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Successful investment is not about reacting to market turbulence. It is based on a clear understanding of the long-term nature of wealth creation and how making sensible, unemotional decisions about where and when you will invest. This week we share a downloadable PDF on the Ten Worst Money Mistakes – and how to avoid them written by financial services guru, Louise Biti.
Taking on the big banks to recover excessive bank fees may seem out of the reach of many Australians. However, IMF Australia has started a class action suit which promises to be the biggest in Australian history. With only six days left to sign up, time is running out to stake your claim.
At its peak, over 1000 Australians an hour were signing up to be part of IMF Australia’s class action suit. With many people feeling that they have been ripped off by the big banks, this is your chance to get your money back. However, time is running out to get in on this unique chance to make the big banks accountable. There is only six days left so sign up now.
Sadly, some opportunists are using this once in a lifetime class action to scam people out of more money. These fraudsters are calling many Australians claiming to be representatives of the class action. For the nominal fee of $150, they are promising a massive return of $2500 once the funds are received at their Western Union branch in India.
Fraudsters are also getting peoples credit card details and expiry dates or their internet banking login details over the phone and through fraudulent emails, all claiming to be relevant to the class action.
It is a reminder that no matter the situation, vigilance is the key, and under no circumstances should people hand out vital information such as these over the phone or through emails.
If you have been contacted by anyone asking for personal financial details over the phone, be email or mail, then you should report this to the Australian Securities and Investment Commission.
If you’re lucky enough to not be relying on your tax refund to pay an unexpected bill, there are some clever ways to make the most of your rebate.
It’s always nice to get money back from the ATO but use it wisely and it could go further than you think.
1. Pay a lump sum off your credit card
If you’re one of the growing number of Australians who don’t clear their credit card balance each month, paying just the minimum could take up to 11 years to pay off a balance of $10,000. How much you owe and how long it will take to pay can be confronting but simple measures such as paying a lump sum or a small additional amount each month can help tame your debt.
Check out how a lump sum payment can accelerate paying off your credit card balance.
2. Add to your super
The cost of living is rising but investments are falling and according to The Association of Australian Super Funds (ASFA), it now costs around $38,000 a year for a single to enjoy a comfortable retirement. The most cost effective way of adding to your super is to take advantage of the Government’s co-contribution.
If you have an income of less than $31,920, the government will match each dollar contributed after tax, up to a maximum of $1,000. As your income increases, the amount the government contributes decreases, phasing out completely when your income reaches $61,920.
Find out how additional contributions can boost your super fund
3. Saving for a rainy day
One of the worst things you can do with a lump sum rebate is put it in your everyday bank account and watch it fritter away. While it’s understandable that many Australians may be counting on a tax rebate to fund day-to-day living, it can be out to better use in a high interest account. Leaving your money in a savings account even for a few months can have financial benefits and may take you closer to your dream of a holiday or new car.
Find out how a high interest savings account can boost your coffers
4. Reduce your mortgage
The days of living mortgage free are almost a thing of the past, with the cost of buying our own home on the increase. A home loan is probably the biggest financial burden held by a household and reducing the amount owed can take years of the duration of the loan. If your loan will allow you to make extra payments without fees for doing so, then you should consider a lump sum payment when you have the money sitting in the bank.
Consider if reducing your mortgage is the best course of action for your finances.
5. Debt free Christmas
Apologies for being the bearer of bad news but Christmas is just around the corner. By taking advantage of the off-season offers and layby facilities, you could be prepared for Christmas without the last minute rush. And save yourself a credit card hangover in January!
Getting into debt or struggling to live on your income is often more common than keeping money in the bank. Understanding your bad money habits and how to fix them will help get your finances back on track.
Living beyond your means – This is easily done and is not the domain of those with a lavish lifestyle. Having a budget and sticking to it may be easier said than done but good discipline in this area may help stop the overspending. For a simple budget planner, visit understandingyourmoney.gov.au.
Know what you owe – You may have a rough idea of what you owe in terms of credit cards, loans, mortgage, etc but seeing the total figure in black and white will help focus the need to reduce your debt. Get together your bank statements for the last six month and chart your outgoings to debt on a simple spreadsheet. If you feel overwhelmed by the figure on the bottom line or feel you need some guidance, consult a financial counsellor. To find a free financial counsellor in your area, visit fido.gov.au
Credit card spending – Credit cards have their place in most people’s financial planning and well managed, this shouldn’t be a problem. Spending on credit cards should be kept to a minimum and if possible, the balance paid off each month.
