TPP is an optional step-up from CTP and one of the cheaper insurance policies available to car owners. TPP additionally provides compensation for any damage you cause to other people’s vehicles or property. Your own vehicle is generally not included in the deal. But some insurers may offer limited cover if you’re in an accident where an uninsured driver is at fault.
Many food movements have emerged over the years to help people eat better. There’s the slow food movement that encourages people to swap out fast food for locally grown sustainable produce. Locavores only eat products grown and produced in their vicinity.
This could be a 50km or 100km radius or even much less, as Vicki Robin suggested in her book: Blessing the hands that feed us: Lessons from a 10-Mile Diet. You’re also probably familiar with the organic movement, freeganism, and the nutraceutical movement … the list goes on and on.
Regardless of how you choose to spruce up your eating habits, you’re bound to appreciate it more if it doesn’t blow up your food budget. The good news is there are hacks, tips and tricks you can employ to eat better for less. Whether you call it thrifty eating or frugal feeding, here’s how to maintain a lightweight food bill without skimping on nutrition and taste.
When you’re at the supermarket and gliding between the aisles, these handy shopping tips will help you save more when you finally check out at the till:
When you’re tinkering in the kitchen, there are also some ideas you can use to cook on a budget:
Dining out has its own place in your social life. Instead of shunning restaurants completely, you can still give yourself a break here and there as long as you make an effort to cut back. Here’s a list of tips to help reduce the cost of eating out:
Eating better for less takes some serious dedication, and it’s sometimes a slippery slope when that pizza craving comes calling. But the journey to a healthier diet and wallet is paved by incorporating the above-mentioned tips and ideas one at a time. You may even discover more ideas to keep the ball rolling on saving more while getting quality nourishment.
So when it comes to what you buy and eat, keep avoiding consumerism traps while chasing those best-buy deals, and you’ll be good to go.
Credit cards are not the complete villains they are often painted out to be. After all, they can be great financial tools that come with bonuses, rewards points, cash backs, and credit building opportunities. But when a huge pile of credit card debt rears its ugly head, it can leave you struggling with unforgiving late fees and high interest rates.
It happens to the best of us, and there are many Aussies in the same boat. The brilliant news is, there are practical steps you can take to nuke that credit card debt and give yourself a breather. Check out our seven-point guide:
The instruction to budget has probably been shoved down your throat by every personal finance expert out there. But there’s a reason why it can’t be said enough. Creating a budget forces you to get organised. You have to put everything in black and white: How much you owe, the amount you spend, and what you need to do to change those numbers for the better.
Don’t be vague with it. Create a detailed outline with realistic goals and specific actions. If your goal is to pay down a certain amount of credit card debt within a particular period, you can decide to do so by cutting out some non-essential expenses. Scratching off pizza nights with friends could, for instance, free up the required funds.
If credit card debt is terrorising you, you probably need a more aggressive approach to get rid of it. That means bringing out the entire arsenal of debt-neutralising tools at your disposal. The list includes any extra funds you have tucked away, tax return money, side hustle earnings, yard sale profits, plus more.
Gather it all together and target it at your credit card debt. Saving for a rainy day is all well and good, but it only makes sense when you no longer have a mountain of debt that's growing by the minute.
Trying to fight an enemy on many fronts is a recipe for frustration and failure. Happily, there are two ways to face off with your credit card debt without getting overwhelmed. Pick your preference:
Debt consolidation melds all your accounts into one, so you won’t have multiple repayments and fees clamouring for your attention. You can either:
Taking two steps forward and one step back makes for slow progress. If you’re gung-ho about paying off your credit card debt once and for all, you may need to give your credit cards a very long and extended holiday.
Closing credit card accounts removes the temptation from under your nose, making your job easier. You can still keep one or two credit cards. They can be handy as long as they offer a better deal and if you can use them responsibly.
Talking to the right people can help you manage your credit card debt better. There’s your credit provider who has a vested interest in seeing you pay back what you owe. Most lenders are charitable enough to restructure your payment plan to suit you, but you have to communicate with them as soon as possible.
You can also talk to your financial planner, who can help you map out a personalised plan for clearing credit card debt so that it matches up with your bigger, long-term financial goals.
Once you start winning the war on credit card debt, keep the ball rolling. Don’t stop to pick up crazy amounts of debt in case you trigger that famous and vicious debt cycle. You’ll need your trusty budget with you at all times. Try as much as possible to stick to what it says.
This is also the best time to start building that nest egg or rainy day fund. The next time an emergency comes knocking, you’ll at least won’t have to rely on plastic money for back up.
When it comes to prize money, Aussie sports offer some of the highest payouts in the world - whether it is horse racing at the Melbourne Cup, the Australian open (of golf or tennis) or even cycling and the Tour Down Under, Australia is host to some of the biggest sports with the highest prize offerings.
Salaries and sponsorships aside, here are the Australian sporting events offering the biggest prize money.
Golf has a strong place in Australia - in particular, a golf tournament that has a long and prestigious history is the Australian Open. First played in 1904, not long after the creation of the Australian Golf Union in 1898, the tournament has been held in a number of locations throughout Australia.
The Australian Open of golf is a sporting event that sees immense competition and attracts massive audiences - as a result, prize money within the sport is significant, and tournament winners receive a hefty sum. While in 1966 the first prize of the tournament was $1600 AUD (a lot , Australian Open prize money has grown to a considerable $225,000 AUD for first place.
The Australian Open is one of the biggest tennis tournaments in the world, and the first of four grand slam tournaments held each year. First held in 1905, it is hosted in Melbourne, where top tennis players will compete for the top spot. Every year, Australian Open previews and trends aim to predict who will come out on top, with previous champions including the likes of Roy Emerson, Novak Djokovic and Serena Williams.
In addition to sponsorship money and other sources of income, Australian Open players make a significant amount in prize money - in 2021, the total prize purse is $80 million AUD, with first round qualifying prize money of $25,000 - not a bad amount just to qualify. When it comes to the winning prize, mens and womens singles winners will get just under $3 million AUD.
Next on the list is the Australian Grand Prix - held yearly in Australia, it is the second oldest racing competition in Australia that is still around, and was first run in 1928. As of 2020, it has been held across 23 locations.
As a significant racing competition, it has attracted world class racers such as Michael Schumacher and Lex Davison, and estimated audience attendance even peaked at above 500,000 people in 1995.
When it comes to prize money, teams are paid by the F1 (based on performance), and they then decide how much to pay their drivers (again based on how they perform) - for example, Lewis Hamilton earns an estimated salary of $30 million USD, in addition to win bonuses.
One of the biggest yearly sporting events in Australia is the Melbourne Cup - this is one of the most popular betting events in the country, where horse races are held throughout the day.
Whether you look at prize money or betting wins, both horses and spectators have won millions. In 2020, prize money was $8 million (received by the first 12 past the post), in addition to a $500,000 AUD winning bonus - the winner of the 2020 Melbourne world cup received $4.4 million. This money is shared by the horse owner, trainer and jockey.
When it comes to Melbourne Cup punters, 2020 saw a retired man win over $1 million AUD from a $28 dollar bet.
To wrap up this list, the Santos Tour Down Under is a cycling race located in Adelaide - established in 1999, it has already seen rapid growth and attracts top UCI teams locally and from across the world.
Based on start list quality, the Tour Down Under is, within the southern hemisphere, the highest ranked professional road cycling race, and in 2020 was won by rider Richie Porte.
In terms of prize money, 2020’s competition saw riders receive over $6000 AUD for stage wins, and the winner left with somewhere around $30,000 AUD. When you include sponsor money and other earnings, the riders make a decent amount of money over the 11 day event.
You’ve probably come to us if you’ve been wondering: “What is the personal loans application process?”
