SHOPPING FROM THE COMFORT OF YOUR COUCH… costing you more than your waistline

For generations we have prepared our own food at home resulting in a more positive impact on our bodies. We were more likely to eat smaller portions, take in fewer kilojoules, less fat, salt and sugar tending to make us healthier in weight and better general health.

So why are we not cooking as much anymore?…

1. WE ARE BUSY

2. TOO MUCH CONVENIENCE

Australians are increasingly using apps and online payment methods to shop.

Sadly, for many of us, we use mobile apps to spend money more than we use it to track and manage our money.

Here’s how we spend our money

Australians are spending an average $328 a month on food, movies and music delivered
to their doors or downloaded on devices.

This is purely based on what is delivered to our home without us even leaving the house.

A third of Australians living in capital cities order food through online delivery services such as Menulog, UberEats, Deliveroo and Foodora.

Even our relaxing Friday night drinks at home is changing. The local ‘bottle-o’ is being replaced by delivery apps like Tipple and Jimmy Brings. We do not need to make a stop on the way home or head to the pub for our grog. With a click of a button, it can be delivered to us in under 30mins.

So, if you order in… AND you are adding this to your buy-now-pay-later shopping through Afterpay, Zippay and the like, you could very well jeopardise financing your next loan if not used sensibly.

This is made even more dangerous if you are an impulse buyer prone to overspending. Why? Well…

The facts don’t lie. Users admit that…

• 30% have missed at least one Afterpay payment – penalties apply

• 65% said the ability to make smaller payments influenced them to make purchases they wouldn’t normally make.

Nearly 50% of users said they SPENT MORE using afterpay than using a debit or credit card

Therefore, with our modern busy lifestyles, we are creating a real disconnection with what we are actually spending – convenience spending is making us lazier and unhealthier consumers.

We all know people who live less than a five minute walk from restaurants, yet still order-in!

Why are we concerned?

Because of the sheer transparency of the way we spend our money – ‘Big Brother’ is watching our every move. Along with tighter lending criteria, lenders also have greater visibility over our spending. As your finance specialist we find ourselves spending more time and effort than before to help our clients develop strategies with their finances because many of us are totally disengaged with our actual financial status.

Have you noticed that your bank now groups your transactions into categories such as groceries, utilities, cash out, retail spending etc on your online statement and app?

Lenders use this information and now have the technology to review and evaluate the risks for your loan assessment.

There can be a variety of reasons a lender may reject a loan application

Perhaps you’ve renovated, are paying off holiday expenses on a credit card or have bought a new car. As your finance specialist, we can ensure you are ‘loan application ready’ by favourably drafting your situation to the lender that is most favourable for your circumstances. This is often missed by going directly to the bank yourself.

So… how else can WE help?

Our expertise will help you review your spending and budgeting habits to provide you with the best plan for improving your chances of approval before applying for your next loan.

An accurate assessment of your situation and home loan readiness will help you move forward with confidence.

If you are thinking of applying  for a new loan, reach out to us  for our checklist:  ‘The top 9 things you should know before applying for a home loan’.

Feeling Sad?

Seasonal Affective Disorder….5 ways to beat the winter blues

Have you found yourself full of energy during the warmer months but as the cold winter weather closes in, you begin to lack energy, sleep more and lose pleasure in things you would usually enjoy? There is a name for it… Seasonal Affective Disorder or SAD.

According to Beyond Blue, the symptoms of SAD are much like depression – feeling hopeless, a lack of energy and changes in sleeping or eating patterns. Medical professionals put much of this disorder down to a lack of sunlight.

Less sunlight can mean our bodies produce less melatonin, the hormone that aids sleep. Less sun can also mean less serotonin, a hormone that affects mood and appetite as well as sleep. Sunlight also affects our internal body clocks.

While SAD is rare in Australia, many people do report feeling flat and lethargic during the cooler months of autumn and winter. Of course, if these feelings are chronic and persistent, it is best to seek professional health advice, but for many of us some simple actions can help to keep the blues at bay.

1. Bask in the sun

Make an effort to go outside more often. It can be as simple as sipping your morning cuppa on a park bench. Vitamin D is known as the sunshine vitamin and is essential for building healthy bones, strong muscles and overall health.

