Personal finances tips:

1. Before you can start to save you should always work out your spending habits and how much money you have left at the end of each month. Click here to help you create a realistic budget that could save you thousands!
2. If starting a budget is too difficult or daunting, start by keeping a diary. Commit to carrying around a notepad in which you record all your purchases. This should include everything from your insurance bills to your morning coffee. Each entry only needs a date, a description and a dollar value. After a month, review your records and this can form the basis of your budget. Once you can see exactly where you are spending all your money, it will be easy for you to identify which purchases you could easily trim off to save a little every month.

Paying off your bills, loans and credit cards:

3. Do a credit card check - Go to www.creditcardfinder.com.au to find out if there are better offers.
4. Avoid late fees and penalties when you forget to pay your bills on time by setting up a direct debit through your bank account.
5. If you make fortnightly mortgage repayments instead of monthly repayments you can make an extra monthly payment each year. With one extra annual payment, you could dramatically reduce the repayment time of your mortgage!
6. Given variable interest rates have fallen considerably in the past year, if you keep paying the higher repayment you’ll wipe years off your loan.
7. Check out an offset account in conjunction with your mortgage repayment and use that account to pay bills instead of your every day savings account which only earns a minimal interest rate. Talk to your mortgage adviser to work out how you can pay additional funds into your mortgage.

Make the most of tax time:

8. Organise all your receipts (in a shoe box) so you can claim your full allowable deductions during tax time.
9. If you have school-age children, keep all your receipts as you may be able to claim the Education Tax Refund.
10. If you add to your super from before-tax money (ie. make a concessional contribution) you could reduce your annual tax bill!

Insurance and superannuation tips:

11. Go to www.iselect.com.au to choose the best health fund for you and your family.
12. Insure your home, not the land. Although your home and its contents are at risk from fire, theft, windstorms and other perils the land your house sits on, is not.
13. Stop smoking today. Besides the cost and it being bad for your health, smoking accidents account for more than 23,000 residential fires every year and you will pay higher premiums on your insurance as well. In addition, some insurers offer reduced premiums if no-one in the home smokes.
14. Life insurance can be cheaper through your super fund.
15. If your total income is less than $60,342, and you make a $1,000 after-tax contribution to super by 30 June this year, the government could give you up to $1,500. This amount will soon reduce to $1,000 after 30 June this year, so it’s worth considering!

Household related savings tips:

16. Sign up to Skype and get free phone and video calls over the internet.
17. Check out www.partykids.com.au for kids party ideas.
18. Find a bulk-billing doctor.
19. For supplements and medicines, check out www.esupplements.com.au
20. Porridge is cheaper and more filling than cereal. It’s also more comforting during winter!
21. Plan meals for the week.
22. Don’t buy lunch at work – take your own. You can save hundreds of dollars doing this.

Gas, electricity and water savings tips:

23. Switch off your hot water and all electrical appliances when on holidays.
24. A fan-forced oven uses less energy than a conventional oven.
25. Just before you go to bed or when you go out, turn off all lights and any power points for unnecessary appliances eg. TV, stereo units.
26. Use energy-saving light bulbs or use a utility broker at www.goswitch.com.au
27. Front-loading washing machines use less energy and water than top-loading automatics.
28. A half-filled dishwasher uses the same amount of energy as a full load, so fill it to capacity before each wash cycle.
29. Fit an AAA-rated low-flow showerhead.
30. Keep a bucket in your bathroom and use it to collect the water while waiting for the shower to warm up. You can then use the water collected to water your garden.
31. Take four-minute showers or less.
32. Fix leaking taps straight away. If you have to wait for a plumber, place a pot plant under it to reduce water wastage.

Transport and auto savings tips:

34. Use supermarket petrol discount coupons.
35. Fill up on Tuesday or early Wednesday.
36. Avoid hard acceleration and braking when driving. Slower speeds give better fuel economy and also save lives!
37. If you regularly use public transport, buy a weekly, monthly or quarterly ticket.

General shopping tips:

38. Write a grocery list before shopping and stick to it.
39. Over-60s, where possible, ask for a seniors discount and call Senior Shopper offers on 1300 366 265 to find the best deals.
40. Buy in bulk from the growers or farmers markets.
41. Buy birthday and Christmas presents early. Mid-season, end of financial year and mid-year clearance sales are now on.