Applying for a personal loan is generally quite straightforward if you’re looking to sign up with an Australian lender or bank. This guide outlines the main steps in the application process for personal loans, to help you get the loan you’d like in a hassle-free way.
Before you can apply for a personal loan, it’s absolutely vital to do serious research into the offers around. You’ll only be able to choose the best personal loan if you’ve got a clear idea of what you’ll want to spend the money on, first up. Once you’ve got this in mind, you’ll be able to save a lot of time and make a more relevant decision. Things you’ll need to consider from here are:
The application process for your personal loan can be done many ways these days. Online is a common way to apply, as many banks and lenders offer online applications. Typically you can also apply by post and on the phone, however in all cases you will need to:
You’ll also need to provide proof of:
If you’re applying to a bank you’re not a customer of, you will typically be required to show evidence of your identity. It’s not uncommon for banks to ask for 100 points of ID in these cases.
Online applications can take several business days before you receive an approval or denial. If they send you a product disclosure statement, you should check this thoroughly. You might also be requested to give further evidence so the bank or lender has everything on hand. Here again you may need to provide proof of income, identity and evidence of other debts you might have.
Almost there! If your personal loan application has received approval then all you need to do is wait for the bank to email or post you your contract. Once you’ve returned a signed copy of this to your lender, it should only be a matter of 24 hours or so before it’s approved. When this happens, your loan application has officially been accepted.
Your personal loan should now be available as soon as they are “drawn down” into your bank account. So yes, you can spend it!
If your lender or bank is deviating significantly from the steps we’ve outlined, or if they haven’t been 100% transparent and things seem a little dodgy, please stop your application process. You can check for free whether everything is as it seems or otherwise with the Credit and Investment Ombudsman or Australian Financial Ombudsman Service. These services are designed to help ensure that loans and all the procedures involved are following regulations, and also settle disputes between clients and their lenders.
With the recent federal budget released this week in the Australian market, we decided to share some key comments from Australian companies and break down some highlights from the budget.
Some key points from the budget were as follows:
Business Owners had the following to say about the budget this year:
“It is good that the government is providing extra support in this budget for first home buyers. That said, first time home buyers must be attentive when applying for a home loan. Start with checking your credit score and credit report so you’re aware of what the banks and lenders will see as these may be considered in your application.
After all, a rejected home loan application or multiple applications can impact your credit score and financial profile”
Lloyd Smith – General Manager at Clearscore
“We welcome the government to continue to focus on investing in the child care sector to help alleviate the growing cost of living pressures. We see investing in child care as a win-win policy for children, the workforce and the economy.”
Winfrey Dai – Director at Raising Stars
“This scheme will see the deposit required to buy a home reduced to just 5% – and the government guaranteeing the other 15%. This will be of great assistance to young people trying to get into market regional areas and single parents. The major benefit is it will allow those borrowers who participate to avoid paying tens of thousands of dollars in lenders’ mortgage insurance.
We know that many Australians pay LMI due to borrowers having a deposit of less than 20%. With the average house price in Australia’s capital cities exceeding $1 million, it’s great to see the Morrison Government helping keep the Australian dream of owning a home alive.”
Carl Hammerschmidt – CEO of Joust
“During the pandemic, revenue has been incredibly volatile with significant declines during lockdowns followed by steep increases afterwards. As a small business, Larsen Jewellery will benefit from the ability to calculate PAYG instalments based on financial performance, and thereby avoid overpayments during the down periods.
In addition, like many family-owned businesses, Larsen Jewellery is owned through a discretionary trust and will therefore benefit from being able to lodge its income tax returns electronically.
As a small and growing Australian business, any assistance that we receive in the federal budget is greatly appreciated after what has been two very difficult years.”
Lars Larsen – Director of Larsen Jewellery
“We welcome anything that supports affordability. High petrol prices are just one of many factors squeezing consumers like the limited supply and soaring prices of vehicles.”
Shaun Janks – Co-Founder & Chief at DingGo
The spending and borrowing habits of Australians nationally has drastically changed during Covid-19 lockdowns. Not only have Australians had to switch up their lifestyle but also have to consider their financial habits and how they spend their money significantly.
Based on information from ClearScore’s yearly analysis, we can begin to understand how loan repayment trends, financial habits and credit scores have been affected during COVID-19 in 2020 and 2021.
Typically, a credit score is a number between 0 to 1000 that represents the creditworthiness of an individual. The calculation of a credit score is based on the credit reports of a consumer including payment history, credit enquiries and loans. In Australia, you can find your credit reports at ClearScore, Equifax, Experian, and Illion.
This score will place a consumer into a credit category and will determine their eligibility to access a loan or credit and the ease of this process.
Simply, the higher the credit score of a consumer the more likely they will qualify for more financial products at a lower interest rate.
Over the last year, Australians have seen an improvement in their credit scores due to reduced missed bill payments. This could be due to a multitude of factors including:
Interestingly, consumers with lower credit scores have seen the most dramatic improvements over the last year.
The improvement in credit score can also be attributed to the past 12 months of Covid-19 lockdowns as Covid has put pressure on the financial habits of consumers. A decrease in spending and borrowing comes with a decreased chance of missed payments on loans and results in an improved credit score.
Specifically, one of the most common reasons for a poor credit score is a consumer having a default on a loan. During the last 12 months, there has been a reduction in loan defaults for all consumers but most notably ‘Poor’ credit score classified consumers which has resulted in a greatly improved credit score for this category.
An important aspect to note here is that although ‘Poor’ credit score category consumers have seen an increase over the last year, their current financial situation (with the exception of credit reports) is not taken into account.
The Covid-19 lockdowns have affected each state across Australia differently. However, the average credit score of consumers in New South Wales, Queensland, Victoria, South Australia and Western Australia have all increased by at least 18 points.
Although this may look positive, Australians nationwide have found the most recent lockdowns extremely financially tough.
Lockdowns across Australia have not greatly impacted the unemployment rate in Australia, however, lockdowns are wreaking havoc on the current economy. As Australians struggle with their finances, a high credit score may be the only thing keeping them afloat.
A credit score band or category is also an indicator of how much Covid-19 is impacting different groups. Consumers with the lowest scores are more likely to experience a negative impact on their finances than those with the best credit scores as they usually have less disposable income.
Consumers in the lowest credit score band are more susceptible to financial fluctuations and can struggle to make payments for credit on time while higher credit score band individuals are the opposite. This is another reason why Covid-19 has assisted some lower band consumers who have seen their credit score rise as they have become more frugal with their finances.
Buy Now, Pay Later (BNPL) options have now become extremely popular amongst consumers as this may be the only option for them to buy products online. This is another major development for consumer habits as BNPL has become a lifeline for many during the financial stress of Covid-19.
The Buy Now Pay Later option has been a great help to consumers during Covid-19 as these credit options are not regulated as consumer credit and almost anyone can get credit on a BNPL. This has resulted in consumers with a lower credit score and income, who were shut out of getting access to loans and credit cards, finally having access to funds during challenging Covid-19 conditions.
The recent explosion of BNPL has resulted in many retailers partnering with different providers meaning that many consumers have more than one BNPL account. This also allows consumers to spread their spending and borrowing habits across multiple options, although it can become tricky when assessing multiple credit payments.
Open Banking has been launched in Australia during the Covid-19 pandemic with the promise to provide Australians with access to better financial deals. The process involves sharing your banking data (including mortgage, credit card, saving and personal loan information) with third parties to get better-suited banking products or switch your current bank with ease.
Australians are still relatively new to the concept of Open Banking with 12% of ClearScore users being aware of what Open Banking was according to their survey in September 2021. However, once these respondents had knowledge of these options, just over half (56%) said that they would give Open Banking access to allow their income to be verified for the purpose of applying for loans.
