Australian’s Household Debt Ranks #4 In The World. When Will We Listen?

You’d probably think the consumer country, United States would rank above Australia, but they are almost half of our debt per household.

Australians have a debt problem and they’re not listening. High household debt is worrying at its best. It’s like a big semi-trailer screaming down the highway. If something bad happens in front of it, the driver has an extremely difficult time trying to stop, or even manoeuvre.

You’re probably saying it’s ok because our interest rates are low. What happens when they go up a quarter of a percent or half a percent, let alone when they creep up 1%? It’ll hurt.

The cost of ‘necessities’ like power, insurance, transport and health creep up every year. The fastest real household spending growth (2016/17) has been in Communications (phone, internet etc) at a rate of 6.6%, Medicine and Medical Aids at 4.9%, Household Appliances (because we are a Nation of consumers) at 4.9%, and Transport Services at 4.8%. Have your wages crept up at those rates?

Something has to give when household expenses are increasing each year, and household incomes are not. It’s usually the household savings that suffer.

So, you are in a better position than most if you actually have savings when things change. What if you don’t?

Then your debt increases. You borrow against your home, or you chase around for another credit card and start that evil route of spending money you don’t have.

I don’t want to get all technical and confuse you with WPI and GDP numbers as most of you will switch off so I’m keeping it simple.

It’s ok to have debt if it’s manageable within your means, but just be wary that low interest and a fairly good economy does have cycles and can change for the worst.

You need to keep a close eye on your finances, not just in your head, or a bank’s phone APP on your account’s activity this month. No, you really need to sit down and create a budget.

The secret is to have a plan, some guidance, direction, a helping hand. When it comes to saving, or not spending, it’s easy enough to put a plan in place, but whatever tool you use must break it down for you.

To take control of your money you need to understand the flow of it: Money comes in from . . . and Money goes out to . . .

Your budgeting tool needs to show you what your finances currently look like, what simple options are available to budget, and then how you can easily save money from that budget.

Everyone talks about a “Budget Plan”. I personally call it “Your Spending Plan” because that is what we are trying to control here – your spending

By creating a Spending Plan you can learn:

• ·       What your expenses are to the dollar
• ·       Know exactly what you have to spend
• ·       How to use your credit card wisely
• ·       And be able to take charge of your money and build financial security.

If you understand how your money flows, and you can learn that, you will see exactly what you are spending, what your expenses are, and how small changes can save you big money.

If you’re still reading this, you obviously know that you need something to help you manage your spending. I’m not saying to stop spending. You just need to be able to manage your money better.

Your Wealth Vault has created a course format budget which guides you step-by-step to create Your Spending Plan giving you the knowledge and capability to have optimum control over your money.

Spending, which you’ll still do, will take on a whole new light. You’ll be able to do it without the guilt and remorse you currently face.

The course, and creating and managing Your Spending Plan each month, will set you back the cost of 3 cups of coffee each month, but what you will save on your expenses should far outweigh that cost.

If you have ANY concerns about your finances and your spending, you need to visit Your Spending Plan.

#1 Way to Stop Overspending and Get Your Budget Under Control

You start every month with really good intentions, or maybe you wait for your new years resolution to roll around to “save more money this year.” Just like the diet, you soon succumb to “oh just this once” and then you get buyers remorse at the end of the month when all of your bills come in.

The signs of being a spending culprit should be fairly self-evident so I won’t go into detail other than to list them:

·       Your budget doesn’t add up – if you even have one. You’re spending more than you make.

·       Your credit cards are always at their limit.

·       You can, or do, only pay the minimum payment. This can get you into so much trouble financially.

·       You splurge on buying stuff, or on entertainment, and neglect your bills.

·       If your income rises, so do your expenses.

·       There’s more in your wardrobe than in your bank account.

·       You can’t make a start to make a change.

You may think you can’t change, but you can as long as you firstly realise there is a problem. It’s kind of like being a gambler, smoker, or alcoholic – you want to quit but it’s too hard to know how, or where to start, let alone stick to it.

The secret is to have a plan, some guidance, direction, a helping hand. When it comes to saving, or not spending, it’s easy enough to put a plan in place, but whatever tool you use must break it down for you.

To take control of your money you need to understand the flow of it: Money comes in from . . . and Money goes out to . . .

Your budgeting tool needs to show you what your finances currently look like, what simple options are available to budget, and then how you can easily save money from that budget.

