Australians attitude to debt and savings - a recent survey

A recent survey conducted by RaboDirect has found the following stats:

• About 74% of respondents believe paying off their debt is the best way to save money
• One in five credit card holders worry about not paying off their bill in full each month, yet one in six are happy to make purchases knowing they cannot pay for it in the interest free-period.
• About one third of survey respondents consider their financial situation has worsened in the last year and have taken steps as a result. They have cut back on luxuries, such as dining, entertainment and holidays, and some have also considered their day-to-day shopping habits.
• The survey also found that 28% of Australians say their savings would only last two months if they lost their job
• Just over one in ten (13%) have no savings at all. This paints a worrying picture at a time of the year when the job market traditionally slows down.
• Low interest transaction accounts are the most popular home for ‘savings’ with 46% of regular savers putting money in their transaction account (representing 41% of total savings in last six months). This is despite the fact that interest paid on these accounts is negligible and often eaten away by fees

Below are some tips for better financial management:

• Set a budget and revisit it regularly and adjust as necessary to match personal/financial needs or changes to your finances. eg got married, started a family or got a new job
• Spend less than you earn!
• Pay off your most expensive, non deductible debt, first eg credit cards
• Regularly check that your financial products (such as your mortgage loan, transaction and savings account, insurance, credit cards etc.) suit your needs and offer the best value
• Have your salary paid directly into a high interest savings account rather than leaving money idle in a low-interest bearing account
• Seek help early if things get out of hand - speak to a financial advisor for more help

Savers can save $330 by switching

Savings account holders can save up to $330 by switching to a better account. According to consumer group Choice, nearly 80% of Australians had not considered switching banks in the last two years.

Choice's Better Banking campaign director Richard Lloyd said "that's what the major banks rely on, they rely on lots of Australian consumers staying where they are and that's when you get hit by high fees, poor interest rates and unfair terms." What we're saying today is `consumers don't wait for the government's reform package ... if you take simple steps now you can give yourself an early Christmas present'.''

Mr Lloyd continued by saying that smaller banking sector players were usually those offering the best deals and consumers should not be nervous about moving to smaller finance institutions as they were regulated in the same way as banks. Federal Treasurer Wayne Swan said: "I'd encourage every Australian family to check out the range of products on offer and compare them to the big banks.''

Two thirds of Australian's don't have enough money

Almost two thirds of Australians think they do not have enough money. According to an online poll published in News Limited newspapers, approximately 61% of respondents said they were not happy with their finances. Approximatley 35% of survey respondents said they were happy with their financial situation, while 4% said they are not sure.

If you would like help saving or budgeting, speak to one of the financial planners at Intellichoice on 1300 55 10 45.

How to get the best from your super

We know superannuation can seem boring, but putting good strategies in place now could make a big difference to your future. And getting your super sorted doesn't need to be time consuming or hard work. Here are some quick and easy tips to help get you on your way.

1. Find lost super
Did you know that there's more than $13 billion of lost super in Australia? That's a lot of money and there's a chance some of it's yours. It's easy to search for your money via SuperSeeker, the Australian Taxation Office's (ATO) online search tool. After all, if you lost a $100 note, you'd spend at least a few minutes looking for it, so why not spend a little time finding your lost super? Go to www.ato.gov.au and follow the links to SuperSeeker to search for your lost super.

2. Consolidate yoru super and save on fees
And once you've found any lost super, don't burden yourself with multiple fees and bundles of paperwork by having several super funds. It makes sense to roll it all into one super fund. Fewer fees and less paperwork!

3. Exercise your right to choose
So now that you have all your super in one place, make sure you choose where it's invested. Super funds nowadays have many different investment options that members can choose from. So no matter what stage of life you're at or what your investment goals are, your super fund will have an investment option that's right for you. Alternatively, speak to your financial adviser for professional help and they'll be able to assist you in deciding on an investment option that suits your needs.

4. Make the most of profesional advisers with the right expertise
After you've done all this, and if you'd still like an extra helping hand getting your super sorted, why not use the professional services of a financial adviser from Intellichioce? For a completely low fee, our team of qualified financial planners can help you grow your wealth and help you get on track to a comfortable financial future. Call 1300 55 10 45 for an obligation free financial meeting with one of our financial advisers.

5. Ensure you're insured
Life insurance is unlikely to be a big priority if you don't have a family, but what would happen if you couldn't work due to injury? You probably have insurance cover as part of your super, but you should check that it's enough. It's also worth noting that income protection premiums are generally cheaper if taken out through your super, but again, make sure that it's enough and meets your requirements.

For financial advice on superannuation or insurance, speak to a financial planner at Intellichoice today on 1300 55 10 45 or visit www.intellichoice.com.au for details on the various services offered.

Cash investments popular among investors

Self managed super fund (SMSF) investors have led the market in adopting online savings accounts and term deposits with 29% per cent of self managed super assets moving to cash between 2008 and 2009 - during the GFC.

Post GFC, cash is still maintaining its popularity among some investors. A UBank survey of customers in March 2010 revealed that a third of SMSFs have more than 50% of their funds in cash.

Some of the returns available on cash rates have been quite attractive with the Reserve Bank of Australia increasing interest rates.

Planning for retirement

Working out the best way to build your nest egg for retirement is never easy, but many agree that relying on superannuation alone is not enough.

According to the Westpac ASFA Retirement Standard, a retired Australian couple needs to earn more than $51,727 a year to live 'comfortably' or more than $28,080 a year if they want to live 'modestly'.

Investing in property is one way to help fund a comfortable retirement that allows you to pursue the interests, hobbies and activities of your choosing.

Here are 5 strategies for successfully using property investment to build wealth for retirement.

1. Think long term
Retirement strategies are all about investing money wisely over many years, building wealth through compound interest and re-investment. Think long term and have a realistic game plan that has built in buffers to ensure you remain in a comfortable position in future years.

2. Aim for capital gains
It is the capital gains that make property investing so attractive for retirement, so buy your property with capital growth in mind. This means choosing a home with resale potential that is of maximum appeal to tenants. Property experts often recommend new-built family homes because they usually have fewer maintenance costs, are attractive to the ideal tenant, and are tax effective for the investor.

3. Diversify
Property should play a big part in your investment portfolio but avoid putting all your eggs in the one basket. Diversify and spread your risk among a number of different sectors including property, shares or managed funds.

4. Consider taxation laws
Rental income may be taxed at a higher rate than superannuation unless you set up your own super fund and acquire property via your fund. Seek expert advice to best understand taxation laws and make the most of superannuation concessions.

5. Start now
It's never too soon to start planning for your future. While you are still working and have equity in your home, now is the time to use property investment as a way to optimise your financial security for the time when you plan to put your feet up!

For help on planning on retirement having an income stream during retirement, speak to one of the financial planners at Intellichoice on 1300 55 10 45 or email info@intellichoice.com.au.

Term deposits outperform shares

Cash investments have delivered far better returns to investors over the last three years than the sharemarket has. The average annual rate of return over the last three years from a one year term deposit has been 5.6%. The average annual return from ASX200 companies over the last three years has been minus 6.6%. Average dividend income for shares has been between 3.4% and 5.5%, which has been offset by some large capital losses.