Australians are willing to experiment with Open Banking across every state to varying degrees. However, one of the biggest differences in willingness to share data was based on credit score band. This is because consumers who are not able to access credit easily are much more likely to share bank data to get a loan. This is perfect for consumers who are struggling to get on their feet without financial assistance and who need a loan for financial stability in trying times such as Covid-19.
Missed a loan repayment or struggling to repay a loan? Find out what the consequences could be and what you can do for damage control.
When you miss a repayment for your loan, the seriousness of the situation depends on how quickly you solve the issue. Once your lender notices your missed payment, they will reach out to you (if you haven’t already reached out).
It’s best to talk to them and discuss a way forward. Generally, you have 14 days to resolve the matter before incurring penalties.
Based on information from the Australian Government, a loan payment is considered late when it’s more than 14 days past the due date. At this point, the lender is allowed to list the missed payment on your credit report without giving you written notice. Once it’s on your credit report, the listing can remain there for two years.
The lender can only list your missed payment as a default under the following circumstances:
The only way you can escape a default listing under these circumstances is when the lender mistakenly sends the notices to a different physical or email address other than the last known address you provided them. Also, once the second written notice is sent, the lender can’t wait more than three months to list the default.
It’s best to act before the credit provider lists negative information on your credit report. You can:
However, once the credit provider makes a negative listing on your credit report, the only way forward is to maintain positive financial behaviour. This will eventually improve your credit score.
Your personal finances are ever-evolving, so you need a reliable way of tracking your income vs expenses. Here are some money tracking tips to help you stay on track with your financial goals.
Before you can figure out where you would like your money to go, you need to find out where it’s currently going. That means diving at least three months back into your financial history and checking your bank and credit card statements. Also, it’s important to list all your income sources and monthly expenses to get a better sense of your net worth and money habits.
For instance, you can list your salary and other extra dollars you make under income. Your expenses can range anywhere from utility bills and insurance premiums to car payments and rent. Once you have every dollar accounted for, you’ll now be ready to restructure your budget, so it aligns with your financial goals.
Refining your budget should be a continuous process if you want to effectively keep track of your personal finances. A budget that worked for you last year might not be ideal this year. Therefore, reviewing your budget periodically helps you keep up with the financial ups and downs of life.
For instance, if there’s suddenly less room in your budget, you may find out it’s because of a one-time expense that happened because of an emergency. In that case, you might figure out it’s best to have an emergency fund for that sort of thing.
Similarly, you may suddenly find yourself with a surplus after receiving a bonus at work. You can then decide to allocate it towards savings instead of spending it on non-essentials. Overall, you’re more likely to make wiser decisions with your money if you review your budget regularly.
Your budget probably caters to a wide range of expenses, whether fixed or variable, and keeping track of it all can be a hassle. However, capturing your expenses on the go and categorizing everything can help simplify matters.
To begin with, recording your expenses in real-time ensures you don’t overlook those small expenses that quickly add up – like your morning coffee. This may involve saving receipts or getting notifications to your phone every time you make your purchase. Additionally, grouping expenses makes it easier to run over everything when determining if you’re staying on track with your budget.
You can find free budgeting software and personal finance apps designed to help you track your money. Some paid apps may even be worth the cost if they help you save time, effort, and money. Depending on your needs, you can settle for an app that does the following:
While tracking your personal finances is beneficial, it’s also important to realize that it doesn’t have to consume a big chunk of your time. For instance, if logging all your expenses into an app daily is not your thing, you can still stay on track with a simple spreadsheet that you only update once a week. The important thing is to remain consistent and disciplined, and your money-tracking efforts will pay off sooner or later.
As you can see, tracking your money and eliminating bad money habits isn’t rocket science. But, be sure to combine these helpful tips with action to ensure the financial progress you want to achieve.
Sure, getting your loan application rejected can be a downer. But most lenders review these applications by the book, and if they find something amiss, it’s nothing personal. Some lenders even use an automated system for this process.
So, whether it’s a personal loan, car loan, student loan, or any kind of loan, here’s how to tick the right boxes that turn a no into a yes.
Understanding how lenders think is crucial to getting on their good side. This can be tricky since many factors come into play when lenders decide whether to offer you credit. The good news is, they usually tell you why you didn’t get their green light.
Still, it’s a good idea to be aware of all factors that might trigger a rejection, so you not only avoid making the same mistake twice but also steer clear of other reasons for rejections.
Your credit report contains both negative and positive information about your borrowing behaviour. Your credit score is a direct result of this information, and if it’s too low, most lenders will consider it a red flag. That’s because a bad credit score commonly results from the following negative information:
Lenders will also consider you risky if you’re a new borrower with insufficient information in your credit report. Your credit score will automatically be lower since there’s no way to determine if you’re a responsible borrower.
Lenders have to do their due diligence when handing out loans. Keep in mind, they’re running a business, and profits happen only when you pay back what you owe. That’s why the following signs can make a lender think once or twice about your capacity to service the loan:
Eligibility requirements vary by lender. Sometimes you’re denied credit simply because you’re borrowing to purchase a business vehicle when the loan is for personal use only. Other times it’s because of your age, citizenship status, residency stability, or incomplete information on your application form.
A rejected application stings, but it may also leave you wondering if there’s any damage done to your credit score. The truth is, the denial doesn’t hurt your credit score, but the application that caused it might.
That’s because the lender would have checked your credit score, and this enquiry is recorded in your credit report. Fortunately, a hard credit check only knocks off a few credit score points, and you can repair this easily as long as you avoid making too many applications.
In any case, the enquiry is the only thing that shows up on your credit report, not the denial.
You may still need credit approval soon after a rejected application. These short-term strategies may help turn things around for you.
This is always a top recommendation for improving your chances of loan approval. Things like incorrect listings, computer errors, and out-of-date information can negatively impact your credit score. You can fix these mishaps by contacting the credit bureau that reported the information and asking for a re-scoring. In Australia, you can get copies of your credit reports from Equifax, Experian, and Illion.
If one lender is not your cup of tea, many other Aussie lenders may be able to help you. For instance, while some financial institutions don’t offer bad credit loans, others specialise in providing credit to borrowers with bad and fair credit.
You may also be able to prequalify, meaning you’ll know details such as loan amount and interest rate, before accepting the loan. What’s more, prequalifying usually involves a soft credit check that won’t impact your credit score.
Overall, it’s essential to do your homework and even get in touch with the lender before applying to ensure you’re on the same page.
Online loan comparison websites usually have information on many traditional banks, credit unions, and online lenders. This makes it easier to find a credit provider that’s more suited to your situation.
A secured loan reduces the lender’s risk since it requires collateral the lender can hold on to if you default. Collateral can be your car, savings account, or other valuable property. Besides improving your chances of approval, secured car loans and secured personal loans also offer a lower rate and the flexibility to borrow more.
If you’re not eligible for a loan, for some reason such as bad credit or being under age, a co-signer with better qualifications might help. This person will agree to cover your repayments if you default, thereby reducing the lender’s risk. Keep in mind that co-signed loans are different from joint applications, which require both applicants to be eligible for the loan.
Choosing an affordable loan also increases your odds of approval. That’s why a personal loan calculator and car loan calculator are handy tools to use before applying. If you’re financing a car, a down payment or balloon payment can also help you reduce the amount you have to borrow.
Becoming an ideal borrower takes time. However, using the following strategies is well worth it if it helps you avoid rejected applications down the line.
Boosting your credit score is mostly a matter of paying down existing or current debts and making repayments on time. Things like paying off your credit card debt can lower your credit utilization rate and debt to income ratio, which are all great signs of a responsible borrower.
Increasing your earnings via a side hustle or job upgrade helps you qualify for better loans, though it’s not always possible. However, you can still use your current income to create more savings. The more cash reserves you have, the more creditworthy you become, especially if you use the cash reserves to secure the loan.