Holidays and travel tips:

42. Camping is the best budget holiday.
43. For $1 a day, you can get a bargain one-way driving holiday at www.drivenow.com.au.
44. Book discounted flights with Jetstar on their Friday Frenzy between 4-8pm. Virgin Blue also have “red-hot” deals.
45. Online booking sites like www.bestflights.com.au and www.lastminute.com.au are perfect for spur-of-the-moment deals.

Entertainment and lifestyle tips:

46. Go to the movies on “cheap Tuesdays”.
47. Cut-back on your alcohol intake. A month of not drinking any alcohol will save money and can also improve your health.
48. You can buy discounted wines and other alcoholic drinks at www.winemakers.com.au, www.graysonline.com.au, www.charitywineservice.com.au or www.winemarket.com.au
49. Shave your head and save hundreds a year on haircutting fees. You can also raise much needed funds for the Leukaemia Foundation by signing up to the World’s Greatest Shave campaign!

A survey by the Royal Automobile Association (based in Adelaide) has conducted recently to look into the most cost effective cars to run on our roads. If you are going to look at purchasing a new car in the coming months, you may want to consider looking at this research.

The survey assumes that the average driving distance is 15,000 kilometres year. It also factored in depreciation, and used costs from the service infustry instead of the car manufacturers. This will no doubt give a more accurate report than some of the other surveys out there.

The survey also takes into account the purchase costs, interest, service costs, insurance, registration, tyres, day to day running costs and depreciation calculated over a 5 year period.

“This approach gives us the full story, because how much you pay to purchase a car is just part of the picture,” said RAA technical manager Mark Borlace.

Mr Borlace said while costs were down overall, most of last year’s survey winners in the various car categories came out on top again this year.

They included the Hyundai i30 as the cheapest small car, the Kia Carnival as the cheapest people mover and the Nissan Patrol as the cheapest large four-wheel-drive.

They surveyed 75 cars and found costs were down about seven per cent over the past year with the downturn leading to ultra-competitive market conditions, lower interest rates and cheaper petrol prices.

The most expensive car was the Mummy mover, the Toyota Landcruiser Diesel at an average of $371.10 per week.

Compared to the cheapest car, Hyundai Getz at $122.18, it makes you wonder whether it’s worthwhile buying that big tanker to transport all the kiddies around in.

Among the locally-made cars, the Ford Falcon XT running on LPG was the best at $221.73 ahead of the Holden Commodore at $227.47 and the Toyota Aurion at $229.02.

PD

Happy New Year! Now that there are new laws and tax rates to apply from this week onwards, I thought I might give you the upper hand on wat the main parts have changed which will more than likely affect you.

The new tax rates means that the 30 per cent income threshold is increased from $34,000 to $35,000 and the 40 per cent tax rate is reduced to 38 per cent.

An individual on $40,000 a year will get an extra $2.88 a week, while someone on $100,000 a year will get an extra $10.58 a week.Don’t go and spend it all at once!

The Family Tax Benefit A has also risen by $5.60 a fortnight for each child 12 and under and by $7.28 a fortnight for teens aged 13-15.

The baby bonus will increase by $185 to $5185, while childcare benefits for one child using full-time care will increase by $6.50 a week to $180, and the maximum childcare rebate will rise by $278 to $7778 per child per annum.

If you were planning on putting larger sums of money in your transition to retirement in the coming years, I wouldn’t hold your breath with a decrease in the super contribution cap being halved - from $50,000 to $25,000 for those under 50 and from $100,000 to $50,000 for those older than 50. After the past few years, and maybe those to come, you will need to top up that super balance before retirement.

A huge bonus for NSW residents is the NSW Government will cut duty by 50 per cent for people buying newly built properties with a value not exceeding $600,000 from July 1. If you tie that into your $2.88 week saving, you may be going places! Unfortunately, the savings you make up on the stamp duty, will be taken back in parking levies for those living in Sydney with levies doubling as of 1 July from about $950 to about $2,000 near the city, and marginally less in the inner West.

VICTORIA

First homebuyers in Victoria are eligible for up to $36,500 in grants. The Victorian Government will provide up to $22,500 for those buying new houses in regional areas and $18,000 for those buying in metropolitan areas. This is in addition to the $14,000 Federal grant.