Everyone talks about a “Budget Plan”. I personally call it “Your Spending Plan” because that is what we are trying to control here – your spending.

By creating a Spending Plan you can learn:

·       what your expenses are to the dollar

·       know exactly what you have to spend

·       how to use your credit card wisely

·       and be able to take charge of your money and build financial security.

If you understand how your money flows, and you can learn that, you will see exactly what you are spending, what your expenses are, and how small changes can save you big money.

If you’re still reading this, you obviously know that you need something to help you manage your spending. I’m not saying to stop spending. You just need to be able to manage your money better.

Your Spending Plan is a step-by-step budgeting tool which gives you the knowledge and capability to have optimum control over your money. 

Spending, which you’ll still do, will take on a whole new light. You’ll be able to do it without the guilt and remorse you currently face.

The course, and creating and managing Your Spending Plan each month, will set you back the cost of 3 cups of coffee each month, but what you will save on your expenses should far outweigh that cost.

If you have ANY concerns about your finances and your spending, you need to visit Your SpendingPlan.

3 Quick Ways To Cut Your Credit Card Debt

I’m sure you are all aware of the number one way to reduce credit card debt: Pay it in full whenever you get your statement. And the second piece of common advice about managing credit card debt: Don’t use it. Easier said than done sometimes.

Even the most organised amongst us may feel like we’re spinning our wheels sometimes when it comes to credit card debt, and the situation isn’t helped by the fees and interest rates often charged by credit card companies

With around $32 billion owing in Australia, that's an average of around $4,300 per card holder. The level of credit card debt can go up or down depending on what the trend is on a monthly basis but the average card holder is paying around $700 in interest per year if their interest rate is between 15 to 20%. And as we know most of the card interest rates are more than that.

Somehow, it feels a lot easier to get into debt than dig yourself out of it. But here’s the thing—have you actually asked your credit card issuer to see if they’re willing to change the terms of your credit card so that it tilts a little more favourably in your direction?

Odds are, if you’re like a lot of people, you haven’t even tried. We constantly receive offers for new credit cards by mail and email, and the more in debt you are the more offers you will get. Banks are falling all over each other to get new customers and keep the ones they have. So if you have an outstanding balance, maybe you should try negotiating more favourable terms for paying it off. Yep, really.

So here are 3 Top Tips for getting your credit card balance paid off quicker.

1. Will You Waive My Late Fee?

Sometimes we just forget to do things. With all the best intentions in the world and even a diarized note, you still forget. When you forget your due by date on your credit card payment there is no forgiveness, you get slogged bad.

But card issuers may actually be more merciful than you think. A growing number of banks will waive the first late fee if you ask.

Having a pristine record of paying on time and a legitimate excuse for dropping the ball (for example, an illness or family emergency) may also increase your chances of getting the fee forgiven. Just don’t make a habit of calling and asking for forgiveness, you will be on record and your credibility and the bank’s kind attitude could dry up fast.

2. Can You Lower My APR?

Ask for a lower annual percentage rate (APR), but do your homework first. Keep a file of all the offers that come through the mail box, and an email folder of the offers that come through digitally from other credit card providers. When it’s time to ask for a lower rate, have your facts and figures of current comparisons on hand and use them as a baseline for your conversation. “XYZ credit card offered XX% and my rate is X+Y%. Can you match that?” Be nice and polite, but be direct and assertive as to what you want.

Typically a bank may offer to knock off 2 or 3 percentage points, but it’s okay to ask for a little more than that. You have every right to make these requests, just as long as you are nice and polite.

If you carry $5,000 of credit card debt at 18% interest that you pay down at the rate of $100 a month, it’ll take you almost eight years to pay off that card. But if your interest rate is 15%, it’ll take you about six and a half years. While you’re at it you might want to work out how much you’d have to pay each month to pay off your balance in five years… or less! It’ll be worth it in the long run.

3. Can I Change My Payment Due Date?

If you find you’re more likely to pay your balance off in full at a certain time of the month rather than when the credit card company expects you to, consider asking your provider to change your due date to a day that’s more convenient for you. That’s not an unreasonable request.

Everyone has different ebbs and flows with their money and when different bills and payments are due. The date you get paid influences when you have money available for payments. If you get paid once a month on the first of the month, it’s probably a lot easier to have your payment due earlier in the month rather than later, after you’ve spent your money on other things. A lot of times a bank might work with you to change your payment due date; it’s all about making payments on time every time.

