Cash

7 Easy Hacks That Will Make You A Pro At Managing Your Money

If only making money was as easy as spending it…

March 29, 2017
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This Lucky Guy Is The Winner Of Our Massive $50,000 Cash Prize!

Luke McDonnell got more than he bargained for when he tried to sell his car.

November 11, 2016

Choosing The Right Loan For You

The world of finance is complicated. You can always go onto price comparison websites to look at the costs of some loans or you can visit the Money Advice Service to seek help. Where possible you should always take your time when you are choosing a loan.

RELATED: How To Ask For A Pay Rise

Do you really need a loan?

If you really feel that you need a loan for an important purpose, try to avoid taking out credit. It’s always expensive and if you can’t afford the repayments your financial situation could deteriorate. Try and see if you could curtail your outgoings and save the money yourself for your proposed expense. Most people use credit because their regular budget doesn’t allow them a certain level of expenditure. If this is your situation then you must evaluate if you can realistically afford to repay any credit that you may wish to secure.

Secured or unsecured loans

There are two major types of loan. One that’s secured on your property or possessions, where the creditor can always be confident that they can recoup their losses through your assets, or an unsecured loan. If you borrow from a bank or credit card, or even a payday loan company you are taking out an unsecured loan. The length of time that you borrow the money for can vary, as can the interest rates. Though unsecured loans are generally more expensive and for smaller sums of money.

Guaranteed loans

If you have a poor personal credit history, there is still an option. If you have a close friend or family member who is prepared to vouch for you, and cover the loan should you fall into difficulty or arrears, you may be able to access a guaranteed loan and avoid the sky-high interest rates offered by payday loan companies.

Typically you will be able to borrow between £1,000 to £7,500 and you can repay the sum over five years. As long as your guarantor is confident that you will repay the debt this is an excellent option if you need a large household item, for example to replace a broken oven. The Independent suggests that you can also rebuild your credit history with this type of finance. The APR is generally around 50%, which is a lot lower than that offered by payday loan companies.

Credit unions

Another source of finance are credit unions. According to The Guardian, it’s 50 years since these institutions were established in the UK. They offer a low interest alternative to payday loan companies and banks, and encourage customers to save as well as borrow. The rates of interest offered by credit unions to borrowers are extremely competitive, some charge as little as an APR of 12.7%. If you want to borrow from a credit union you will have to be a member of your local organisation. The number of credit unions is growing and there will probably be one near you that you can sign up with. You’ll also be offered free life insurance, so if you die before you’ve paid back your debt, the repayments will be protected. This provides peace of mind for your family.

November 4, 2014

The Best SMSF Advice You Can Be Given in Your 30s

As you near retirement, investment advice is important with more retirees looking toward SMSFs for help. Self-managed super funds can be managed without much hassle if you have the right information. When you are in charge of your own investment choices, you’re more likely to be more profitable and more engaged in the process.

The latest research shows SMSF trustees are getting younger, with nearly a third between 35 and 44 years. Thus, it’s absolutely crucial you’re armed with the best advice in preparation for a successful retirement. We check out a few vital tips below.

Understand your role in SMSFs

The purpose of your SMSF is to ensure that everyone gets an adequate retirement. Professionals should be used because it is difficult for a novice to understand all of the tax laws to protect your assets. The sole purpose test must be passed in order to receive all the full tax concessions that are available to SMSFs.

Diversification, risks, and return on your assets should be discussed according to your members’ needs and circumstances. Many people will re-evaluate their SMSF assets near retirement age and may add to their portfolio a more low risk and low reward investment.

Know your duties as a trustee and the governing bodies

For instance, if you’re setting up an SMSF, you should consider devising an investment strategy. The strategy should include how to accept contributions and pay the benefits.

The authority of SMSFs is the Australian Taxation Office. It enforces the majority of regulations and restrictions that are related to an investment strategy. When you are a trustee, you have full control over your retirement investments. You can choose to invest in shares, property, art, or collectables.

Know how to keep your fund compliant 

Ensure that you’re in compliance with all tax laws and super laws. This will also protect your members’ assets. Again, the sole purpose test must be passed to get full tax concessions.

If anyone is under the age of 60, the amount of tax deductible contributions that can be made without accruing a penalty is $25,000. If you’re over the age of 60, the maximum amount is $35,000. Many people make a salary sacrifice to make the contributions. Check with your employment agreement to determine what the maximum amount allowed is at this point. In general, you need to work for at least 40 hours for 30 consecutive days before you can make non-deductible contributions and tax deductible contributions to a super.

Know how to make investment decisions

In general, your investment decisions should always be evaluated according to the increasing returns on your fund. Experts suggest that you change your SMSF asset to include more low reward and low risk investments. These are the basics you must know before investing in these types of products.

Be aware of personal tax deductions to superannuation

Self-employed people and investors can receive less than 10 percent of their income deducted for superannuation. Always notify the fund and tell them how much you’re eligible to claim every year. Always save your paperwork for your accountant or tax agent.