However too much sun exposure will increase your risk of skin cancer. On sunny days, maybe enjoy a walk, run or cycle alone or with company.
Keeping your home as light as possible and sitting close to the window more often can help with your general wellbeing during these cooler months.

2. Keep up the exercise

Exercise does not need to be extremely vigorous to be helpful for depression – a brisk walk each day can be beneficial. If the weather is gloomy, indoor exercise can help too. Be it yoga or maybe even a deep clean of your house for a ‘light’ workout!

3. Ensure good sleeping habits

To drift off into a restful sleep: keep a regular bed time, avoid stimulants before bed (yes, being on social media on your mobile counts) and get plenty of exercise during the day. Give yourself time to wind down from the day’s activities.

4. Eat healthy winter foods

Eating ‘happy foods’ can positively impact our moods. Nutritional studies suggest a diet including Omega-3 fatty acids and gut-friendly foods boosts mood regulation. We also know that grandma knows best. That warm cup of milk before bed may do the trick as well.

5. Find time for relaxation

Make time in your day or week to relax – take a nice warm bath, try some guided meditation or something that relaxes you. This is particularly important if you find your mind racing constantly and hard to settle into a good rest.

As humans, we are born social beings hence having a good support outlet for our feelings is essential to our wellbeing. Solitary confinement would not be considered a form of torture if this is not the case, right?

Taking these tips on board can help keep your health and wellbeing in check at any time of the year but may just help brighten your cold winter days.

Remember, not only are adults affected by SAD but children are too! So if you see young ones in your family a little ‘less themselves’, take them out into the open air and have some fun together! Having an icy cold gelato snuggled up on a picnic rug and having the chill air blowing on your face can be kind of fun for the family too.

Everyone is an EXPERT….Be careful who you listen to….

Have you ever been given advice from your family, uncle John or friends about what is the best loan and where the best properties are? Why you should invest in property and why you shouldn’t? It should be negatively geared, it should be positively geared… and so on.

Even people who have never invested in property feel they have the right to tell you why it is good or bad based on their own perspectives (and mostly without evidence or experience).

People’s opinions are so subjective. So you really do need to take care of who you listen to in this world of information overload and ‘online experts’.

Did you know that we (collectively across the globe) conduct about 40k of searches per SECOND on Google? Yes, you read correctly – per SECOND, not minute, and this is just on Google.

With such astonishing figures, have you ever wondered how creditable the data is that we search for every day? Furthermore, most of the data has only been generated in the last few years.

Although money does not mean everything to everyone, it certainly affects your life if you obtain incorrect information and advice. With so much information out there and with such ease of accessibility, please don’t listen to ‘experts’ who don’t have runs on the ground.

YOUR MONEY is at stake here not THEIRS and you need to do your own research. 

In regards to finance…

The good news is – the finance industry in Australia is now highly regulated. As your finance specialist, we are not only accredited but are obligated to remain informed and responsive to the constant industry changes, regulations and the vast array of products we offer through different lenders to maintain our various accreditations each year.

Q. How do I find a creditable mortgage broker?

Generally, look for people or organisations who:

• are qualified, accredited or licensed in their field

• have credible experience and sources

• are approved members of relevant professional industry associations

• provide you with quality professional industry information and commentary

• have genuine and positive client testimonials

• are most interested in YOUR situation and goals

Q. When is the best time to engage a broker?

Simply put, because we act in your best interest at all times, anytime is the best time. Ideally you should contact us before you make any decisions or changes to your finances.

As your finance expert, we discuss your goals, then explore the range of financial possibilities that are not unsuitable for your financial situation. We then document and submit your application to the lender we choose together to provide you with the best possible outcome for loan approval.

Q. Can’t I simply choose the lowest interest rate?

NO, please don’t! It is not always just about finding the lowest interest rate!

There are many considerations for obtaining finance: fees, types of loan, features of the loan facility, lenders’ mortgage insurance, length of your loan, structure of the loan and your accounts. The list goes on.

Typically after completing the finance exploration session with our clients, although extremely important, we find that the lowest interest rate IS NOT always your most vital consideration when securing finance.

