Australians cannot account for $59 in cash each week – around one third of their total cash spend and one of the highest proportionately in the world, according to a new survey commissioned by Visa.
The international research surveyed more than 12,000 adults in 12 markets around the world (including 1,003 Australian consumers) asking respondents to estimate their “mystery spending,” or the cash they spend but cannot account for every week.
The survey shows that Australians cannot account for $59 a week, 34 percent of their total $176 cash spend a week and equivalent to $3,068 per person each year.
Wednesday, January 13, 2010
Tuesday, January 12, 2010
Credit card debt sneaking up
The average credit card balance is AU$3131.00, slightly higher than it was one year ago, according to new data from the Reserve Bank. Approximately 72% of that balance is accruing interest for the cardholder because it wasn’t paid off within the interest free period.
Last year, the average credit card balance was AU$3127 – of which 71% was accruing interest. While debit card use is increasing, analysts say in dollar terms, credit cards still dominate the market.
If you would like help with budgeting, savings and managing your credit card debt, speak to a financial consultant from Intellichoice today.
Last year, the average credit card balance was AU$3127 – of which 71% was accruing interest. While debit card use is increasing, analysts say in dollar terms, credit cards still dominate the market.
If you would like help with budgeting, savings and managing your credit card debt, speak to a financial consultant from Intellichoice today.
Monday, January 11, 2010
Retiring early is a thing of the past
Retiring early was an option in the boom years of double-digit returns on superannuation. That all halted in 2008, when the financial crisis hit. That meant people in their 50s and 60s were rewriting their life plans to include a lot more work and a lot less retirement.
Super bounced back a lot in 2009, but people are still not retiring in the same numbers as in the past, says Rob Brooks, chief executive of big industry super fund Vision Super.
"The global financial crisis has had a real impact on confidence, two consecutive years of losses, but members are now starting to see their accounts come back. One thing that has happened is benefit payments to members are right down. You can talk to any super fund and I think they will say the same thing - benefit payments are right down because people just aren't retiring."
Not only are members of super funds not retiring and withdrawing money from super, they are not putting money in either. "Over 2009, we did also see a lot of people cutting back on voluntary contributions, but that is starting to come back now," Mr Brooks says.
Super bounced back a lot in 2009, but people are still not retiring in the same numbers as in the past, says Rob Brooks, chief executive of big industry super fund Vision Super.
"The global financial crisis has had a real impact on confidence, two consecutive years of losses, but members are now starting to see their accounts come back. One thing that has happened is benefit payments to members are right down. You can talk to any super fund and I think they will say the same thing - benefit payments are right down because people just aren't retiring."
Not only are members of super funds not retiring and withdrawing money from super, they are not putting money in either. "Over 2009, we did also see a lot of people cutting back on voluntary contributions, but that is starting to come back now," Mr Brooks says.
Thursday, January 7, 2010
3 tips to get your debts under control
Finding a solution to controlling your debts means looking at your lifestyle and being prepared to make some changes. Below are 3 tips to help you take control of your money and debt.
1. Get rid of your credit cards
With all the unsolicited offers of easy credit, loans, store cards and credit cards that come through your letter box every day, getting into debt has become so easy.
1. Get rid of your credit cards
With all the unsolicited offers of easy credit, loans, store cards and credit cards that come through your letter box every day, getting into debt has become so easy.
- If you have store cards or credit cards, get rid of them! Store cards in particular have high interest rates
- Get into the habit of using cash instead of reaching for your credit card to pay for items
- Do you really need that item? Think before you purchase
- Stop overspending. Before you buy that new outfit, wait a day to find out if it is something you really need. Putting time and space into the equation can often make you realise that you don’t need that new outfit after all – even if you want it.
- Never impulse buy. Separate life’s necessities from your wants and desires so you can keep impulse buying in check.
- Write down what you spend. Use a budget planner so you can see where your money goes. Seeing it on paper can make you realise where you are going wrong, and help discipline your spending habits.
- The key to any debt management solution is budgeting and repayment plans. Commit as much money as you can to paying off debts with high interest rates.
- Firstly pay off debts with high interest rates or that put your home or assets at risk.