Balance transfer pitfalls – One of the biggest pitfalls of transferring a balance from one credit card to another is not understanding the rules of any special offers. Providers commonly offer a special rate on the amount transferred but if you spend on this card, you will be charged the full rate of interest. This amount will not be reduced until the initial amount is cleared and the amount you have spent on the card will accrue interest at the higher rate. Find out more about credit card balance transfers, visit
fido.gov.au
Check your credit file – You may think that you have a clear credit file but there may be something lurking that can adversely affect your rating. A simple input error, information lodged against you rather than someone with a similar name or credit fraudulently obtained under your name will be noted on your file and needs action to be rectified.
To find out more about checking your credit file, visit protectfinancialid.org.au.
Plan for the future – Financial planning is a necessary evil. No matter how much or how little money you have, knowing how to make the most of it is vital to ensure even a modest lifestyle. To find an independent financial planner in your area, visit the Financial Planning Association.
Know your benefits – Making sure you are claiming the correct Centrelink benefits may put a few extra dollars in your pocket. You can visit a Centrelink Financial Information Services officer free-of-charge. For more information, visit Centrelink.gov.au.
Getting ready for tax return time will help take some of the stress out of completing your tax return and will make sure you get any tax refund quicker!
The records you should have ready are:
· tax file number
· spouse’s tax file number
· spouse’s date of birth
· bank account details
· financial statements showing the total amount of interest earned
· share dividend remittance advices
· details of any assets you have sold during the financial year
· business income records
· income from rental property details
· foreign investment income details
· Centrelink payment summaries
· receipts for taxable deductions
· vehicle log book if using your vehicle for business purposes
· spouse’s taxable income
· previous year’s tax return
Once the tax year has ended at the 30 June, you should receive a group certificate from your employer and an end of year statement from your health fund. This will tell you if you need to claim the 30% rebate.
Even the most financially astute and careful bookkeepers will at some point have been slugged by an excessive bank charge for going over their account limit or missing a payment. Now’s your chance to get your money back.
Given the fact that around 1000 Australians each hour are signing-up to be part of the biggest class action in Australia, exorbitant bank fees are something most people feel strongly about. A dozen banks, including the big four, will be the target of a multi-million dollar class action suit led by litigation financier IMF Australia Ltd and its subsidiary Financial Redress. The basis of the action will be that banks acted illegally by charging disproportionate fees for overdrawn accounts, late payments and bounced cheques - aka exception fees. Instead of charging the actual cost of administering and reclaiming such defaults, which should be between a few cents and a few dollars, banks consistently charged blanket fees of between $20 and $60.
Exception fees have been dropped or lowered considerably in the last 12 months but that won’t stop the action. Australians who have been charged such fees are being asked to register their details and get behind the action. The action will be financed on a no-win, no-fee basis, with any compensation received being subject to 25 per cent commission payable to IMF.
Registration has been kept simple to make the opportunity available to as many people as possible. To find out more or register your details, click YOURLifeChoices simple short cut.
With a firm grip on her travel budget, Melanie Ball explores Australia for dollar-friendly holiday options.
A change is as good as a holiday, proverbial wisdom tells us – in one of those sayings that is as inaccurate as it is irritating. But escaping the everyday usually costs money, alas, and the global economic crisis is eating into that. So how lucky are we to live in a country flush with inexpensive holiday options.
Although petrol costing under a dollar a litre has almost certainly joined the ranks of the extinct, the great road trip, or at least a shortened version, lives on with campervan relocations. Rental companies frequently need vehicles moved between major cities, and a relocation deal from Alice Springs to Darwin might allow a week for the trip at a charge to you of just $5 a day.
These trips generally involve you paying for the petrol en route, but you’ll often receive a refund up to an agreed amount when you deliver the vehicle to its destination. Further, the time and kilometres allowed you to complete the journey generally include a provision for side trips. The Alice to Darwin relocation I investigated allowed for 150 km more than the direct road route, ample for sizing up the Devils Marbles, downing a beer at Daly Waters pub and paddling Katherine Gorge on your way north.
Hefty excess kilometre charges aside, campervan relocation is cheaper than every form of outback transport except camels!
Prefer salty air and seaspray? Savour them on South Australia’s Eyre Peninsula, a patchwork of farms, parks and towns bounded by the Great Australian Bight, Spencer Gulf and vast salt lakes.
