IT’S 2017 – TIME TO START SAVING
Christmas has come and gone. You have spent too much money on presents and the holiday season. The New Year is the perfect time to implement some simple tips to get ahead and stay there!
SET A SAVINGS GOAL
Set a realistic goal that is achievable. A goal that needs you to show some restraint but at the same time not having to sacrifice too much. Visualise your goal. Studies have shown that visualising your goal makes you more likely to achieve it. It might be a $ value written down or a picture of a holiday destination for example.
SET UP A DIRECT DEBIT
Keep your savings in a different account to your everyday account. You may be able to find one that earns a little extra interest. Set up a direct debit from your everyday account to your savings account.
BE MONEY SMART WHEN SHOPPING
A little bit of extra research can save dollars. It might only seem like a few dollars for each item, but these soon add up. A lot of items at the shops these days end up being discounted. If you don’t need it right away, why not just keep an eye on it and make that purchase once it is discounted.
REFLECT AND REVIEW
Track how your savings are going on a regular basis and if you have got off track, alter course and get back on track.
Constantly think about ways you can save money in your day to day living.
CREDIT CARDS AT CHRISTMAS
Credit cards are a convenient way to pay for the things you want, and ever so tempting at Christmas time, but this convenience can come at a cost. It can be very easy to rack up more debt on your card than you expect or are comfortable with, so it's important to stay in control.
Here are some things to consider whilst using your credit card at Christmas:
1. OVERSEAS TRANSACTION FEES
If you do Christmas shopping online with an international retailer, you could end up paying an international transaction fee worth 2–4%.
2. OFFERS TO INCREASE YOUR LIMIT
Banks sometimes offer you a higher credit limit on your card. If you receive an offer to do this around this time of year if could be very tempting to take them up on this. However, getting a higher credit limit can be bad for your Christmas budget, since the temptation to overspend will be magnified. You could easily end up spending more than you should and paying much more in interest charges too.
3. CONSIDER REDUCING YOUR CREDIT LIMIT
If you want to avoid the temptation to overspend on your card, ask your credit provider to reduce your credit limit. You can do this by phone or by visiting a branch. In most cases, your account will be updated within 1-2 business days.
4. PAY ON TIME
When you get your credit card statement, check the date the payment is due, and make sure you pay on time. This will help you avoid extra interest charges or hefty late payment fees.
To make it easier to pay on time, consider setting up a direct debit to pay a fixed amount off the balance owing each payday. Just make sure these payments cover at least the minimum monthly payment due on the card.
5. MAXIMISE YOUR REPAYMENTS
If you only make the minimum repayments on your card each month, you will pay a lot of interest and it could take you a long time to pay off your balance.
Why not make a plan to get rid of your credit card debt and pay more than the minimum repayment each month.
FINANCIAL TIPS FOR ALL GENERATIONS
We all see money differently and have grown up alongside different financial situations eg. The Depression where there was no money compared to today’s world where many of us are living with a huge debt over our heads. Here are some tips that may help each generation with their finances.
GENERATION Z (teens to early 20s)
This generation tend to want it and want it now! Gen Zs would do well to understand that financial success takes diligence and patience. They would do well to live within their means, creating a budget and spending less than they earn. They have time on their side, start saving, even a small amount each week and putting it away for the future.
GENERATION Y (20s and early 30s
Life is starting to get real for Gen Ys. They may have a HECS Debt, just got married and started a young family and/or bought a first home. Aim to have 3 to 6 months’ worth of salary put away for unexpected emergencies. Consider insurance, especially if you have started a family, both life and income protection. Gen Ys also have time on their side, participate in a retirement savings plan at work, if offered.
GENERATION X (30s and 40s)
Gen Xs may have home ownership, older children, a great career. Time to review your insurances, take care of your health and create a Will.
BABY BOOMERS (50s and 60s)
Baby boomers need to shift their retirement savings into high gear. Visit a financial professional if you haven’t already to ensure your assets are invested to ultimately provide a lifetime of income.
Time to enjoy! First, review the basics – develop a realistic budget and don’t exceed your spending limits. A financial planner can help you determine the best investment strategy to help ensure you don’t outlive your assets.
TIPS TO STAY ON TRACK WITH YOUR CHRISTMAS SPENDING
There is no doubt Christmas is a time to be enjoyed. However, it is an expensive time of year, with gift giving, more social outings etc. It can really stretch the budget. Here are some tips to help you stay on track this Christmas:
1. TRACK YOUR SPENDING
I know it sounds boring, but it will help. Set a budget for things like presents, food for Christmas Day. After each day’s shopping, record what you have spent and what you have left.
2. ‘BAKE’ YOUR GIFTS
Are you a bit of a MasterChef in the kitchen? Why not bake some gingerbread cookies, fruit mince pies or any festive treat. Package them up in some cellophane or cardboard boxes and give these as gifts. A lot cheaper than buying them already made, and I bet they will be a lot tastier as well.
3. RESEARCH AND BE PATIENT
Retail is so competitive these days. Don’t just purchase an item the first time you see it. Research online or wait until a discount is offered. Most retailers are having Different offers each day so you really shouldn’t need to pay full price.
4. SHARE THE COST
If you are hosting Christmas lunch, ask everyone to bring a plate of food. Most people won’t mind and this will save a lot of money and time.
5. DON’T SPEND MONEY YOU DON’T HAVE
Carefully consider putting purchases on your credit card or arranging some kind of quick finance with high interest. You will regret it come January.
NEW PENSION ASSET THRESHOLDS
How will they affect you?
The assets test, effective 1 January 2017 will see some Australians receive the full age pension. However, a significant amount of retirees receiving a part pension will have their retirements reduced and some will lose all entitlements.
There are certain things you will need to consider to ensure your money is working in the best way for you. It might be worth trimming down your assets before the changes come in. Examples include bringing holidays or home renovations forward or maybe moving savings into a spouse’s super.
This government link, https://www.humanservices.gov.au/customer/services/centrelink/age-pension has all the information regarding the asset thresholds and contact numbers for Centrelink to find out how your Age Pension entitlements might be affected.
Whether you are already receiving the age pension or not, it is important to keep abreast of changes to the pension guidelines. It might be worth contacting your financial adviser to explore possible strategies to make the changes work for you.