Due to the complexity of our product range and enormous variety of options it is always wise to use our in depth knowledge and expertise to your advantage because we work for YOU not the lenders.

PLUS we save you an incredible amount of time by doing all the research for you. Why would you consider trying to find your own finance solution?

In regards to helping you with investing in property…

There are also many ‘experts’ out there as well. So make sure you call us first to head in the right direction.

How Interest Free Loan REALLY Work…

Interest free loans can work in a number of different ways:

Pay by instalments – regular payments are required each month.

Buy now, pay later – you are not required to make any minimum repayment.

WHAT YOU NEED TO KNOW

MINIMUM PAYMENTS – In most instances the minimum repayment will not be sufficient to repay the loan during the interest free period. If you wish to repay the loan within the interest free period you will need to make additional payments each month.

BE AWARE: In some instances you will need to make arrangements with the financier to make these additional payments otherwise the additional amount may be held in credit against future minimum repayments.

INTEREST RATES – Interest will start to be charged at the end of the interest free term, usually at a very high rate. It is not uncommon for these interest rates to be in the high 20%s or even higher.

BE AWARE: Worst still is that penalty interest may be charged for not paying the balance off within the interest free period.

PAYMENT DEFAULT – If you default on the loan (eg miss a repayment during the interest free period) it is not uncommon for the loan to cease being interest free with commercial rates of interest being charged moving forward.

TIP: It is best to set up regular direct debts from your bank account to ensure that all payments are made on time.

NO DISCOUNT – Ever notice that when you buy an item with an interest free loan that the retail attendant will never discount the purchase price? This is because the retailer is not generally the financier and there is a third party. The retail store will normally share a percentage of the sale price with the financier to ensure that the financier receives some payment in the event that you repay the loan within the interest free period.

HIGH FEES – Even though there may be no deposit and interest, most loans do charge application and monthly fees.

BE AWARE: It is not uncommon for these monthly fees to be $4.95 per month, being nearly $60 per year.

COMES WITH A CREDIT CARD – Some financiers offer a credit card with the loan to tempt you to spend more.

BE AWARE: Most of these credit cards have interest rates significantly above other credit cards available in the market.

HOW TO TAKE ADVANTAGE OF INTEREST FREE LOANS

WORK OUT THE NUMBERS – Ask the retail assistant what discount would be available for a cash sale then determine the monthly charges to calculate how much the interest free loan will actually be costing you.

REPAY DURING THE INTEREST FREE PERIOD – Make sure you repay the loan IN FULL within the interest free period to avoid default interest or extremely high rates of interest.

If you REALLY, REALLY need the item and have a mortgage, an option MIGHT be to redraw the amount as your home loan should have the lowest interest rate. BUT PLEASE, PLEASE BE AWARE that unless you pay additional monthly payments and have the goal to pay this portion off as soon as possible, you may actually be adding this debt to your 20 year home loan. And that will not be a good decision.

If you are struggling with your credit card and store card debts we recommend you call us for a full finance review before you consider taking on any more debt.

It is always wise to call our office before considering any new debt. We will let you know about all the hidden and long term costs of interest free and other loans to make sure you understand the consequences of your decisions.

Interest free doesn’t mean cost free

Tempted to buy that new lounge, home theatre system or television but don’t have enough money to pay for it right now?

Before you sign on the dotted line for in-store interest free finance, think carefully and read the fine print. More importantly, do your research! Well… we have done this for you!

Many retail stores offer interest free payment terms, especially during the end of financial year sales. But beware! These ‘interest free’ deals that allow you to take your goods home and pay them off over time aren’t always cost free!

Choices, choices, choices

Not only can you get ‘interest free’ store purchases, there are ‘interest free’ credit cards and ‘interest free’ loans – well ‘interest free’ within a certain timeframe that is.

They all have their own features, benefits and pitfalls.

Usually with in-store interest free deals, you are provided with a store card or credit card with a credit limit to cover the cost of your new purchases. These deals typically have a higher limit than the goods you are purchasing.

It is not uncommon for stores to offer various interest free deals as they really want your business. Their range of options attracts different clientele. We have seen the mega chain store giant, Harvey Norman, offering seven different interest free options at one time!