QUEENSLAND

not much to write home about in Queensland with rates are also set to soar in south-east Queensland. They will jump 8.7 per cent in Redland, 5.4 per cent in Moreton Bay, 6.45 per cent in Brisbane, 7.5 per cent in the Sunshine Coast and 6.9 per cent in Logan. I suppose that will give the NSW counterparts something to finally smile about once the football season is over.

South Australia

In South Australia stamp duty will be eliminated for mortgages and rentals in a move set to cost its State Government $183 million over four years. So, some very positive news there. Interstate Pollies watching the SA government at all???

So, in the end, there are some very positive cuts in tax and increases in general bonuses, which hopefully will give business the kick along it’s been waiting for.

Is there anything the governments can implement that would dramatically benefit yout local area or demographic?

Have a great New Year.

PD

At the moment, everyone is watching their ‘pennies’, and I’ve tried to find as many ‘tips’ as possible for simple money savings for you. Many of these you might already do, but I’d love to know of any tips that you use and work, especially for small business.

Personal finances tips:

1. Before you can start to save you should always work out your spending habits and how much money you have left at the end of each month. Click here to help you create a realistic budget that could save you thousands!
2. If starting a budget is too difficult or daunting, start by keeping a diary. Commit to carrying around a notepad in which you record all your purchases. This should include everything from your insurance bills to your morning coffee. Each entry only needs a date, a description and a dollar value. After a month, review your records and this can form the basis of your budget. Once you can see exactly where you are spending all your money, it will be easy for you to identify which purchases you could easily trim off to save a little every month.

Paying off your bills, loans and credit cards:

3. Do a credit card check - Go to www.infochoice.com.au or www.canstar.com.au to find out if there are better offers.
4. Avoid late fees and penalties when you forget to pay your bills on time by setting up a direct debit through your bank account.
5. If you make fortnightly mortgage repayments instead of monthly repayments you can make an extra monthly payment each year. With one extra annual payment, you could dramatically reduce the repayment time of your mortgage!
6. Given variable interest rates have fallen considerably in the past year, if you keep paying the higher repayment you’ll wipe years off your loan.
7. Check out an offset account in conjunction with your mortgage repayment and use that account to pay bills instead of your every day savings account which only earns a minimal interest rate. Talk to your mortgage adviser to work out how you can pay additional funds into your mortgage.

Make the most of tax time:

8. Organise all your receipts (in a shoe box) so you can claim your full allowable deductions during tax time.
9. If you have school-age children, keep all your receipts as you may be able to claim the Education Tax Refund.
10. If you add to your super from before-tax money (ie. make a concessional contribution) you could reduce your annual tax bill!

Insurance and superannuation tips:

11. Go to www.iselect.com.au to choose the best health fund for you and your family.

12. Email Me to find out how you can save on Life & Income insurance or visit www.protectmywealth.com.au
12. Insure your home, not the land. Although your home and its contents are at risk from fire, theft, windstorms and other perils the land your house sits on, is not.
13. Stop smoking today. Besides the cost and it being bad for your health, smoking accidents account for more than 23,000 residential fires every year and you will pay higher premiums on your insurance as well. In addition, some insurers offer reduced premiums if no-one in the home smokes.
14. Life insurance can be cheaper through your super fund.
15. If your total income is less than $60,342, and you make a $1,000 after-tax contribution to super by 30 June this year, the government could give you up to $1,500. This amount will soon reduce to $1,000 after 30 June this year, so it’s worth considering!

Household related savings tips:

16. Sign up to Skype and get free phone and video calls over the internet.
17. Check out www.partykids.com.au for kids party ideas.
18. Find a bulk-billing doctor.
19. Check out the Chemist Warehouse at www.chemistwarehouse.com.au.
20. Porridge is cheaper and more filling than cereal. It’s also more comforting during winter!
21. Plan meals for the week.
22. Don’t buy lunch at work – take your own. You can save hundreds of dollars doing this.