Any tax deductions that should be taken from a personal savings or an inheritance can come from your personal income. You can also transfer personal investments, an inheritance, or profit from the sale of investments. Keep in mind that you can contribute up to $150,000 after taxes in 2014. If you’re under 65, you can contribute up to $450,000 in a three year period. A tax penalty may be assessed if the contribution caps are exceeded. The penalty can be as high as 46.5 percent.

After July 1, 2014, the cap will increase to $180,000, and $540,000 can be contributed over a fixed period of three years. A professional adviser can help you if you do not understand the process or if you meet the upper requirements for contribution.

Be aware of government co-contribution

If your adjusted income is less than $48,516, you may be eligible for the government co-contribution. If you make super contributions before the end of the financial year, you can consider this feature. The government will contribute 50 cents to your superannuation for every dollar that you contribute. The maximum government contribution is $500.

Know the amount of taxation on superannuation pensions

Keep in mind that the superannuation fund will be taxed at 15 percent rather than being tax free. You should be aware of these taxes to ensure that you are taxed in the appropriate bracket. When you turn 60, the lump sums that are taken from the superannuation are not taxable. Thus, any funds removed before the age of 60 will be taxed. Keep in mind that no tax is payable on amounts up to $180,000.

SMSF asset valuations

Assets present in your SMSF must be valued in a financial year. The assets in SMSF need to be valued every financial year. Property, artwork, and unlisted investments are recorded in your financial statements to ensure that your investments are sound.

By Jayde Ferguson, a freelance writer based in Western Australia. Connect with her on Google+ today.

September 23, 2014

Addicted to Debt? Answer These Questions and FInd Out

‘Buy now, pay later’ is practically the mantra of the modern world, but you can give yourself a hangover that lasts a lifetime if you use debt to indulge.

A little like a dodgy eye-liner effort, you may need to apply more and more to mask your previous mistakes. But a debt mess is far more difficult to erase.

Here are the five questions that tell you if you’re getting in too deep.

1. Do you find it difficult to distinguish between needs and wants?
It’s possible you ‘need’ far fewer things than you think. Indeed caveman convention (well we now follow their diet) says survival requires just food, shelter, clothing and water. But even in those core categories, your expectations may belie your limitations. We’ll happily pay $15 for fancy water for goodness sakes!

2. Do you regularly make unplanned, impulse purchases on credit?
One of the best ways to keep your finances under control is to plan and cost your spend in any given pay period. If something is going to be unaffordable with one pay, you should spread the cost – stashing the cash – across however many it takes. If you don’t trust yourself to wait until you have the money, use lay-by so you have to. Yes, many shops still offer it.

3. Do you spend more than you earn each pay period?
This is a big warning sign as it means you go backwards each and every time… and the only way to do that is to use credit. You need to live within your means. In fact, you need to live well within your means – smart budgeting is about having a surplus of money each period that you can save for the future.

4. Are you struggling with – possibly growing – debt?
The larger your debt the larger your repayments, which means the less money you have left to live. And pretty soon you may be forced to reach for the credit card again to pay even for the essentials. Potentially a HUGE warning sign.

5. Do you owe more money than what your assets are worth?
A bigger picture consideration but also a critical one; this means your net worth is negative, and possibly going backwards each and every day – hardly good money management or prosperity planning.

Perhaps you could get away with answering ‘yes’ to one or two of the questions above, but any more than that and your future financial security – and that of your family – is in jeopardy. If you answered ‘yes’ to all of them, you need to contact your creditors to ask about more lenient repayment terms or easier ways to defeat your debt. This is the surest way to ensure your current predicament doesn’t dog you forever. Even if your answers were all ‘no’, it’s almost certain your money (rather than you) could be working harder.

Nicole is the founder of TheMoneyMentorWay.com and developer of the 12-Step Prosperity Plan, an achievable and even enjoyable blueprint to take Aussies from worry to wealthy. Nicole’s writing has earned her top personal finance awards in both the United Kingdom and Australia. Her career credits include founding and editing The Australian Financial Review’s Smart Investor magazine, and reporting and editing for the magazine arm of the UK’s Financial Times. Author, qualified financial adviser and Fairfax’s Money Matters columnist for the last decade, Nicole is a regular on television and radio. She talks money without the mumbo jumbo. Follow her on Twitter at @NicolePedMcK.

October 15, 2013

How to Save $6386 a Year by Getting Smart With Your Bills

My guess is you spend more time dwelling on your Facebook status than your financial one… planning your Pinterest board than your interest hoard…linking in than stopping money leaking out.

But it is. And the irony is that technology is making the flow faster.

A growing phenomenon I’ve dubbed Digitally Induced Laziness sees us blithely ignore all the automatic payments that come out of our accounts each month – allowing oh-so-convenient to become oh-so-conned.

Providers of everything from utilities to financial services rely on their bill-DIL existing customers to fund big discounts to entice new ones. You may even find your deal gets slowly worse.