Just be aware that if you carry a balance and you’re pushing your due date out, from the 1st to the 15th, you’ll be paying finance charges on those extra days that your balance would be accruing interest during your first changed billing cycle.

So you can see there are a few genuine ways that you could realistically reduce your credit card debt. If you’re still having a problem, find another credit card provider and transfer the balance – they’re always offering that.

Taking control of your credit cards is just another step in the process of controlling your overall financial situation. 

Take the Free Your Money Personality Quiz to find out your emotional attachment to money and how to overcome and manage it.

Your Money Sense is an online financial education program where you’ll learn how to take control of your money, step-by-step, identifying where you can save and where you can spend without blowing the budget.

Our proprietary budgeting tool, Your Spending Plan, guides you on how to budget, and you’ll easily learn everything you need to know to manage your money to make confident decisions.

2 Things That Will Probably Expand This Christmas

The countdown to Christmas is on. Such a lead up of parties, families and gift-giving.

And then it’s over!

New Year rolls around and a couple of things aren’t quite how you left them.

Firstly, your waistline is a couple of inches larger, and secondly your credit card debt is considerably larger too.

So how do you start 2018 in better shape – both physically and financially?

Let’s start with your expanding waistline.

One of the best ways to quickly drop a couple of sizes whilst retaining all the nutrients you need is to ‘Juice’. Yes, just put a bunch of Fruit & Vegetables through a juicer: All the F&V that you like and a few more beneficial varieties that you don’t normally eat. It all literally blends together with the dominant flavour rising anyway. And generally, it all turns brown. Sounds nice huh?

Sure, it takes some time to cut all the F&V, and even more time to wash the juicer, but you’ve usually got enough for more than one meal.

Oh, and don’t forget to exercise. It gets your juices flowing, literally. Your blood is pumping sending lots of oxygen to the dark recesses of your body, and it makes you feel better, more energy, and you’ll sleep well. The weight should drop off too.

Nothing that’s good for you is ever easy. A little effort at the start with a lot of reward to follow.

So now what do you do about the expanding credit card statement?

Just like your expanding waistline, action needs to be taken.

With around $32 billion owing in Australian credit card debt, that's an average of around $4,300 per credit card holder and you are one of them caught in that circle of “buy now, worry about paying later”.

So, you have a few options to alleviate your debt, explained in detail in our article 3 Quick Ways to Reduce your Credit Card Debt

Ask your credit card issuer to see if they’re willing to change the terms of your credit card so that it tilts a little more favourably in your direction? You’d be surprised what they can and will do to help.

Here are the 3 tips in summary:

• ·    Ask your credit card provider to waive late fees for a month.
• ·    Ask them to lower the Annual Percentage Rate (APR).
• ·    Change your Payment Due date.

There are a few genuine ways that you could realistically reduce your credit card debt. If you’re still having a problem, find another credit card provider and transfer the balance – they’re always offering that.

Taking control of your credit cards is just another step in the process of controlling your overall financial situation.

Of course, the best way to avoid the post-Christmas bill-shock is to plan, or budget, in the lead up to the gift-giving, party-attending, family-celebrating season.

Who likes budgeting?

Who knows how to budget?

Who knows where they can save money easily?

I know, I know, the answer is probably 3 out of 3 No’s.

Here is a really good budgeting tool that takes you beyond plugging in numbers and trying to figure out what it all means. You create a Spending Plan so you know what you are spending to the cent, and where you can save money. The budgeting tool is in the form of a course, which guides you step-by-step where to find and how to input all of your money which flows in and flows out. That’s called cash-flow.

Your Spending Plan has a great bill-saving calculator that can show you where you can save money by making slight changes, and how that impacts your overall cash-flow by the week, month or year.

Don’t suffer from credit card shock again, get organised and set up Your Spending Plan now.

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If you are interested in some Holiday reading, here’s a great Free e-book from Your Money Sense: 6-steps to Financial Security It’s a good starting point to get you in the right mindset to manage your money.

What Does Your Spending Plan Look Like?

Whether you are starting your financial journey out of Uni, getting your first job, climbing the career ladder, jumping into, or out of a relationship, buying property, or even starting a business, you need to take control of your financial future.

There are a heap of ‘manage your money’ APPs and Software Platforms out there now.

They are a fantastic start for anyone that doesn’t have control over their money. They scrape your bank accounts and show you what you are spending and categorise that spending (however without too much detail), so you roughly know what you are spending your money on. Better to know than not to know.