If your loan application is rejected and you still need the money, you may want to keep applying until a yes comes your way. But as mentioned earlier, loan applications beget hard enquiries. These may have a big, negative impact on your credit score once they pile up.
There’s much you can do to improve the situation when your loan application is rejected. Use the short-term and long-term tactics outlined above to boost your credit score and become the ideal borrower. One last word of advice: Talking to a financial counsellor helps if your finances are stopping you from borrowing money when you need to.
If you’re buying a car and financing the purchase, it’s much less stressful with a pre-approved car loan. Here’s all you need to know about this highly recommended auto loan feature.
Car loan pre-approval means you can apply for finance before you shop for your new ride. The lender then tells you how much money you qualify for, plus other important related information. This allows you to find a car that suits the loan rather than the other way around. So, how is this a game-changer?
It’s no secret that shopping for a car with cash on hand means you have more power to negotiate. While a pre-approved car loan isn’t the same as hard currency, it’s the next best thing to have when faced with an ambitious salesperson.
In a nutshell, getting pre-approved for a car loan means you can benefit from the following:
You can get a pre-approved car loan from most Aussie lenders with these few simple steps:
Australians can look up their credit report for free once a year via sites like My Credit File. When you apply for a car loan, the lender will also access the same information. If you get your hands on your credit report first, you can fix any incorrect listings that might hold your application back or net you a higher interest rate.
This is done by contacting the relevant credit reporting agency, so they can investigate any issues and update your information.
It’s important to compare factors like interest rates, fees, loan terms, and borrowing limits. Using an online car finance comparison website can help you streamline this process. You’ll be able to find banks, credit unions, and online lenders that offer car loan pre-approval in one place.
Remember, not all Australian lenders offer pre-approval, so confirm with the lender before applying.
If you aren’t using the car to secure the loan, you can also compare unsecured personal loans. Although you may not get the most competitive rate or borrow as much as you like, this loan type may have a faster turnaround.
Credit approval is conditional on whether you meet the lender’s requirements. Generally, here’s what you need to present your best face forward when borrowing:
Some lenders let you pre-qualify without carrying out a hard credit check. This allows you to apply for multiple offers without it affecting your credit score. Even when you go car shopping, having more finance options also provides more flexibility, whether you’re buying from a private seller, car dealership, or auction.
Since pre-approvals can take as long as three months to expire, you’ll have ample time to explore your car buying options.
Pre-approval isn’t a guarantee that you’ll get finance for your car. It only confirms that you’re eligible for the loan. After finding the vehicle you want to purchase, you’ll still have to contact the lender to get final approval. They’ll want additional details about you, the car, and the seller before they can process the transfer.
However, the lender reserves the right to deny you credit if your circumstances have changed significantly after the application. For instance, if your income or credit score has reduced drastically, they may doubt your ability to service the loan. In the same vein, you’re also not obligated to finalise the application when offered pre-approval.
Taking out a loan can send out ripples that affect not only your personal finances but also your credit score. Whether that’s a good or bad thing depends on your ability to service the loan, plus other factors. Here are some borrowing dos and don’ts related to your credit score to help you stay on track with your financial goals.
Taking out a loan affects your credit score in various ways. Generally, the impact is initially negative because the lender will do a hard credit pull when you apply. That means the lender combs through your credit report to figure out the risk you pose as a borrower.
This enquiry gets recorded on your credit report, and each time there’s an enquiry, your score drops by a few points.
However, it can quickly bounce back once you start paying off your debt as agreed. In Australia, credit bureaus like Experian and Equifax mainly use the following factors in their credit scoring models:
Keep in mind you may have different credit scores depending on which credit scoring model is used.
Your personal finances are defined by various factors and behaviours, but not all will affect your credit score. Take the following factors, for instance:
Here’s how you can use a loan to push your rating up:
Debt consolidation loans are handy financial products that help you get rid of multiple credit accounts. In a nutshell, consolidating your debts makes your repayments more manageable, and this can improve your payment history as long as you avoid taking on extra debt you can’t afford.
If you already have other credit accounts, taking out a new type of loan helps boost your credit score. For instance, if you already have several credit cards, a mortgage, and an auto loan, adding a personal loan diversifies your credit mix and shows you can responsibly handle various kinds of credit.
After shopping and applying for the right loan, you must honour the due dates of your repayments. That’s because having a positive payment history is one of the top ways to build your credit score. To make life easier, you can opt for automatic repayments and choose a repayment frequency that matches your cash flow, whether that’s weekly, fortnightly, or monthly.
As mentioned before, your loan applications generate hard enquiries, which are recorded on your credit report. While a single application won’t affect your credit score by much, several applications in a short time can significantly lower your credit score.
Additionally, enquiries can stay on your credit report for years. Too many enquiries increase the risk you pose to the lender, which lowers your chances of approval or getting a good deal.
It’s true that you have to borrow and diversify your credit score to build a good rating. However, it’s best not to borrow solely for this reason. Instead, first consider if borrowing is necessary and if it is, be sure to borrow an amount that matches your budget. Borrowing more than you can afford may end up denting your credit score if you default or miss payments.
Top tip: You can use BestFind’s personal loan calculator or car loan calculator to find affordable repayment estimates before committing to a loan.
Revolving credit includes credit cards and personal lines of credit. It’s best to keep the balances on these accounts below 25% or 30% of your limit to keep your credit utilization rate low. If you have used up most of your available credit, it means your required monthly repayments are higher, and your credit score will likely drop. In short, a high revolving total indicates risky borrowing behaviour.
Will taking out a loan upgrade or downgrade your credit score? To summarize, your credit score represents the information in your credit report. Things like too many hard enquiries and missed payments will negatively affect your credit score.
On the other hand, sticking to your repayment schedule and clearing some of your debt can boost your score. But with so many factors in the mix, how much a personal loan affects your credit score all boils down to your circumstances and borrowing behaviour.
The good news is, you can use the information in this article to make sure that taking out a personal loan only affects your credit score positively in the long run.
Planning for a rainy day is important, and part of that includes having the right car insurance. After all, a wrecked car shouldn’t mean a wrecked budget. So, whether you need coverage for your dream car or the precursor to your dream car, here’s what you need to know when choosing a car insurance that’s best for you.
CTP, also known as green slip insurance, is a bare-bones option, and as the name suggests, it’s mandatory for all registered vehicles. It provides compensation for any people you kill or injure in a car accident. In Australia, the specific details associated with your CTP insurance may vary from state to state.
For instance, CTP is an inbuilt feature of car registrations in most states. However, you have to purchase it separately if you’re in NSW. Factors like fault, liability, and requirements for vehicle safety also vary between states. However, CTP generally doesn’t cover vehicle theft and damage.
This is simply Third Party Property Insurance with added fire and theft coverage. The extra coverage comes at an additional cost, but remember, things like damage from vandalism are still not included.
Comprehensive insurance covers everything that’s covered by other types of policies, plus more. For instance, it provides compensation for damage to your vehicle, whether or not it’s your fault. The specifics of what’s included in the policy depend on the insurer. For instance, some policies don’t cover your car’s contents.
Other policies offer options with bells and whistles like roadside assistance and car hire, so it pays to shop around. While it’s true that comprehensive insurance is the most expensive car insurance, the extra value you get is generally well worth the monthly price tag.
In any case, here’s a quick outline of the different vehicle insurance options as outlined above:
This depends on the car’s value and your overall financial circumstances. For instance, comprehensive vehicle insurance may not be worth it if you’re currently driving a cheaper car. On the other hand, it’s a requirement of secured car loans. In most cases, any policy that’s a step above Compulsory Thirty Party Insurance is a safer bet.
Therefore, when buying a car, it’s important to keep coverage in mind. Things like the car model, its appeal, or even colour can affect the type of insurance you’ll need.