And of course there are the buy-now-pay-later options with Afterpay, Zip Pay and the like (that’s a whole other topic) that have very similar features. However these options also require thorough consideration before taking action.

Did you say 29% interest rate?!

Retailers have different offerings and their payment terms will vary, so it is important you read all the conditions for each loan option as they will differ.

For example, the interest rate you will be charged if you haven’t repaid the balance by the end of the interest free period can be as high as 29%. That is even higher than most credit cards!

Make sure you calculate your regular payments to ensure the balance is paid off before the end of the interest free period. It is wise to set up automatic direct debits so you don’t miss any payments. This case study by ASIC’s MoneySmart shows you why.

Case study: Ron and Maya compare interest free deals

A young couple, (Ron and Maya) discussing interest free deals, both got interest free deals but for different amounts.

The interest free deal worked out well for Ron as he increased his repayments to pay off the deal in time.

But Maya just left her repayments at the minimum amount and ended up being charged 29% interest and still owed a lot at the end of the interest free period.

Details:

Purchase $2,000 couch

Interest free period – 12 months

Repayments – $200 monthly

After 12 months – Fully paid off

Outcome – Happy with the deal

Maya’s deal

Purchase – $1,500 fridge

Interest Free Period – 12 months

Repayments – Minimum repayment

After 12 months – Paying 29% interest on a $1,000

Outcome – Stressed with more debt

If your interest free deal comes with a credit card – BEWARE! Additional purchases won’t necessarily be on the interest free terms and you could end up paying high interest rates on those additional products immediately. Plus, there is always the temptation to buy ‘something else’ with the remaining credit available.

Nothing to pay! No deposit! No interest?

Sounds too good to be true? Well it usually is. These catchy headlines may draw you in-store or online but there are fees associated with your shopping that may include application, processing or account keeping fees.

Interest free finance arrangements can be a great way to reward yourself with some of the finer things in life – or even practical purchases like appliances when you are home making. But these arrangements are only beneficial for those who are regular on-time payers. Otherwise you may find yourself just like Maya and stressed with more debt – and of course we don’t want that!

Remember: every credit application, loan, credit card AND interest free deal you have will go on your credit report and can affect your future borrowing power. Many Australians take out interest free finance without realising it is actually a loan and the penalties in the end can be high.

We leave you with two key thoughts on interest free shopping:

1. You have to be able to afford the repayments and ideally pay the item off before the interest free period expires. You don’t want to put extra pressure on your cash flow.

2. If you only pay the minimum monthly repayment you won’t have your purchase paid off by the end of the interest free term and you will be slugged with high interest and more fees.

If you are one of the 1.6 million Australians who already have 3 or more credit cards, perhaps another interest free deal isn’t for you! Saving or the good old fashioned lay-by may be the answer.

Before you are tempted into interest free shopping, please call us, even for those new small debts. We can help you make the right decision to reward yourself now and in the future.

Top 11 Disciplines for Financial Success

  • Spend less than you earn

champagne taste on a beer budget?

  • Pay down non-deductible debt first

Any debt that doesn’t make you money or create your wealth should be paid down first. Start repaying your store and credit cards and personal loans then your home loan BEFORE your investment debt. For every $5,000 racked up on your credit card, you are affecting your property borrowing capacity sometimes by about $30,000 or more.

  • Pay off your highest interest bearing credit card fast

Paying off a credit card with a 27% interest rate will allow you to feel awesome. When you apply your existing payment that was previously used to pay off the high interest rate card to another card debt, watch the balance drop significantly in a much shorter time frame.

  • Think carefully before taking on any new (or bad) debt

(including credit cards, Afterpay/Zip Pay, personal or car loans). Not every 0% interest (or low interest) rate is what it seems. Always check with your financial adviser (us) first, BEFORE taking on any new debt. If you start to shop around yourself, you could very well damage your credit rating and end up not being able to borrow at all for a longer period of time.

  • Spread your indulgences over a longer time frame

Yes, you need to be rewarded for your hard work and discipline. So when you DO indulge, spread it across the year or over several months to take advantage of maintaining your budget, cash flow and to reduce any more financial damage.