These Apps aren’t really going to let you get ahead, or save, they just help you to not overspend.

Now if you are really serious about getting on top of your money, you need to be preparing a budget of your cash-flow – where your money comes in from and where it goes out to.

But no-one wants to create a budget. That’s way too hard. Unless . . .

Your Spending Plan from Your Money Sense is a budget planning tool, stepping further into managing your spending categories than the account scraping APPs, in order to save you real money, and put more in your pocket, and even get you saving for those bigger purchases or life-event needs.

It’s a step-by-step module course showing you how to gather, categorise and act on your expenses and make real savings.

Your Spending Plan is not an automated scraping tool, like the multitude of APPs out there, as the information needs to be accurate and detailed. I won’t sugar-coat it, there is manual entry required to get it started so you will need to gather your bills and expenses together. One of the great things about the Your Money Sense course is that it guides you through each step so you know what to do and have plenty of time to do it.

Once your money flow is categorised you can model your expenses to see what a slight adjustment can do to affect your savings in the short, mid or long term.

Best created on a desktop, the proprietary smart dashboard shows you what your ideal target expenses should be and once you have made some realistic changes, what your expenses target looks like.

Your Spending Plan is a living breathing document that you can, and will want to, adjust every month, if not more regularly.

If you really want to get on top of your money – control it rather than letting it control you – then you should use Your Spending Plan. It should end up saving you considerably more than the $14.99 it costs to use each month.

LEARN MORE

3 Quick Ways to Reduce your Credit Card Debt NOW

I’m sure you are all aware of the number one way to reduce credit card debt: Pay it in full whenever you get your statement. And the second piece of common advice about managing credit card debt: Don’t use it. Easier said than done sometimes.

Even the most organised amongst us may feel like we’re spinning our wheels sometimes when it comes to credit card debt, and the situation isn’t helped by the fees and interest rates often charged by credit card companies

With around $32 billion owing in Australia, that’s an average of around $4,300 per card holder. The level of credit card debt can go up or down depending on what the trend is on a monthly basis but the average card holder is paying around $700 in interest per year if their interest rate is between 15 to 20%. And as we know most of the card interest rates are more than that.

Somehow, it feels a lot easier to get into debt than dig yourself out of it. But here’s the thing—have you actually asked your credit card issuer to see if they’re willing to change the terms of your credit card so that it tilts a little more favourably in your direction?

Odds are, if you’re like a lot of people, you haven’t even tried. We constantly receive offers for new credit cards by mail and email, and the more in debt you are the more offers you will get. Banks are falling all over each other to get new customers and keep the ones they have. So if you have an outstanding balance, maybe you should try negotiating more favourable terms for paying it off. Yep, really.

So here are 3 Top Tips for getting your credit card balance paid off quicker.

One: Will You Waive My Late Fee?

Sometimes we just forget to do things. With all the best intentions in the world and even a diarized note, you still forget. When you forget your due by date on your credit card payment there is no forgiveness, you get slogged bad.

But card issuers may actually be more merciful than you think. A growing number of banks will waive the first late fee if you ask.

Having a pristine record of paying on time and a legitimate excuse for dropping the ball (for example, an illness or family emergency) may also increase your chances of getting the fee forgiven. Just don’t make a habit of calling and asking for forgiveness, you will be on record and your credibility and the bank’s kind attitude could dry up fast.

Two: Can You Lower My APR?

Ask for a lower annual percentage rate (APR), but do your homework first. Keep a file of all the offers that come through the mail box, and an email folder of the offers that come through digitally from other credit card providers. When it’s time to ask for a lower rate, have your facts and figures of current comparisons on hand and use them as a baseline for your conversation. “XYZ credit card offered XX% and my rate is X+Y%. Can you match that?” Be nice and polite, but be direct and assertive as to what you want.

Typically a bank may offer to knock off 2 or 3 percentage points, but it’s okay to ask for a little more than that. You have every right to make these requests, just as long as you are nice and polite.

If you carry $5,000 of credit card debt at 18% interest that you pay down at the rate of $100 a month, it’ll take you almost eight years to pay off that card. But if your interest rate is 15%, it’ll take you about six and a half years. While you’re at it you might want to work out how much you’d have to pay each month to pay off your balance in five years… or less! It’ll be worth it in the long run.

Three: Can I Change My Payment Due Date?

