

I am available for a 30 minute free consultation.  Please don’t hesitate to contact me via this link https://amandamccall.com.au/contact-financial-services-brisbane

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LOVE AND MONEY

Couples keeping their finances separate is a growing trend in Australia.  To keep finances separate or combined is an important conversation to have with your partner and potential husband/wife.  There is no right or wrong answer, at the end of the day it is about whatever works for you.  However, talking to your partner about money is important and whether you have similar or different spending and saving styles.

Here are some guidelines to get the conversation started:

YOUR RELATIONSHIP

What are your goals and plans for the relationship?  Do you plan to marry, buy a home or have a baby in the near future?

YOUR CURRENT FINANCIAL STATUS

Do you have any outstanding debts?  Will this jeopardise your relationship goals, particularly if not discussed?  Deliberately hiding your finances from your partner is dangerous.  It is important to be upfront about any debts you may have? Are you able to reduce your spending to save for your goals.

YOUR SPENDING AND SAVING HABITS

Are you a spender or a saver?  A recent survey found that 22% of couples kept some spending habits from their partners, predominantly on clothes, gambling and guilt foods.

WHO WILL BE CFO?

Will one person look after household expenses, mortgage and savings, or will you share the responsibility? Make sure you're both happy with the decision.

Communication is the key to any strong relationship.  If you and your partner share the same attitude to money and be open and discuss ongoing money concerns, you will build a secure future for yourselves.

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