  • Revisit the way you are using and spending your money often

Sometimes we drop out of good habits. Don’t beat yourself up, just jump back into the flow and get cracking again.
Invest in good quality objects/clothing that will last as opposed to grabbing possessions in sales that you will only use on a few occasions or perhaps never use at all. Quality over quantity is a good mindset to have in the world of saving, finance and investing.

  • Invest in good quality objects/clothing that will last

as opposed to grabbing possessions in sales that you will only use on a few occasions or perhaps never use at all. Quality over quantity is a good mindset to have in the world of saving, finance and investing.

  • Prepare for life’s unexpected financial events.

Have a rainy day account to avoid upsetting your plans. You don’t need any excuses to stop your progress and results.

  • Don’t be afraid to ask for help.

BUT – be careful who you listen to Sometimes those who give us advice are the ones not following their own advice or have little knowledge and/or success themselves. Remember, we are only a phone call away.

  • Be positive about the future

What we think about comes about, so be careful what you focus on. Looking at your debt will bring more debt. Look at your equity and asset growth instead!
Educate yourself, then take massive action “To know and not do is really to not know.” Stephen Covey. There is a lot to do to achieve financial success. Don’t try it alone.

Call us to arrange a catch up. We can discuss your personal needs and help you get on track financially.

Technology has changed the way we use and value money.

Apart from all the physical, emotional and family effects, mobile technology has changed the way we use and value money.

We live in a world where we don’t see physical money often. Online purchases are made and cards are tapped or swiped.

Data from comparison site finder.com.au reveals if current trends continue, physical cash could vanish in Australia as soon as 2026.

Children’s games on tablets are purchased online without a hint of any notes or coins being exchanged.

How do they learn to check change or even add up their bills?

How will children learn the real value of money without seeing, touching or paying with it?

Children lack the connection between themselves and the day to day essentials to live in this world.

How will they form an understanding of life skills?

Guiding money-wise kids

Here are a few tips to help your kids to be money-wise:

1. Explain ATMs – how and where the money comes from

2. School banking – if your school has a banking program, open an account, contribute money as a reward and set an end of year goal to withdraw

3. Explain debit and credit cards – that they have to be paid off, topped up with money and that purchases are not free

4. Pay pocket money electronically – set up an online bank account and contribute money for chores and homework. Once they are old enough to manage their own bank account, transfer the money over and teach them how to use ATMs (if they are still around), and to read and check receipts

5. Start educating them about the world of finance from a young age – start with the simple money jar or piggy bank

And for the teenagers, check out the show on ABC ‘Teenage Boss’ hosted by mathematics teacher Eddie Woo.

It follows fifteen teenagers from across Australia as they take control of the family finances for a month, with some surprising and not so surprising results.

Being money-wise is important to us. We can help guide you on the right budgets and investment decisions for a successful financial future – and one to teach your children and grandchildren.

Contact the office today for a confidential discussion if you or your young adult children need help with managing their finances.

Australians’ love affair with property

Why people DO it

Around 20% of Australians invest in property for:

• potential capital growth

• rental income

• tax benefits

They tend to consider property one of the more solid, less volatile forms of investment because you can actually touch bricks and mortar.

They like the feeling of getting ahead financially.

They don’t want to be one of the 80% of Australians who have to rely on the aged pension when they retire

Why others DON’T

They:

• need more information to take the first step

• don’t know how to ensure their investment is not threatened by interest rate rises or unreliable tenants

• aren’t sure about how to pick appealing properties for good rental return

• don’t realise they can probably afford it – even if they don’t have a big salary

• think all debt is ‘bad’ and haven’t realised that an investment property could make them money and even pay for itself

Here are some time-tested strategies to help overcome common initial jitters about investing in property. Getting an education from people who are investors themselves is the fastest way – go to those ‘in the know’.

1. Being comfortable with your debt level and being able to afford the repayments

Borrowing to purchase income-producing assets such as investment properties is considered by financial experts as ‘good debt’. Rental income is generally used to pay the mortgage and expenses whilst the owner benefits from any capital growth in the value of the property. Bank guidelines also reduce your risk because they simply won’t lend to you if they don’t believe you can repay the debt (and they also allow for interest rate rises).