If you find you’re more likely to pay your balance off in full at a certain time of the month rather than when the credit card company expects you to, consider asking your provider to change your due date to a day that’s more convenient for you. That’s not an unreasonable request.

Everyone has different ebbs and flows with their money and when different bills and payments are due. The date you get paid influences when you have money available for payments. If you get paid once a month on the first of the month, it’s probably a lot easier to have your payment due earlier in the month rather than later, after you’ve spent your money on other things. A lot of times a bank might work with you to change your payment due date; it’s all about making payments on time every time.

Just be aware that if you carry a balance and you’re pushing your due date out, from the 1st to the 15th, you’ll be paying finance charges on those extra days that your balance would be accruing interest during your first changed billing cycle.

So you can see there are a few genuine ways that you could realistically reduce your credit card debt. If you’re still having a problem, find another credit card provider and transfer the balance – they’re always offering that.

Taking control of your credit cards is just another step in the process of controlling your overall financial situation. 

Take the Free Your Money Personality Quiz to find out your emotional attachment to money and how to overcome and manage it.

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Your Money Sense is an online financial education program where you’ll learn how to take control of your money, step-by-step, identifying where you can save and where you can spend without blowing the budget.

Our proprietary budgeting tool guides you on how to budget, and you’ll easily learn everything you need to know to manage your money to make confident decisions.

Financial Security? All You Need Is 4 Buckets

If you want to build or maintain a healthy financial life, budgeting should be your fundamental starting point. After all, how can you tell you’re on track if you don’t know where your hard-earned pay-cheque is going?

Some of us, correction: most of us, will find it daunting to maintain a budget. Getting all your expenses together, tracking what should be paid and when, how much you have left for entertainment, saving for long-term goals – it’s enough to make you give up before you start. But what if there was an easier way to manage your cash-flow that didn’t require hours of sifting through receipts or crunching numbers?

There is and it’s not that hard to get started. It starts with categorising your monthly spending into four buckets:

BUCKET ONE Fixed costs. These are bills that don’t fluctuate much and remain pretty constant each week or month, or whatever period they are relevant to: things like rent or mortgage, a phone bill or your car payment. It also includes essential costs that may vary slightly from month to month, like utility bills such as electricity or water. Although they may vary slightly, you can work out an average for the purpose of this budget. But generally speaking, if you can predict how much an expense will be, it belongs in this category.

BUCKET TWO Financial goals.These include any sort of savings or debt goal you’re trying to work towards every month, whether that’s paying off credit card balances, paying down your student loans, saving for a home or paying into an emergency fund regularly, or topping up your Super on a regular basis.

~ Take the FREE Money Personality Quiz to determine your emotional attachment to money ~

BUCKET THREE Non-monthly expenses.Got a bill that you have to pay at some point every year, but just not every month? This could include your home or car insurance or for that matter, most annual insurances, car registration fees, annual health payments, and even school tuition belongs in this category. Add up what those types of costs total to each year, then divide that total by 12. That should be what you’re setting aside each month to cover those expenses when they come up.

BUCKET FOUR Flexible spending.This category covers all those everyday costs that fluctuate each month. This can include groceries, restaurants, shopping, movies, petrol and pretty much any expense that may vary month to month.

So now that you’ve categorized your costs, how much can you actually flexibly spend each month without blowing your budget? Well, that’s a relatively easy calculation. What is your monthly take-home pay? From that, subtract your total fixed costs, and your financial goal contributions, and those non-monthly expenses you calculated. The amount that’s left over is what’s available to cover your flexible spending – the daily coffees, new shoes, magazines, etc.

If you want to know what your flexible spending is per week just divide your monthly figure by 4.3, and you’ll have your weekly spending number to stick to. So if you work out the above, and stick to it, you won’t be in danger of spending more than you earn.

If you can put your hands on the numbers from your bills, it’s not that hard to work out. And if you can work to a budget each week or month, you’ll certainly be on your way to building a financially secure future. 

If you want some more great advice about securing your financial future start by finding out your emotional attachment to money and how to overcome and manage it by taking the Free Your Money Personality Quiz.

When is Too Early to Start Christmas Shopping?

Are you ready to start Christmas shopping yet? Is it too early? Are you emotionally ready yet? Can you imagine buying whatever you want: An iWatch, or even a new iPhone, that handbag you keep eyeing off as you walk past the store, a new jacket, or the latest sports shoes. Put it on your credit card, or split it over two credit cards, then it won’t seem as bad when you look at the statement.