If you want coverage for your vehicle, you’re looking at either fire and theft insurance or comprehensive insurance. Insuring your car for an agreed value means you’ll receive a specific amount if the vehicle is a write-off. But if you insure the car for market value, you get whatever amount equals its value when the accident occurs.
The excess is the amount you have to pay to settle your claim. While a higher excess results in a low premium, it also means paying significantly more per claim. Also, consider the limit, which is the maximum amount the insurer is willing to pay per covered claim.
Vehicle insurance typically includes all sorts of discounts. These include:
An affordable premium rate is always a prerequisite when choosing car insurance. Generally, your premium is affected by factors like your age, credit score, driving history, state of residence, and the car you drive. Still, you’ll find that different insurers may provide you with quoted rates that are significantly different. That’s why shopping around and getting at least three quotes before settling is a big deal. In any case, you can also make your premiums more affordable by:
Check if you can get optional extras like:
Insurers have different terms and conditions attached to their products. It’s best to find a company that matches your circumstances and offers better coverage for the type of car you drive.
Also, look for a car insurance company with a good reputation built on great customer service and fast responses when settling and filing claims. Checking online reviews from genuine customers can help you in this regard.
Choosing a car insurance with adequate and reliable insurance is essential for any car owner with an ounce of self preservation and the desire for a good night’s sleep. Whether you’re new to the scene or simply looking for a better deal when renewing, it’s essential to do your due diligence, so you can find a package that suits your budget, preferences, and needs.
A personal loan can provide the financial support you need to meet your goals sooner. Whether you’re planning to buy a car, renovate your home, or consolidate debt, here’s what it takes to get a personal loan in Australia.
Before you narrow it down to one option, make things easier by first choosing a loan type. This ensures you only compare “apples to apples.”
For instance, personal loans can be variable rate or fixed rate. They can also be secured or unsecured. Therefore, it’s smarter to compare these loan types separately since they have different features.
If you’re using a loan comparison website like BestFind to shop for a personal loan in Australia, you can apply the filter function. This ensures you’re not comparing “apples to oranges.” You can also read up on the different personal loan types before deciding on the best fit.
Shopping for a personal loan shouldn’t be a rush job or a first come, first served affair. Instead, you should carefully consider factors like:
This is not an exhaustive list by any means. Other features to look out for include pre-qualification options. Also, check if you can make additional repayments, redraw funds, or pay off the debt early.
It’s true that personal loans can help you achieve things sooner. But, remember to only borrow what you can afford. A personal loan calculator is a great and convenient tool for figuring out the loan amount that best suits your income and budget.
For instance, you can use BestFind’s personal loan calculator. Simply input your preferred amount and term to get a quick repayment estimate.
Generally, a longer term gives you smaller repayments and vice versa. However, extending your term means you pay more interest and fees in the long run.
Australian personal loan lenders usually have the following requirements:
If you need a personal loan ASAP, an online application can help speed things up. It also has the added advantage of allowing you to apply anytime from anywhere. Once you pick a lender and a product, you can apply through BestFind by clicking “Go to Site” in our comparison table.
How long the application process takes depends on the lender you pick. Generally, it takes about 10 to 20 minutes to complete and submit the application form. In some instances, you may have to finalise the process by uploading documents online. Or, you can visit the lender’s nearest branch office.
If your application is successful, you’ll get a loan contract, which you then sign and return. The last step is getting the money, and this can take anywhere from a few hours to several business days.
Important tip to remember: Be sure to read the fine print carefully before agreeing to the lender’s terms and conditions.
A personal loan is just about handy for anything: debt consolidation, holidays, weddings, home renovations – you name it. But can you use a personal loan to buy a car? The quick and short answer is yes. Keep reading to find a detailed explanation on how to finance your next set of wheels via a personal loan.
When choosing a personal loan that best suits your car buying needs, you’ll first need to decide on a loan type. Typically, you can choose from the following personal loans:
Don’t just settle for the first offer that catches your fancy. Comb through the available options to find the lowest rate you can get with your current credit score.
Compare fees and charges plus other factors like repayment frequency, amounts, and terms. Look for lenders that give you a loan quote or rate estimate before you apply. Generally, this won’t affect your credit score since the lender doesn’t do a hard credit check.
In some cases, you have to shop for a vehicle before applying. However, pre-approval allows you to shop around with more confidence since you already know how much money you have on hand. This confidence can also boost your negotiating skills, helping you to get the best price.
You can use BestFind’s car loan calculator to narrow down an affordable loan amount and repayment. Considering that personal loans have terms of up to seven years, this is an essential step that helps you avoid long-term financial repercussions.
Nowadays, you can apply for most loans online. With BestFind, it’s as easy as clicking “Go to Site” for the lender you want in our comparison table. Generally, you have to be at least 18 years old and an Australian permanent resident to qualify. Additionally, you must have a regular income and a good credit record.
Lenders may ask for supporting documents, such as your ID, payslips, bank statements, or proof of residence. If the application gets approved, the next thing is accepting the offer and then receiving the funds in your bank account.
This is always the thrilling part. Your options here include buying at an auction, car dealership, or from a private seller. Buying from a dealership guarantees more options and the benefit of a warranty. In contrast, buying from a private seller is riskier, and you’ll need to carry out a thorough inspection to ensure you’re getting a quality and reliable vehicle.
Here’s an interesting fact: Most Australian lenders have consolidated their personal loans with their car loans, so you may find there’s hardly any difference between the two. However, strictly speaking, most personal loans are unsecured, while you’ll find that most car loans use the car you’re buying as security for the loan.
As a result, secured car loans have lower rates than unsecured personal loans. Also, some lenders design their car loans so they are only suitable for purchasing motor vehicles, such as cars, boats, caravans, and motorbikes.
Electric car sales are yet to top the charts in Australia. However, this will likely change as the technology catches on and the world becomes more green conscious.
According to an Australian Electric Vehicle Market Study, the number of EVs cruising the roads should match the abundance of internal combustion engine vehicles once cheaper models are rolled out.
With this information, you may wonder whether to be a pioneer owner of an EV or wait until they are selling like hotcakes. Here’s what you need to consider before deciding.
An electric vehicle can be powered by electricity rather than liquid fuel. Currently, there are two main types of EVs on the market.
As the name implies, this type of car is powered only by electricity. All-electric vehicles or AEVS include battery electric vehicles and fuel cell electric vehicles. Both types have to be plugged into an off-board electric power source to recharge.
BEVs use battery packs, while FCEVs use fuel cells to power their electric motors. AEVs also generate electricity using the braking system, a process known as regenerative braking.
HEVs use both liquid fuel and electricity to power themselves. That means, unlike AEVs, they also have a traditional internal combustion engine that runs on petrol. The electric energy is produced via regenerative braking, which uses the car’s braking system. During this process, some of the energy that usually converts to heat when the vehicle slows down converts to electricity instead.
Another type of HEV called the plug-in hybrid electric vehicle or PHEV can be plugged into an external electrical charging system. You may also come across the term “extended-range electric vehicle.” It applies to HEVs that use the petrol engine to boost the car’s range by recharging the battery as it depletes.
There’s a great case to be made for buying, owning, and driving an EV:
EVs may not be the ultimate solution to getting rid of emissions, but they are a step in the right direction. Even though electricity generation produces some emissions, EVs can still reduce emissions by as much as 70%. As a result, many environmentally friendly individuals and institutions are encouraging the sale of EVs.
Some banks and financial institutions even offer green loans with interest rate discounts as an incentive.
There’s a lot to rave about when it comes to EVs.
Although they’re expensive, EVs deliver more bang for your buck in the long run. Considering that petrol prices have been on a steady climb in recent years, EV drivers will certainly appreciate the lower costs of plugging into the electric grid.
EVs also require less maintenance. For instance, you don’t have to worry about oil changes. And not only do you take fewer trips to the mechanic, but you also spend less time refueling.