A west coast drive takes you from Ceduna, and the Nullarbor Plain, to Point Labatt to see (take binoculars) and smell (no additional equipment necessary) Australia’s largest breeding sea-lion colony. Dolphins surf the waves that roll through Venus Bay’s narrow entrance, and closer wildlife encounters await in Baird Bay, where snorkellers go mask-to-whiskered-nose with playful juvenile sea-lions.
And then there are King George whiting to catch, Coffin Bay oysters to shuck, and bluefin tuna to hand feed.
For a complete break from driving, train from Sydney to the Blue Mountains and explore beyond the Three Sisters. Step off the often crowded sandstone escarpment onto some of Australia’s best walks. Follow in coal and shale miners’ footsteps to Ruined Castle for breath-taking views of Kings Tableland. Wander through the Valley of the Waters, where cascades tumble from mossy ledges on which fairies must surely dance in private.
Accommodation (all budgets) is often just a stroll from trail heads – as are art galleries, gift shops and boutiques, in case your passion for exercise wanes. Don’t miss the Norman Lindsay Gallery in Faulconbridge (free for National Trust members) and afternoon tea in Katoomba’s Art Deco Paragon Café (and chocolatier).
Chocolate makers call Tasmania home, too, but there are other reasons to cross Bass Strait and check into Hobart. Ludicrously cheap flights from Melbourne leave cash in hand for enjoying the island state’s oysters, Atlantic salmon and ales.
With its spectacular harbour and 1270 m scenic lookout (Mount Wellington), Hobart is an ideal base for day trips to Port Arthur and Bruny Island, the city’s adventure playground. Try to stretch your budget to a flight over the jagged Arthur Range and into the Tasmanian Wilderness World Heritage Area, otherwise accessible only on foot. You’ll land at Melaleuca, where a hide allows you to spy on endangered orange-bellied parrots before you head to the local jetty to cruise beautiful Bathurst Harbour.
Back in Hobart, the ghosts of convict ships crowd Constitution Dock (free).
Convicts built the intimidating limestone prison overlooking Fremantle, Western Australia, and penal history flavours a holiday in this famous port town. So, too, do great maritime characters and stories, such as the Batavia. Wrecked off Western Australia in 1629, she is showcased in the excellent Maritime Museum along with exhibits ranging from other early wrecks to America’s Cup-winning Australia II and the Ovens, a retired Oberon Class submarine.
It is a short train ride from Fremantle’s café precinct and marina to Perth. There is a bike route up the Swan River, as well, and river cruises to the city. Catching a ferry in the opposite direction puts you among Sandgropers revelling in Rottnest Island’s pristine beaches and turquoise waters – and fighting greedy seagulls for chips!
Pelicans are more frequent visitors to the Murray, and this once mighty river is still a route to a great Victorian escape, despite ongoing water problems.
Visit historic river towns, stopping to chat with a winemaker, publican, motel owner or farmer. Stand under waterfalls in an Upper Murray national park. Relive the steam era in Echuca or watch hot air balloons rise over a houseboat in Mildura. Or simply pitch a tent among riverside gums and spend a week reading or fishing or just kicking back in the company of rowdy corellas.
Another fabulous destination for kicking back is the Sunshine State, and relaxing doesn’t come easier than on Fraser Island.
The world’s largest sand island is the place to dip your toes in tea-coloured lakes and teeter on sandblows fringing deeper water; to look up at towering trees in shadow-filled forests and walk kilometres of ribbon-like beach; to watch brahminy kites wheel on wings of burnished copper. With vehicular ferry passage from $80, resorts, cabins, private camp grounds and kilometres of beach camping (beware march flies in summer), Fraser is a treasure chest brimming with treats that cost next to nothing!
Money-saving tips
Be flexible about when and where. Destinations are cheaper and less crowded outside holiday seasons – and off-peak weather is rarely as bad as you fear!
Midweek flights generally cost less than weekend departures.
Compare the cost of petrol and time at the wheel with flying and hiring a car.
When buying airline tickets, look out for sales and promotions, such as Virgin Blue’s Happy Hour and Jetstar’s Friday Fare Frenzy. Compare domestic flights across airlines (except Tiger) at www.webjet.com.au. I recently booked Melbourne-Darwin tickets on Jetstar for the Monopoly-money price of $224 return!
Choose budget accommodation for most of your holiday and splurge on the final nights. You will remember the adventure of the former and the comfort of the latter.
Last-minute accommodation sites (e.g. www.wotif.com) offer great deals, but also check individual properties. Discounts for multi-night bookings are common.
Cook as many meals yourself as you can; make dining out a treat.