- Find an independent financial adviser to help you formulate a debt management strategy.
Wednesday, January 6, 2010
New year resolutions add to wealth
Turning your financial goals into new year resolutions increases the chances of success by up to ten times according to new research from the United States.
The US researchers found that almost half of the people who turned their plans and goals into a new year’s resolution had reached their goal or were still on track with it six months later. Less than five per cent of people who had goals for the year but did not make them into a specific resolution were still on track with their plan.
However, experts warn that the resolutions must be very specific to bring any worthwhile benefit. It won’t work to simply resolve to “cut back on debt” for example.
Popular new year resolutions include saving money – experts suggest setting up an automatic savings plan with direct debits – and paying off debts – experst recommend paying the high interest credit cards off first.
For more information or help on savings plans, budgeting, debt management or consolidating debts, speak to one of the financial advisors at Intellichoice today.
The US researchers found that almost half of the people who turned their plans and goals into a new year’s resolution had reached their goal or were still on track with it six months later. Less than five per cent of people who had goals for the year but did not make them into a specific resolution were still on track with their plan.
However, experts warn that the resolutions must be very specific to bring any worthwhile benefit. It won’t work to simply resolve to “cut back on debt” for example.
Popular new year resolutions include saving money – experts suggest setting up an automatic savings plan with direct debits – and paying off debts – experst recommend paying the high interest credit cards off first.
For more information or help on savings plans, budgeting, debt management or consolidating debts, speak to one of the financial advisors at Intellichoice today.
Tuesday, January 5, 2010
A guide to salary sacrificing
Salary sacrificing some of your pay to superannuation can be a very tax-effective way to increase your reitrement savings and also reduce your income tax liability. The amount you sacrifice into your super is essentially deducted from your assessable income, which may reduce your income tax liability.
Instead of paying tax at your marginal rate on the money, when you salary sacrifice your pay to super, it becomes a taxable contribution received by the fund. The contribution (plus any future income earned from the investment) is generally taxed at a minimum rate of 15%.
Because of the generous tax concessions, the government restricts concessional contributions (which include superannuation guarantee, salary sacrifice and personal concessional contributions).
An employer can contribute to super on your behalf and claim a tax deduction for an unlimited amount, but if your concessional contributions exceed $50,000 in a year, you'll pay tax at 31.5% (in addition to the 15% tax paid by the super fund) on the excess. You'll receive the tax bill but you'll be allowed to withdraw money from you super fund to pay it.
If you're 50 or older at any time to 30 June 2012, your concessional contribution limit is $100,000 (instead of $50,000) beore excess tax is charged. The $100,000 limit applies for each year you're over 50 until 30 June 2012,w hen it reverts back to $50,000.
Things you should consider
Don't salary sacrifice funds you think you may need before you retire. If you're younger, it may be more beneficial to pay off non-deductible debt (such as your home loan) instead.
If you're older, the reverse could be true. Generally, salary sacrificed funds will have been taxed at 15% and once you retire you can access the funds tax-free and pay off oustanding debts. Make sure you have a written agreement with your employer before making contributions.
If you would like more information about salary sacrifice or whether this is the best option for you to have a financially secure future, speak to one of the financial advisors at Intellichoice first. They will be able to recommend an option that suits your needs based on your current financial circumstances. Speak to one of the financial planners at Intellichoice by calling 1300 55 10 45 email info@intellichoice.com.au or visit www.intellichoice.com.au for more details on the various services and products on offer.
Instead of paying tax at your marginal rate on the money, when you salary sacrifice your pay to super, it becomes a taxable contribution received by the fund. The contribution (plus any future income earned from the investment) is generally taxed at a minimum rate of 15%.
Because of the generous tax concessions, the government restricts concessional contributions (which include superannuation guarantee, salary sacrifice and personal concessional contributions).
An employer can contribute to super on your behalf and claim a tax deduction for an unlimited amount, but if your concessional contributions exceed $50,000 in a year, you'll pay tax at 31.5% (in addition to the 15% tax paid by the super fund) on the excess. You'll receive the tax bill but you'll be allowed to withdraw money from you super fund to pay it.