The number of EV models available on the Australian market is slowly spiking. That means you’ll soon be able to find EVs for any purpose, be it a family road trip or a fun sports drive. As the range of EVs widens to suit different driving needs, EVs will become a popular means of transport. Why not jump on the trend early and stay a step ahead of the crowd?
The major downsides to buying an electric car appear to be the price and lack of charging infrastructure.
Currently, there’s a large disparity between the cost of EVs and their petrol-powered counterparts. While EVs may be cheaper to run, initial costs remain a barrier. Also, things like insurance, home EV charger installation, and battery pack replacement can make the prospect of buying an EV even more daunting for your wallet.
How far will an EV take you on a single charge? Range can be a common source of worry to would-be EV buyers. However, it’s not much of a downside if you’ll be using the car for short-distance commutes – most EVs are more than up for the job.
But if you are planning a long road trip, with infrequent gaps in-between, it’s probably best to bring a petrol-powered car or at the very least buy a hybrid EV.
You can recharge an EV by either plugging in at home or using a public DC fast charger. The first option usually requires leaving your car to charge overnight. But a public DC fast charger can have your car up and running in less than an hour.
While this is handy, this type of public charger is not found in every location, and you might have to wait your turn or pay a fee to access the nearest one. Home EV chargers are also expensive to install, so be sure to explore all your options to see if you’ll be able to recharge your car conveniently.
The matter of whether to buy an electric vehicle is a question of when not if. EVs are the cars of the future, and as the world accelerates into that future, Aussies should be ready to climb on board. That’s the big picture.
Looking at the smaller picture, there may be valid reasons for holding off an EV purchase. For instance, you may not wish to strain your wallet or go out of your way to find charging stations. But if you find some good deals, and can afford to splurge on one, or have access to plenty of charging stations, buying an EV will help you move along with the times.
To help you make a smarter choice, you can use the Australian Government’s Electric Vehicle Guide, which compares electric vehicles currently on the market.
Recently, the process of budgeting has evolved from the pen, paper, and calculator combo to something more sophisticated due to the use of budgeting software or apps.
Such software takes the basic process of budgeting up a notch making it easier and more convenient to take charge of your financial life. But with so many budgeting apps floating around, there are a few things to consider when choosing what works best for your needs.
Keeping an eye on your finances and tracking expenditures can be a hassle, especially if you’re not a number’s person. Happily, personal finance apps can do the heavy lifting by organizing and regulating your finances, so it’s easier to stick to your budget and financial goals.
Your typical, everyday personal finance app can help you:
Generally, the term “personal finance app” encompasses an assorted number of applications that perform various money management functions. Budgeting software or apps, in particular, mainly focus on tracking your spending and categorizing your expenses. Some budgeting apps, however, have extra features and functions to offer.
Most money problems can often be traced back to a faulty budgeting system. Therefore, deciding which budgeting app to use requires some serious thought. It’s the difference between financial glitches down the road and a more manageable financial life.
That being said, choosing the right budgeting software for you depends on your money goals and habits. So keep the following factors on your checklist when shopping for budgeting software for regular use:
What’s the personal finance app designed for? Make sure its functions are centered on budgeting instead of investing or saving, for instance. A particular app can have great features, but if it can’t generate an automated budget plan or customised report, it may be a dud.
Here are some handy budgeting app features to look out for, including the bells and whistles:
The right budgeting software should be compatible with your favourite devices (smartphones, tablets, and laptops) whether you use an IOS, Android, Windows, or Mac operating system.
Anything that requires manual entry can be a chore, plus it’s also important that the app integrate or sync automatically with your financial accounts to ensure you’re working with accurate and up-to-date info.
Even when you switch between devices, your budgeting app should be accessible anytime, wherever you are.
There’s no shortage of free budgeting apps, but you may need to factor in pricing if you want an app with premium features and no ads. The decision to pay a subscription fee hinges on how useful the app is and whether it brings any monetary gains.
If the premium version saves you hundreds of dollars or hours in the long run, then it’s well worth it. But if you only ever use the basic features, you’re better off using the free version. Another great way to save on budgeting apps while getting the most benefits is to sign up for free trials.
Cybersecurity is a critical factor when it comes to personal finance apps. To avoid threats to your financial accounts and unauthorised access to your private information, look out for security features like:
Also, make a point to read the app’s privacy or security policy and avoid giving apps direct control over your bank account.
Navigating the app should be a breeze. If you can’t understand how the app fully works, then that app may be useless to you, even when it has fancy and impressive tools. However, if the app is great but a little tricky for beginners, ensure you have access to good customer service and tech support.
You can also check for things like a comprehensive FAQ page and a well-explained user guide.
Popular apps are favoured by many for a reason. Before downloading a budgeting app (this goes for any app, really), read as many reviews related to that app as possible. Overall, looking for a well-reviewed, researched, and tested budgeting app from a reputable and reliable company will steer you in the right direction.
In Australia, many banks, including the “big four” and other financial institutions, offer their own budgeting software to customers. However, mobile banking apps perform functions that are slightly different from budgeting apps. These functions include:
If you’re taking your budgeting journey seriously, you’ll find that, generally, budgeting apps hit the nail more on the head than mobile banking apps. The good news is you don’t have to pick one over the other. Since it’s possible to link most budgeting apps to your bank account, this can unlock more beneficial features for you.
The best budgeting software and apps can help you navigate your finances without getting bogged down in numbers. You don’t have to be stuck in accounting hell once you use the tips mentioned in this article to find a great budgeting app that caters to your preferences and financial needs.
Keep in mind there’s no limit in terms of features that make budgeting software more appealing and effective. There are always extra features to look out for. For instance, some apps include free credit score reports, while others allow you to calculate your net worth and use investment tools.
One last thing: Once you’ve downloaded the app of your choice, be sure to use it every day if possible. Make it a habit, and you’ll hopefully end up in money management heaven and at the end of the tunnel to your financial goals.
Gather it all together and target it at your credit card debt. Saving for a rainy day is all well and good, but it only makes sense when you no longer have a mountain of debt that’s growing by the minute.
When it comes to prize money, Aussie sports offer some of the highest payouts in the world – whether it is horse racing at the Melbourne Cup, the Australian open (of golf or tennis) or even cycling and the Tour Down Under, Australia is host to some of the biggest sports with the highest prize offerings.
Golf has a strong place in Australia – in particular, a golf tournament that has a long and prestigious history is the Australian Open. First played in 1904, not long after the creation of the Australian Golf Union in 1898, the tournament has been held in a number of locations throughout Australia.
The Australian Open of golf is a sporting event that sees immense competition and attracts massive audiences – as a result, prize money within the sport is significant, and tournament winners receive a hefty sum. While in 1966 the first prize of the tournament was $1600 AUD (a lot , Australian Open prize money has grown to a considerable $225,000 AUD for first place.
In addition to sponsorship money and other sources of income, Australian Open players make a significant amount in prize money – in 2021, the total prize purse is $80 million AUD, with first round qualifying prize money of $25,000 – not a bad amount just to qualify. When it comes to the winning prize, mens and womens singles winners will get just under $3 million AUD.
Next on the list is the Australian Grand Prix – held yearly in Australia, it is the second oldest racing competition in Australia that is still around, and was first run in 1928. As of 2020, it has been held across 23 locations.
When it comes to prize money, teams are paid by the F1 (based on performance), and they then decide how much to pay their drivers (again based on how they perform) – for example, Lewis Hamilton earns an estimated salary of $30 million USD, in addition to win bonuses.
One of the biggest yearly sporting events in Australia is the Melbourne Cup – this is one of the most popular betting events in the country, where horse races are held throughout the day.