2. How to keep making payments on your investment property if you lose your job

Positive cash flow property – This is where your rental income exceeds the mortgage payments and property expenses. Direct the excess rental income into your offset account and hold it there as your ‘rainy day account’ to cover loan repayments if you find yourself unexpectedly unemployed or financially strained.

Negative cash flow property – Negatively geared property is when the mortgage needs ‘topping up’ from your income.

Your property deductions/out of pocket expenses may help you to secure a tax refund at the end of the financial year. Save your tax refund as a buffer. Alternatively, your accountant can help you request access to your tax refund for a reduction in your weekly tax. Put this extra amount aside each week and it will help accumulate a buffer to maintain the property in the unfortunate event that you lose your job or your income is reduced.

3. Risk of not securing a tenant

The best way to mitigate this risk is to carefully select a property with high rental appeal. Only buy in high rental areas where the vacancy rate is consistently less than 3%. It is also sensible to select a property manager before you settle so they can secure tenants immediately.

4. Possible problem with bad tenants

How do you pay the mortgage if the tenants don’t pay their rent? Or pay for repairs or damage caused if they ‘do a runner’? The answer is landlord insurance to cover any losses. The cost of this insurance is minimal when you consider the cost of not having it – and it is tax deductible as well.

5. Coping with interest rate increases

Changes to interest rates are a fact of life. If you are going to invest in property allow for interest rate increases and only purchase property that you can afford to hold onto even if rates rise.

6. An exit strategy is your ‘pull the pin’ plan

It is best to put this plan together in the cool light of day, before you buy, because doing it under pressure can lead to the wrong decision. An exit strategy gives you peace of mind and allows you to sleep at night.

Call our office today and make an appointment to discuss your property investment plans. You’ll need a clear idea of how much you can borrow before you start looking at properties.

Technology and Kids

A state of insufficiency

We all know that technology has become an increasing part of our everyday lives across all generations – and none more so than children.

In fact, Australian children as young as four and five years old are spending 2.2 hours each week day watching screens. Those numbers increase to 3.3 hours by age 12 and 13 and longer on weekends.

Effects of technology are long and varied

The long and varied list of the effects of technology include online addiction, access to inappropriate content, reduced physical activity, security, hacking, online predators, sleep difficulties and family conflict.

Amongst the problems cited above, technology can affect family wellbeing and harmony.

Television has been around since 1954 and in Australia since 1956. Back then those who were fortunate enough to have one often watched television as a whole family activity. But times have changed.

New technology offers children independence from their parents’ involvement in their social lives with social networking and messaging sites. Parents see it as a loss of connection – but it is not all the children’s fault.

Parents can be just as much consumed by technology as their offspring. In fact, if you have an iPhone, check out your daily and weekly screen time usage. It is alarming. As adults, we typically use our smartphones not just for communication but as an ‘escape’ to the online world of social media – seeing what others are doing, browsing and even reading books.

Most of us have our work and personal life all in one phone. That ‘ping’ we hear during family dinner time or even when we sleep may be an email from the office or calendar notification of some sort!

Children are born to learn

Children are born to learn, to socialise. We have known for decades that without social interaction and relationships, we are denied connection and bonds – a core part of being human – as explained in Maslow’s theory of a human’s basic needs.

Modern family life often consists of TV dinners and TV (or iPad) baby sitters which seem to be the way of life now. Yet we have all heard about the numerous studies and warnings on how harmful these are for our society and the impact this will have in generations to come. We are already seeing the scary evidence.

Effects on children’s learning

A former teacher and education and technology researcher, Kristy Goodwin, studied the effect of technology on children’s learning which was highlighted in an SBS Insights segment.

Although there are benefits to using devices to create digital content for storytelling, movie making, creating animations or coding, there are also many complaints.

Screen time causes myopia – a condition of the eye where light focuses in front of the retina instead of on the surface, resulting in blurred vision.

The research showed that the premature introduction of screens, before the eyes have time to develop, was a cause of the condition. Another common complaint when it comes to kids and technology is the way screens can captivate and hijack their attention. There are two main reasons why we all find it so hard to digitally disconnect.