We’ve all done it and it feels good. Coming home with bags of goodies, trying them on in secret, then when quizzed weeks later “When did you get that?” you retort “This old thing”.

Haha, they’ll never know. Surely you’ve heard the old saying that “You live up to your income”, as your pay-cheque or income rises, so does your lifestyle. There’s nothing wrong with living well.

But, and there is always a But… that one-off spending spree is very rarely a “one-off”. It is addictive and gets the pleasure endorphins pumping. “Why not do it again, next week, it was fun and there’s still credit available on the card” And on top of all that the airlines are giving you reward points! Why wouldn’t you use your card?

Did you know that Australians owe approximately $33 billion in credit card debt. Here’s an easier number: Thirty-Three Billion Dollars. Personal debt per credit card holder is $4301.00 with an average of $723.45 in interest per annum. Yikes!

For many of us refusing to use a credit card is simply not an option. Without one it’s difficult to pay bills and even make reccurring payments. So use it for that and not for shopping. What should you use for shopping and spending I hear you murmur sarcastically, Use a debit card. You can’t spend more than you have in the bank that way. You’ll find you will spend less and when you next look at your bank statement you’ll even question what you are buying and maybe start to budget.

While you’re at it, have a look at your monthly credit card statement. It shows how long it will take you to pay off your balance and how much interest you’ll pay if you only pay the minimum each month. (The short answers are “forever” and “heaps.”)

So overspending once in awhile is good for you; hopefully it shows you how addictive it can be and gets you to review the financial consequences of that binge. Although a “once-off” may not impact you that much now, think about those endorphins that are working to create a monster, and there’s nothing more destructive than a spending monster. What about all that money you are spending on short term pleasure, and could be using toward the car, or house, renovation, holiday: the big ticket items that need saving for. Shame as those would be long term memories, not just a day of short term pleasure, even if it is in the name of Christmas.

What can you do to resist the “spending-money-I-just-don’t-have” urge?

Firstly use your debit card more than your credit card. Secondly put a simple budget in place, and then you’ll know what you have to spend, and what you don’t. We like to call a budget ‘Your Spending Plan’ as that is what we are all working around: Spending.

Here’s a helpful downloadable guide to control your spending and build your savings. 6-steps to Financial Security, a Free e-book from Your Money Sense. It’s a good starting point to get you in the right mindset to manage your money.

So next time you go for a bender at the shopping centre, take a few deep breaths before walking in, and think about the long term financial goal.

Are Your Financial Habits Normal?

Each day you get up and shower, get dressed, have breakfast, feed the pets and go to work: or something like that. That’s normal for you but it doesn’t mean it’s normal for the next person.

Did you know that when it comes to your money, there is a normal too? Your money normal encompasses your ability to pay your bills, educate your kids, buy a home or retire in comfort and security. That will change for everyone.

So how do you define your money-normal, as it can impact your life in huge ways?

Some people believe that you save regularly and stay out of debt. Others believe that the future is unknowable, so why worry about it. We ultimately define our actions based on our habits and what we believe is appropriate or in our best interest.

Meet Chandler who is a frugal spender, a good saver and even manages to invest here and there. He is happy with that lifestyle and always manages to have money available to do what he wants to do, when he wants to do it. He is organized, disciplined, a planner and a saver.

On the flip side Joey likes to spend as required, he likes to do and have what he wants and needs without consideration of next months finances, and as a result lives from day to day, not interested in, or maybe not knowledgeable of what he requires to save for the future. He thinks it will be there when it’s needed; somehow. (Of course there are many variations of those two examples.)

Both of these fictional people believe that their approach is normal. And it is because they live it. But the consequences can be very different. It’s not a matter of who is wrong or right – it’s simply, their normal.

You need to understand your normal, does it bring you closer to your happiness, satisfaction, comfort and a secure financial future?  If so, keep it going. If not, perhaps it’s time for a new normal…

A good start to being money-normal is to get a plan in place. Start by downloading our Free Your Money Sense e-Book: “6-steps to Financial Security”.

What is your “normal”?

8 Really Important Things To Know When Starting Out

Whether you are starting your financial journey out of Uni, getting your first job, climbing the career ladder, jumping into a relationship, buying property or starting a business, you need to take control of your financial future. Here are 8 really important things to know when you are starting out.