Contrast guided tours with do-it-yourself; the latter often give more freedom, the former can be better value and less hassle.
National Trust membership can soon pay for itself if you visit a few properties.
MORE
Many vehicle rental companies offer relocation deals and you can compare campervan relocation availability, costs, rental conditions (reduced insurance coverage, etc.) and book vehicles at one site.
Ph 1300 789 059 (toll free)
Web www.standbyrelocs.com
Email
Tourism Eyre Peninsula has all the information you need for a great South Australian holiday, including what to do and where to stay.
Ph 1800 067 739
Web http://www.southaustralia.com/TourismEyrePeninsula.aspx
Email
The Seafood & Aquaculture Trail showcases Eyre Peninsula’s delicious offerings through tastings, visits to factories and tours.
Ph 1800 067 739 (Tourism Eyre Peninsula)
Web www.seafoodtrail.com
Email
The National Trust manages historic properties around Australia. Membership entitles you to free entry and you can join online.
Ph (02) 6247 6766
Web www.nationaltrust.org.au
Email
Trawl the Visiting the Blue Mountains website for comprehensive information on accommodation, adventure and attractions, dining and events. Click on ‘Bushwalks’ in the ‘Things to See and Do’ box for descriptions and grades of walks.
Ph
1300 653408 (Blue Mountains Tourism)
(02) 4787 8877 (National Parks and Wildlife Service)
Web http://www.bluemts.com.au/tourist/default.asp
Discover what to do and where to stay in and around Hobart via Tourism Tasmania’s website and the Hobart eguide.
Ph 1300 827 743
Web
www.discovertasmania.com
www.hobarteguide.com
For everything you need to know to visit Fraser Island, including the cost of vehicle permits (private vehicles), camping and barge times, log on to the Visit Fraser Coast and See Fraser Island websites.
Ph (07) 3512 8100
Web
www.seefraserisland.com
Go to the Fremantle Visitor Centre website for information about things to do and see in the Port City.
Ph (08) 9431 7878
Web www.fremantlewa.com.aua>
Email
The Western Australian Maritime Museum website provides further information on the Museum’s three main sites plus details of entry fees and opening hours.
Ph
(08) 9431 8444 (Shipwrecks Galleries)
(08) 9431 8334 (Maritime Museum and submarine Ovens)
Web www.museum.wa.gov.au/maritime/maritime.asp
Email
Get into the flow of Murray River travel – including by houseboat – through the Discover Murray website.
Ph (08) 8363 6244
Web www.murrayriver.com.au
As previously published in YOURLifeChoices magazine
Getting behind with your tax returns can be stressful, as YOURLifeChoices subscriber, John has discovered. Fear not, help may be available.
Q. John
I am on a disability pension and am desperately seeking help. I need to lodge multiple tax returns dating back to 2003. This has not only become very stressful for me, but could be financially difficult due to not only the cost of a consultant’s fees, but also possible fines from the Taxation Department. I am desperate to finalise this matter. Are you able to advise of anyone who could help me with these tax returns?
A. The first thing to do is not panic. If you are willing to work through your tax returns, there are people who can help.
The Australian Tax Office (ATO) has a program called Tax Help. Through a network of volunteers, who are not ATO staff but are trained and supported by the ATO, low income earners can get help filling in and lodging their tax returns. Tax Help is available in all cities and many country centres throughout Australia.
For more information, call the ATO on 13 28 61 or visit the ATO website.
The thought of taking control of your finances can seem daunting, especially if you’re struggling with debt or just finding it difficult to make ends meet. There are a range of free services to help get your finances back in order.
The cost of living has crept up on most of us and what we could comfortably afford last month, might become a financial burden next month. The most important thing is not to bury your head in the sand and hope that things will improve. Financial counsellors help people, free of charge, who are in financial difficulty or who may shortly be facing money problems. They are based in every state and territory.
Financial counsellors will help you take control of your finances, get your debt to a manageable level and can refer you to support services, such as gambling, family or personal counselling.
For more information on how financial counsellors can help or where to find your nearest counselling organisation, visit the Australian Securities & Investment Commission.
The Australian Government funds community organisations to provide free financial counselling services to low income earners who are experiencing financial difficulties. Find out about the Commonwealth Financial Counselling Program (CFCP) and other financial counselling services, and see the directory of organisations .
providing CFCP services
Centrelink’s Financial Information Service (FIS) offers counselling to help you manage your pension or give advice on how to plan for retirement or other life stages. For more information, visit Centrelink.gov.au
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