The state of insufficiency

1. The brain releases neurotransmitter dopamine. Looking at social media will give our brain dopamine hits. Dopamine is associated with the pleasure system of the brain. This in turn motivates us to do, or continue to do, certain activities.

2. When we’re online, particularly on our phones, Goodwin says “…we enter something called the state of insufficiency. We never, ever feel done. We never, ever feel complete.”

We have all seen the trance like looks on children’s faces – the tantrums and those videos that have gone viral on social media showing children ‘losing the plot’ and having demonic screaming meltdowns due to the lack or removal of access to Wifi or their computer games.

Technology is here to stay. Be proactive and control it. Don’t fear it. Set boundaries, install parental controls and educate your children on the dangers of technology and appropriate information.

Consider how the online world is affecting the way we use our finances and the important lessons our children are missing out on as we move towards a cashless society.

3 Essential Behaviours for Financial Success

TOO MUCH OF THE MONTH LEFT AT THE END OF YOUR PAY?

Do you tend to overspend?

If so, you are not alone!

Did you know?…

• A staggering 86% of the Australian population don’t know how much money they are spending every month, although 90% think they have a good handle on their spending.

• With the convenience of alternative payment methods (ie tap and go), 63% of Australians have increased their spending in the last five years.

• 91% spend without thinking, and 86% lose track of their spending.

• About 70% of people believe that alternative payment methods make it easier to spend money that they would not spend otherwise.

As living expenses rise, but wage growth remains subdued, Australians increasingly overspend and dip into their savings – if they have any at all! In fact, more than one in five Australians have no cash savings.

Many of us are spending our hard earned salaries without tracking what we are doing with it and not ‘capping’ the different areas of expenditure.

Consequently most of us miss out on channelling that unnecessary spend into something more meaningful:

• a holiday

• extra superannuation payments

• future family commitments

• home renovations/upgrades

• new furniture/car/other

• future investments

Beware the money wasters

Here are some examples of what could happen when we are not paying attention to how we spend our earnings:

• Using ‘easier’ alternative payment methods that result in higher cost outcomes.

• Using credit cards for ‘tap and go’ (when we may not have the cash at hand) instead of debit cards (knowing the money is already in the account). • Overspending at social events such as drinks and meals when out with friends (46% of people admit that they have shouted a round of drinks that was not reciprocated).

• Overspending on special occasions (like birthdays and Christmas). Your budget should include all special occasions for both family and friends, AND stick to your limit!

• Bad online habits – especially teens and tweens who are blowing the family budget. Half of Australian parents of tweens and teens have covered the bills for unapproved online spending for mobile calls or data, in-game purchases, music, video streaming or apps.

Caught up in social media advertising and online shopping remarketing?

Let’s face it – technology makes online shopping easy and accessible. More sophisticated social media marketing is increasingly putting more products and services in front of consumers more often.

So what are the 3 essential behaviours for financial success?

1. DISCIPLINE

Disciplined saving and controlled spending WILL put more money in your pocket.

Consistent habits make a big difference when it comes to wealth building and financial success.

By regularly checking how you spend your money (if only say 30 minutes – once a month) will help maintain focus with where it is going.

There is no better feeling than accomplishing something financially – whether it’s paying off a bad debt (like that credit card), saving for a holiday, getting your super sorted and working for you or simply building up an emergency fund for times when the cost of living is so high.

If nothing else, it will take some of the stress away knowing that you will be able to access the funds that you have set aside when you need to, whatever the need may be.

2. PERSISTENCE

Nothing great ever happens overnight or typically without a constant and persistent approach.

While others may be appearing to be having all the fun, it is usually short lived and ends up as one faded memory running into another.

• Avoid tempting situations – If you’ve spent your budget for the month, avoid the shops (and jumping online) or cut back on your social outings.

• Maintain good money habits – Spend less than you earn and set automatic savings.

Get help – this is where we fit it in!

3. ADAPTABILITY

Inevitably you will encounter bumps and distractions along the way.

In most cases, what you start out to do, and what you end up with, are not always the same. Part of success with anything is to be prepared for a change in advance and be willing to take a few calculated risks along the way.