One: Live without a credit card

Did you know that Australians owe approximately $32,673,480,146 in credit card debt as of this morning. Here’s an easier number: Thirty-Three Billion Dollars. Personal debt per credit card holder is $4301.00 with an average of $723.45 in interest per annum. Yikes!

For many of us refusing to use a credit card is simply not an option. Without one it’s difficult to pay bills and even make reoccurring payments. So use it for that and not for shopping. What should you use for shopping and spending I hear you murmur sarcastically? Use a debit card. You can’t spend more than you have in the bank that way. You’ll find you will spend less and when you next look at your bank statement you’ll even question what you are buying and maybe start to budget.

Two: You don’t have to keep up with the Joneses

Keeping up with your peers is dangerous. Just because they have the latest model of car or go on the holiday that you’ve always wanted to, doesn’t mean you should too. You don’t know what their situation is: they may have inherited some money, or they may be so far in debt that you don’t want to follow. You are you, they are they, don’t get confused with that. Live within your own financial means not your peers.

Three: Choose your partner very carefully

Business or personal partner, this is relevant to both. Don’t be impressed by a showy display of money or wealth, it may just be a façade and have a bucket load of debt supporting it. Be careful and be aware. When a business starts making money it’s very tempting, particularly if it is a new concept to your partner. There are so many horror stories of partners who get all consumed by newfound wealth and blow it all. Money can bring out greed in a person… very easily. Keep your finger on the pulse.

Four: Start Saving

More than 40% of a recent survey said they were able to meet their normal monthly expenses, but a third admitted they were worried about their ability to do so. The report said that the results clearly showed there are a large number of people who struggle to cope financially, and the problems are not always linked to the size of their pay-cheque. In many instances people are living in the hope that they will achieve their goals rather than planning for a fulfilling and secure future.

57% of those surveyed had no regular savings plan, and peaked among 45 to 54 year olds, who are often nearing the peak of their earnings capacity. Close to 40% of people would be unable to maintain their current lifestyle if they lost their income for three to six months, thanks to not enough savings.

So how do you counter that? Put a simple budget in place, as you never know when your financial situation can and will change. We like to call it Your Spending Plan as that is what we are all working around: Spending.

Five: Develop a budget

Don’t spend more than you earn. It’s hard to keep track of spending if you don’t have a budget. Putting a simple budget in place lets you know what you have to spend, and what you don’t. We like to call a budget a Spending Plan as that is what we are all working around: Spending.

Six: Get yourself health insurance

Without health insurance, you may not be able to afford expensive medical services when you need them but there are many more reasons why you need health insurance: Shorter waiting periods for elective surgery, choice of doctor, extras benefits to name a few.

You could end up paying more for private health insurance over your lifetime if you don’t take out hospital cover before 1 July following your 31st birthday. If you join after this time, you may be required to pay a 2% loading on top of your premium per year for every year you are aged over 30 and do not have private hospital cover, up to a maximum loading of 70%. For example, if you take out private hospital cover at age 45 you may pay 30% more than someone who took it out at age 30.

Do you really want to be significantly out of pocket when you are sick?

Seven: Keep track and set some goals

If you don’t know where you are it’s often hard to know where you are going. Hopefully you establish your budget, then revise and review. Your budget is a living document, it keeps changing so you need to keep assessing and adapting to these changes.

Put some realistic goals in place and try to stick to them. You’ll benefit in the long run.

Eight: Understand Superannuation

If you want enough money for a comfortable retirement, spend some time learning about superannuation. Taking a few steps now to boosting your Super will make a huge difference to your lifestyle in the future.

Superannuation is a way to save for your retirement. The money comes from contributions made into your super fund by your employer and, ideally, topped up by your own money. Sometimes the government will add to it through co-contributions and the low income super contribution.

Your employer must pay 9.5% of your salary into a super fund. This is called the Super Guarantee and it’s the law. The Super Guarantee will gradually increase to 12% in coming years.

Over the course of your working life, these contributions from your employer add up, or ‘accumulate’. Your super money is also invested by your super fund so it grows over time. When you retire, you will have money to live off – a nest egg. Super is a lifetime investment that has many benefits. Super can be a minefield of information so ask an expert for help, It’ll save you money in the long run.

So if you are starting out on the career path, in a budding relationship, a new business or “it’s just time”, get a grip on controlling your overall financial situation. Here’s a great Free e-book from Your Money Sense: 6-steps to Financial Security It’s a good starting point to get you in the right mindset when you are starting out.