Here is where you’re likely to be losing the most money.

Your mortgage

The big banks are exploiting your electronic inertia big time. The difference between the standard variable rate offered by the Big 4 and the most competitive mortgage on the market has swelled to a shocking 1.42 percentage points. Historically they’ve only skimmed 1 point or so off the top. Today you’ll pay 5.91 per cent versus just 4.49 per cent, which means you could save on the average $300,000 mortgage a massive $75,000 in interest.

Possible saving: $250 a month; $3000 a year. BUT it’s possible to take this total interest saving from $75,000 to $122,644 without paying an additional cent… you simply need to maintain your repayments at their existing level. This means you’ll also clear your debt more than five years early, after which your money is your own. And your big-bank lender may even agree to match this if you threaten to leave.

Your electricity

For all the talk about big increases in the price of electricity, and some areas have seen hikes of four times the rate of inflation in the past five years, you can actually make huge savings. A family can save a big chunk by moving to a better offer; you just need to be wary of contracts that commit you for a period of time as you may end up stuck on an increasingly uncompetitive deal.

Possible saving: $386 a year, says Market researcher Energy Watch.

Your insurances

You could probably be paying 15 per cent less on every single general insurance policy – think car, home and contents. The potential savings could be even higher with risk insurers like life or income protection providers, but because of age or health history it can be trickier to change. You could also save a truckload on your health insurance – and bear in mind that laws designed to keep health insurance competitive dictate that you do not have to re-serve waiting period for hospital cover.

Possible savings: More than $2000 a year.

Your telecommunications

New players are massively shaking things up when it comes to your mobile phone and your data plans. Look into signing up with a new provider as soon as you get off a phone contract; you’ll be stunned by the savings now on offer. Consider also bundling your internet into the deal to save a bucketload more.

Possible saving: Maybe $1000 a year (and that’s assuming you’ve already been tech savvy enough to get on to Voice-over Internet Protocol like Skype  for overseas calls).

Screen time of a different kind could yield big results if you’ve inadvertently become a bill DIL. In fact, swap Instagram for an hour a month for probably an instant grand.

Fess up – how much time do you spend each month dealing with your finances?

Nicole is the founder of TheMoneyMentorWay.com and developer of the 12-Step Prosperity Plan, an achievable and even enjoyable blueprint to take Aussies from worry to wealthy. Nicole’s writing has earned her top personal finance awards in both the United Kingdom and Australia. Her career credits include founding and editing The Australian Financial Review’s Smart Investor magazine, and reporting and editing for the magazine arm of the UK’s Financial Times. Author, qualified financial adviser and Fairfax’s Money Matters columnist for the last decade, Nicole is a regular on television and radio. She talks money without the mumbo jumbo. Follow her on Twitter at @NicolePedMcK.

September 30, 2013

How To Save Money In 6 Easy Steps

Who hasn’t faced a cash crunch? We’ve tried-and-tested these easy money saving tips that will save you the money for that holiday, and still manage to pay your rent on time.

1. Healthy eating

Here’s another good reason to eat healthy: it costs less than eating out! Junk food might sound cheap, but cooking at home always comes in cheaper. Even those cheap pub meals add up (think about those add-on bottles of wine and dessert!). It’s not even junk food that’s expensive – those daily visits to the coffeeshop and juice bar eats up a lot of your income.

2. Healthy lifestyle

A healthy lifestyle means no binging, no binge drinking, and exercising regularly. What you don’t realise is all these are money-saving activities too. A healthy lifestyle is definitely easy on the purse and has long-lasting effects on your finances as you won’t be spending half your income at the pub.

3. Decide on a budget

Even if you’ve heard it many times, but found it difficult to do so, sticking to a financial budget does help in saving money. Start by paying all your bills at the beginning of the month. Direct debit is a great way to automate bill paying and free up your time. Keeping a schedule of payments allows us to realise how much money we can spend once the bills are paid. Also, log in to your internet banking regularly and check your account balance. Seeing your current balance on your savings and credit card accounts is a tangible reminder of your finances.

4. Planned shopping

You will be surprised how much you can save if you carry a shopping list as opposed to just popping into the shops without a plan. Also, shop for groceries when it’s most convenient for you – if a weekly weekend shop is best, schedule that in and stick to it, but if you’re buying in bulk and wasting a lot of groceries, consider 2-3 smaller shops a week.

5. Pay in cash

Believe me, I tried this myself and it helps. Looking at my hard-eared income disappear in physical cash is far more of a wake-up call to control my spending, than just signing the bill willy-nilly.

6. Go eco-friendly

When you use power-saving devices, not only do you get brownie points for looking after the environment, but you are also saving on those mounting power bills, water bills, etc. Another tip we love is raiding your local vintage shop next time you feel a shopping spree coming on, or holding a clothes swap with your friends.

How do you save money? Share your tips in the comments below!

July 11, 2013