Whether you look at prize money or betting wins, both horses and spectators have won millions. In 2020, prize money was $8 million (received by the first 12 past the post), in addition to a $500,000 AUD winning bonus – the winner of the 2020 Melbourne world cup received $4.4 million. This money is shared by the horse owner, trainer and jockey.
To wrap up this list, the Santos Tour Down Under is a cycling race located in Adelaide – established in 1999, it has already seen rapid growth and attracts top UCI teams locally and from across the world.
If you need cash, taking out a personal loan might be the answer. This type of loan can fund you with hundreds or thousands of dollars. Moreover, you are usually given one to five years (or even more) to pay back the loan in full.
Personal loans usually don’t have any restrictions on how you will use the money. That is why they are known to be the funding option you can go to for almost any purpose. Furthermore, a personal loan can be the best option when it comes to your unexpected expenses.
The following are the types of personal loans you should know about:
Under secured personal loans, lenders will require you to put up a valuable item to secure the personal loan you are trying to get. It can either be your savings account, house, or car. Furthermore, if you fail to pay back the loan, the lender has the right to take away what you pledged as collateral.
Secured personal loans usually come with lower interest rates because of the collateral requirement. However, this is not true when it comes to car title loans and payday loans. These types of loans typically offer higher interest rates and fees.
Unsecured personal loans don’t require you to pledge collateral for you to get approved. Instead, lenders will look into your creditworthiness. They use this in evaluating your application, which includes your ability to pay, the interest rate, and the loan amount you can qualify.
Borrowers with good credit scores usually get lower interest rates and favourable terms than those with bad credit scores. Hence, it is vital to work on your credit if you currently have a bad credit score.
Personal loans usually have fixed rates. This means the interest rates under fixed-rate personal loans will remain the same from the start to the end of the loan term. Because the payment amount remains the same throughout the term of the loan, repayment is simpler to manage.
Variable-rate personal loans are less common. However, some lenders offer this type of loan. Under a variable-rate personal loan, your interest rate will be subject to change over time based on a financial index.
The following are examples of personal loans people usually get for a variety of purposes:
Credit builder loans help you with rebuilding and building credit. This is an excellent option for those who are struggling with having bad credit. Furthermore, they are also good with those who are still starting to build credit.
This type of loan can either be secured or unsecured, depending on the lender. Making on-time payments in this type of loan can improve your credit score. Most of the time, credit builder loans only offer small amounts that can be repaid over a few months.
Vacation loans are mostly unsecured. You can use this type of loan for your travel expenses. However, the drawback would be repaying the loan for several months or years. This means your vacation memories might fade away, but you still have to repay the loan.
An alternative for this type of loan would be to plan and save up money. You can prepare the amount you need earlier than your planned vacation. That way, you won’t end up paying interest from taking out a loan.
Wedding loans are typically unsecured. They are designed for a particular purpose. Since weddings can be expensive at times, this type of loan can help you make ends meet.
This is excellent if you have a good credit score. That way, you will get favourable terms and interest rates. Moreover, you can lessen the loan amount you want to borrow by changing your wedding plans or saving up money.
If you have many debts, you can use debt consolidation loans to manage it easier. Most of the time, this type of loan is unsecured. Furthermore, if you pay a lesser interest rate using this loan, you can get out of your debts a little faster than usual and save money. You can also use this loan to pay off your credit cards, which leads to an improvement in your credit utilization ratio.
It pays to know the different types of personal loans. That way, you will know what to expect in borrowing money. Furthermore, it is vital to note that you should only borrow funds you can afford to avoid any financial problems in the long run.
According to the gospel of personal finance, ‘saving money’ is the Holy Grail of financial independence. But once you embark on this path who’s to say you’re being frugal, not stingy? And what’s the difference between the two? Let’s take a closer look.
If your determination to not part with money goes overboard, the world has reserved a few names for you: miserly, niggardly, tight-fisted, mean, plus a few more choice words. Yes, these are all synonyms for stingy, but clearly, there’s not much good to say about individuals with Scrooge-like qualities.
On the other hand, being frugal is often associated with thriftiness, carefulness, caution, prudence, self-discipline, and good management. All qualities that would make Gandhi proud.
However, due to the paper-thin line between frugality and stinginess, it’s easy to get lumped together with the bad apples when all you’re trying to do is channel a bit of Gandhi. Or worse, you might end up morphing into an unpleasant caricature of Scrooge without realising it.
This requires us to break down the difference between the two, so you can easily stay on the financially and socially acceptable road to monetary freedom.
Is money more important to you than family and friends? There’s a cost to having a healthy social circle, and most stingy people are not willing to pay for it. For instance, they’ll turn down invitations to social events, gatherings, or dates that require money until their friends no longer bother to ask. Stinginess can, therefore, turn you into a social loner.
In contrast, frugal individuals are willing to pony up some of their savings to maintain relationships with the people around them. They realise there’s a way to still spend less while enjoying special company. For instance, they’ll look up discounts when visiting restaurants or stick to affordable options. They may also organise bring and share get-togethers or put together picnic dates to keep things economical.
Sometimes the only way to show your care for loved ones is by spending on them. Stinginess can quickly turn into selfishness when you’re reluctant to invest in making others happy. This is by no means an obligation, but it leaves you focusing on the value of money rather than the value other people bring into your life.
Frugality is quite the opposite. You can still be frugal and considerate. This involves simple things like leaving a tip to show your appreciation of wait staff, shopping for affordable but meaningful gifts during holiday season and special occasions, or even splashing out on an expensive purchase or experience for the sake of another person’s well-being or pleasure.
Cheapskates have been known to devise extreme means of saving money. There’s dumpster diving for expired food, coin hunting, and going to the other side of town to buy something that’s a dollar cheaper than the milk bar around the corner. But frugal people prefer to be economical with both their time and money. Each second they invest should bring tangible and reasonable rewards.
By way of example, a frugal person might spend time tracking down cheaper service providers, goods, and grocery items. If this helps them save hundreds of dollars, then it’s well worth it. At the end of the day, you should not have blinders when trying to save a buck or two. Frittering away a big chunk of time to save a disproportionate amount of money is not the way to go.
Another way stingy people have blinders is when they choose a low price over quality, even when it doesn’t make financial sense. The famous author, Terry Pratchett, manages to explain this concept through Samuel Vimes, a cynical character in his Discworld books:
The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots at the same time and would still have wet feet.
Replace poor man with stingy man in the above quote, and you’ll have hit the nail right on the head when it comes to a critical difference between frugality and stinginess.
Looking at all the comparisons we’ve made, being stingy boils down to having a low quality of life while frugality maintains or improves life quality. Here’s how:
While it is true that spending less and saving more can catapult you to financial freedom, it also doesn’t mean you have to sacrifice your happiness along the way. When you choose frugality over stinginess, the journey might be longer, but it’s bound to be more comfortable. And when you finally find financial independence, the experience will be sweeter because of the investments you’ve made along the way. You’ll have loving friends and family plus many precious memories and experiences that add depth and meaning to your life.
When it comes to managing your money, issues like dealing with surplus cash flow, making big investments, climbing the property ladder, planning for retirement, and more could be part of the mix.
With such a tall order, you might be in the market for a financial planner who can step in, hold your hand, and help you navigate the complex landscape of your finances. So, how do you locate a good financial planner? Most importantly, what’s the cost, and how do you ensure you’re still hitting your financial goals square on the head?
There’s a hodgepodge of professionals on Australia’s financial planning landscape. But if you need help staying on top of your finances, you should do your homework before engaging any financial planner or adviser. To point out the slight difference between the two, a financial planner is a specific type of adviser who helps you craft a long-term program that helps you meet your financial goals.
On the other hand, “financial adviser” is a blanket term that covers professionals who help you knuckle down on specific financial goals. Across the board, financial advisers and planners have more know-how regarding saving, investing, and managing money. This can be handy if you’re faced with a situation that’s way over your head. For instance, you might need expert advice before you sink your finances into several investment products.