Gas, electricity and water savings tips:

23. Switch off your hot water and all electrical appliances when on holidays.
24. A fan-forced oven uses less energy than a conventional oven.
25. Just before you go to bed or when you go out, turn off all lights and any power points for unnecessary appliances eg. TV, stereo units.
26. Use energy-saving light bulbs.
27. Front-loading washing machines use less energy and water than top-loading automatics.
28. A half-filled dishwasher uses the same amount of energy as a full load, so fill it to capacity before each wash cycle.
29. Fit an AAA-rated low-flow showerhead.
30. Keep a bucket in your bathroom and use it to collect the water while waiting for the shower to warm up. You can then use the water collected to water your garden.
31. Take four-minute showers or less.
32. Fix leaking taps straight away. If you have to wait for a plumber, place a pot plant under it to reduce water wastage.

Transport and auto savings tips:

34. Use supermarket petrol discount coupons.
35. Fill up on Tuesday or early Wednesday.
36. Avoid hard acceleration and braking when driving. Slower speeds give better fuel economy and also save lives!
37. If you regularly use public transport, buy a weekly, monthly or quarterly ticket.

General shopping tips:

38. Write a grocery list before shopping and stick to it.
39. Over-60s, where possible, ask for a seniors discount and call Senior Shopper offers on 1300 366 265 to find the best deals.
40. Buy in bulk from the growers or farmers markets.
41. Buy birthday and Christmas presents early. Mid-season, end of financial year and mid-year clearance sales are now on.

Holidays and travel tips:

42. Camping is the best budget holiday.
43. For $1 a day, you can get a bargain one-way driving holiday at www.standbycars.com.au.
44. Book discounted flights with Jetstar on their Friday Frenzy between 4-8pm. Virgin Blue also have “red-hot” deals.
45. Online booking sites like www.wotif.com.au and www.lastminute.com.au are perfect for spur-of-the-moment deals.

Entertainment and lifestyle tips:

46. Go to the movies on “cheap Tuesdays”.
47. Cut-back on your alcohol intake. A month of not drinking any alcohol will save money and can also improve your health.
48. You can buy discounted wines and other alcoholic drinks at www.langtons.com.au, Wine Makers or Wine Makers Choice
49. Shave your head and save hundreds a year on haircutting fees. You can also raise much needed funds for the Leukaemia Foundation by signing up to the World’s Greatest Shave campaign! Or find a bald man with a combover and convince him to come out of the caveman years!

I would like to add number 50, but I thought I would leave that up to the readers, so if you have a money saving tip, let me know in the comments bar below and I’ll put the best one in the list.

Paul

With an ageing population, more people are starting to look seriously at the prospect of how much they will actually need once they ‘retire’. There are many areas to take into account when considering retirement. Like, which fluffy shoes to buy for your mid morning stroll to the front lawn to pick up your newspaper, looking for the next holiday destination in your new motor home.

My guest writer for this topic is Sean Prosser , from Lighthouse Financial Advisers based in Sydney. Sean is an experienced financial planner and specialises in retirement planning and wealth creation.

The question about how much you need to live on in retirement is an old chestnut, where “old” is probably the operative word. Studies in the US show that life expectancy could reach 100 years of age by 2030. If that is the case  if someone were to retire at age 65, that means 35 years in retirement.
So it’s not just a question of having enough income each year in retirement, but also one of whether you will outlive your retirement savings.
The Association of Superannuation Funds of Australia, together with Westpac, found that to have a comfortable lifestyle, retired singles who live in their own home need to spend $36,607 a year and couples $48,648.

Recent life expectancy figures issued by the Australian Government Actuary estimate that a 55-year-old woman has a 35 per cent change of reaching 95 years and a man of the same age has a 19 per cent chance. But 71 per cent of 55 year old women will live till they are 85 and 58 per cent of men.

On average a 55 year old woman has a life expectancy of 89.7 years and a 55 year old man 86.2 years. So that’s quite a number of years that people will be spending in retirement.

Compulsory superannuation at nine percent a year will not get you that sort of money, so you will need to make additional contributions along the way.

So while it makes sense to get as much of your retirement savings into super so you can enjoy the tax-free environment, you will need to adopt a steady-as-she-goes strategy to achieve this end.
What that means is you should be looking at making additional super contributions from your 30s onwards rather than leaving it until the last moment.

Aside from the tax-free status of money drawn down from super after you are 60, there are plenty of other incentives to encourage you to make additional contributions, such as the tax concessions available during the accumulation phase of super.