If you're 50 or older at any time to 30 June 2012, your concessional contribution limit is $100,000 (instead of $50,000) beore excess tax is charged. The $100,000 limit applies for each year you're over 50 until 30 June 2012,w hen it reverts back to $50,000.
Things you should consider
Don't salary sacrifice funds you think you may need before you retire. If you're younger, it may be more beneficial to pay off non-deductible debt (such as your home loan) instead.
If you're older, the reverse could be true. Generally, salary sacrificed funds will have been taxed at 15% and once you retire you can access the funds tax-free and pay off oustanding debts. Make sure you have a written agreement with your employer before making contributions.
If you would like more information about salary sacrifice or whether this is the best option for you to have a financially secure future, speak to one of the financial advisors at Intellichoice first. They will be able to recommend an option that suits your needs based on your current financial circumstances. Speak to one of the financial planners at Intellichoice by calling 1300 55 10 45 email info@intellichoice.com.au or visit www.intellichoice.com.au for more details on the various services and products on offer.
Monday, January 4, 2010
Kick start your finances for the new year
The Christmas break and the quiet January period is the perfect time to get your financial affairs in order.
It can be hard to set time aside during the year and have a good hard look at your finances. That's why the New Year period is ideal as there are usually less distractions and work pressures. While the prospect of getting lost in all the paperwork might seem daunting, it is well worth the effort to review your personal finances and think about what goals you want to achieve and what you want your financial future to look like. Remember, small changes in the way you manage your money now can have big results in the long term.
It can be overwhelming knowing where to start, but below are three key areas where you can start straight away.
Set up a budget
There's nothing complex about doing a simple budget. You can use the free budgeting calculator on the Intellichoice financial planning website to get an idea on your income and expenses and where your money goes.
Check that your debts are under control
While using a credit card can be more convenient then using cash, expenses can quickly add up. You should pay off your credit card in full each month, but if you can't do that, at least try to pay off the minimum amount due so you don't get charged a late payment fee.
If you have too many credit card debts or personal loans, speak to one of the financial planners at Intellichoice about a debt consolidation loan. A debt consolidation loan is a single loan that combines all your debts into one, leaving you with just one repayment.
Review your super
While retirement might seem a long way off, your superannuation is likely to grow into the biggest asset you own after your house. That's why it is important to make sure that you are still on track to achieve your retirement goals. One of the simplest things you can do is to make sure that all your super funds are consolidated into one - so you don't have to double up on super fees etc. You can also speak to one of the financial consultants at Intellichoice about finding lost super.
For more information on how Intellichoice can help you achieve your financial goals for the new year, call 1300 55 10 45 or email us directly on info@intellichoice.com.au.
It can be hard to set time aside during the year and have a good hard look at your finances. That's why the New Year period is ideal as there are usually less distractions and work pressures. While the prospect of getting lost in all the paperwork might seem daunting, it is well worth the effort to review your personal finances and think about what goals you want to achieve and what you want your financial future to look like. Remember, small changes in the way you manage your money now can have big results in the long term.
It can be overwhelming knowing where to start, but below are three key areas where you can start straight away.
Set up a budget
There's nothing complex about doing a simple budget. You can use the free budgeting calculator on the Intellichoice financial planning website to get an idea on your income and expenses and where your money goes.
Check that your debts are under control
While using a credit card can be more convenient then using cash, expenses can quickly add up. You should pay off your credit card in full each month, but if you can't do that, at least try to pay off the minimum amount due so you don't get charged a late payment fee.
If you have too many credit card debts or personal loans, speak to one of the financial planners at Intellichoice about a debt consolidation loan. A debt consolidation loan is a single loan that combines all your debts into one, leaving you with just one repayment.
Review your super
While retirement might seem a long way off, your superannuation is likely to grow into the biggest asset you own after your house. That's why it is important to make sure that you are still on track to achieve your retirement goals. One of the simplest things you can do is to make sure that all your super funds are consolidated into one - so you don't have to double up on super fees etc. You can also speak to one of the financial consultants at Intellichoice about finding lost super.
For more information on how Intellichoice can help you achieve your financial goals for the new year, call 1300 55 10 45 or email us directly on info@intellichoice.com.au.
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