The most accurate way of assessing your retirement needs is to work out a realistic budget. However, if that’s a daunting prospect, a good rule of thumb is approximately 60%-70% of your pre-retirement income.

So how much do you need in dollar terms per annum?

Click for larger image

Once you have determined your required annual income, you then need to establish exactly how big your retirement nest egg needs to be to provide that level of income for life.
The table below shows the savings you will need at retirement for some income levels, assuming retirement at age 65 years and that the income will be paid for an average life expectancy.
Click for larger image

This is general information and everyone’s needs and requirements are very different.
So if you are at all concerned with your retirement plans, talking with a qualified financial planner may be a good idea, it’s never too late to start planning.

To ensure you are on the right track to retirement, and having enough funds to get you there, Sean has offered an hour of his service at no cost to readers of this blog. This offer is only available to 50 readers, so you need to be quick. Sean can be contacted by EMAIL or visit his website at www.lighthouseonline.com.au

Children are never too young to learn effective money habits. Habits acquired early in life tend to be the habits that are retained for life. Guidance in appropriate money management helps to teach children about the positive and negative meanings of money and what thoughts and feelings go into making money decisions. As in all parenting decisions, a consistent approach to encouraging good money habits is essential.

As a family:

• Be open to discussion about money issues
• Include children in discussions about family values and attitudes to money
• Decide on the type of guidance and advice you will give, bearing in mind that every child’s personality and learning style differs
• Set limits and consequences for spending
• Allow children to make their own decisions and learn from their mistakes
• Decide how your children will receive money: pocket money; allowances; one-off gifts (birthdays etc.)
• Consider the developmental stage (as opposed to chronological age) of your child when deciding on how much pocket money to provide and the criteria for increasing the amount
• Be clear about household chores you expect children to do that will incur no payment
• Teach by example

Teaching money concepts

Earning:

• Teaches children reward for effort
• Gives a child a measure of financial independence
• Has the potential to build particular skills
• Provides recognition, acknowledgement and a sense of freedom
• Demonstrates expectations and work standards

Spending:

• Teaches children how to keep account of earnings vs spending
• Provides opportunities to select and compare (quality, quantity, price)
• Helps clarify difference between wants and needs
• Encourages children to take responsibility for their own decisions

Saving:

• Is a means of children acquiring what they want or need
• Helps to establish a regular pattern of putting money aside either for planned purchases or for emergencies
• Teaches the concept of delayed gratification
• Helps children look at the bigger financial picture of working towards a goal rather than frittering away their regular income

Borrowing:

• Teaches children that whatever is borrowed must be paid back
• Provides opportunities for children to learn about the costs of borrowing (interest, lay-by, the concept of credit and contracts)
• Provides the opportunity for children to make value judgements about whether to borrow or save for special purchases

Sharing:

• Encourages notions of giving and helping others
• Is an experience in doing something for no financial reward or public recognition
• Illustrates that the contribution of time, skills and energy can be as important as any financial gift

Suggested activities:

• If possible, take your child to your workplace so that they can see how and where you earn money to pay for things like food, petrol, clothes etc.
• Whenever you visit doctors, dentists or other professionals, take the opportunity to explain about fee for service and financial planning for emergencies.
• Set regular, unpaid chores so children are part of a functioning household routine.
• Encourage children to keep their savings in a glass jar (rather than a closed box) so that they can watch their money grow.
• Provide opportunities for children to handle real money - talk about the different coins, sizes, colours and values.
• Help them to set up shop with play money, a toy cash register, account books etc.
• Wherever possible, let children insert money and collect change (public transport, admission tickets, tokens).
• Next time you rent a video, encourage your child to take responsibility for its rental and return.
• Ask at your local library for appropriate story books that feature themes on earning, spending, borrowing, saving etc.
• Ask your financial institution if they distribute any publications appropriate for children
• ‘Monopoly’ is a great board game for the whole family. Encourage younger children, who may not understand the rules, to help be banker and count out money.
• Encourage a realistic approach to spending by taking children window shopping to compare price, value, quality.
• When bills arrive, explain to children that things like water and heating cost money.
• Explain about receipts, how a credit card works, and the need to keep records.
• Help your child set up an account with a financial institution. Children learn from observation and example: the most effective teaching is adult role modelling and the practise of good money habits on the homefront.