It all boils down to whether you have the time, confidence, and savviness to chase after your financial goals without help. If you’re looking for general guidance on debt management and building cash savings, you can easily scour the market for free resources.
But if you find yourself treading unfamiliar water, it’s generally best to seek advice instead of risking it all. By way of example, enlisting the services of a financial adviser is recommended when you:
A financial adviser’s services can be loosely split into the following:
For the most part, the Future of Financial Advice (FoFA) reforms have cracked down on commission-based services. But, you’ll still need to be wary when it comes to life insurance products that have somehow slipped through a loophole in the newest regulations. Generally, it’s best to recruit a fee-based or independent financial adviser who can freely recommend products that span the entire market.
Planners who work for a commission have sometimes been found guilty of pushing only specific products, thereby limiting you to a particular part of the market. With commission as the carrot at the end of the stick, it’s easy for a financial planner to lose sight of your best interests.
For low-cost options, you can consider planners who conduct business over the telephone or through online means. You can also avail yourself of the benefits of digital technology by checking out Robo-advice. This is a computer program that churns out advice using an algorithm after you feed it your financial details. While this may sound fascinating and futuristic, there are still many limitations to speak of when it comes to getting in-depth advice for complex financial affairs.
A more up close and personal meeting with your planner is preferred but expensive, especially if they have offices in a swanky part of town. Keep in mind the overhead costs will inflate your bill. However, the first introductory meeting is usually free, so there’s that.
When searching for a good financial planner, you can cast your nets wide in several ways:
Always ask for qualifications before getting down to business. Previously, advisers could get by with passing off monogrammed business cards which were of scant value to clients. According to new legislation, a qualified adviser should now boast a bachelor’s degree.
They should also pass strict tests to ensure compliance with ethical codes and professional development requirements. Asides from qualifications, you should also check for the following:
When shopping around for a planner, you should draft a short-list of promising options and then set up one-on-one meetings. When you show up, take the first step in establishing a relationship by providing the following:
In turn, you should also ask your planner the following questions:
This depends on the type of services you subscribe to, but charges can include a plan fee, product fees, and ongoing fees. Under a different pricing model, you may be required to pay a specific percentage of assets under management. Remember, there’s no such thing as a free lunch. Planners who offer free services usually work for a commission. Therefore, they’re merely waiting to cash out on money you invest, and taking their advice will likely end up poorly for you.
So you finally have your financial plan in hand? What next? Make sure it spells out everything clearly and accurately – from an assessment of your current needs and situations to details of how specific recommendations will change the status quo. If you’re dealing with a true professional, expect to see a professional-looking document complete with page numbers, a table of contents, and an executive summary.
If you feel the plan is not up to scratch, clarify your areas of concern and ask the planner to work on it more. Once the plan is complete, make sure it doesn’t get buried at the back of your desk drawer. Instead, negotiate a reasonable fee that allows you to review the plan here and there to accommodate your changing financial needs and goals.
Everyone needs a vacation once in a while, and while it’s a good idea to lay back and contemplate what you’re doing with your life, it can be a hassle if you don’t come prepared. But why is it such a hassle? One word: budgeting.
Having a vacation can be costly, especially if you didn’t save up money beforehand. Creating a budget and sticking to it as you spend money on your vacation is essential if you don’t want to take on debt- that is, if you saved up enough money for the vacation. In reality, however, many Americans rack up so much debt in just a single vacation.
It’s not surprising, to be honest. There are many things you need to spend on a single vacation like your lodgings, car rentals, flight expenses, or RVs. Fortunately, there are alternative loan options if you want to finance an RV. But first, let’s delve deep into what an RV loan is and how it works.
An RV loan is a type of loan that helps you finance an RV. This type of loan is a long-term loan that can be used to buy a motorhome, a camper, or a travel trailer. These RVs do not come cheap and have a range of at least $10k to a million, or even more. For this reason, many RV buyers need to rely on some form of easy financing to purchase these vehicles. Thus, RV loans exist.
However, if you want to opt for second-hand vehicles that are still usable, there are lenders in the market that offer loans, allowing you to purchase new ones or used vehicles. Also, there are a lot of alternative lenders in the market, not just banks. You can find lenders online, credit unions, or RV dealerships that run promotions or loans to help their customers buy an RV.
More often than not, RV loans are made as collateral once you’re unable to pay the loan itself. However, this can also be a good thing since a loan that puts up your purchased RV as collateral means you don’t have to put your other valuable assets on the line.
Since RVs are expensive, the repayment terms for RV loans are typically long, like 10 to 15 years. It’s like this to make the repayments more affordable and customer-friendly. If you are looking for RV loans with good credit that don’t last that long, you can find one if you look hard enough. Some even offer less interest if you’re able to pay for the loan before the repayment period ends.
However, if you aren’t sold on taking out an RV loan, check out these alternative options that you can opt for your next vacation.
If you are shopping for loan rates for your RV, you can try finding one that is specific for the RV that you want to buy. Major banks and other alternative lenders have reasonable rates. However, the percentage you will pay in interest will depend on whether the RV you’re buying is new or not or whether it is from a dealer or a private party.
If you’re buying from a dealer, lenders tend to give you the best rates and a warranty from a dealer, which is an excellent deal for most. But if you’re buying from a private party, interest rates tend to go up, although private parties can be negotiated about the principal amount you will pay.
Under the category of RV type loans are dealer loans. Generally, RV dealers tend to offer financing on their expensive vehicles, just like your typical auto dealer. A lender typically backs this in-house financing, but you can submit your application through the dealer and the negotiations about the RV. Not only that, but dealers also tend to give off discounts and promotions when you’re buying higher-priced RVs.
That said, if you’re planning to buy from a dealer, you can ask if they are running discounts or other promotions that can affect the final price of the RV. Probably the only drawback of financing an RV through a dealership is that it is much more of a hassle to process since there is a lot of paperwork and admin works, making it more challenging to obtain than an auto loan.
If you are determined to get better RV rates, you can compare rates from banks, dealers, and alternative lenders in your area. Yes, dealership loans are more convenient to obtain. However, they can cost more over the life of the loan.
This is especially true if you didn’t enjoy a discount or a promotion that reduces the RV’s final price, not to mention that dealerships sometimes have a higher interest rate.
Also, your credit score will affect your chances of obtaining an RV loan significantly. If you manage to apply for the RV loan successfully, you’re also more than likely to get a high-interest rate.
Before taking out an RV loan, check your credit score. If it is poor, consider improving it first before taking out the loan. The better your credit score is, the better chances you will land a much better loan in terms of repayment terms and the final price of your RV (if you buy from a dealer).
HELOC or home equity line of credit may be an option for you to finance your RV. The best thing about HELOC is that its interest rates are significantly lower than your typical credit card rate or personal loans. This is because it’s secured with your home. You might want to double-check on that since this can be a significant risk to you. If you default on the loan, your house will be seized, which is unfortunate, to begin with.
If an RV is number one on your wishlist, the first thing you should think about to obtain it is how to finance it. There are a lot of places you can talk to if you want financing options for your RV. However, the process can be a challenge, not to mention risky and costly. That said, do your research, and look for better alternatives and financing options to finally get the RV of your dreams.
Lauren Cordell is a writer that excels in articles that talk about travel and financing. In her free time, she usually browses her social media and plays board games.
Buying your first car is one of the biggest, most important choices you will ever make. Like many big firsts in life, it can be daunting, overwhelming and at times, you won’t know what you should be doing. Before you head out to the car dealer, here are seven tips to help you start forming a plan for this major purchase.
This goes without saying for any big decision. Doing some research before you head out to a car dealership can save you a lot of time. Knowing what you’re looking for or what you want can help you and the car dealer narrow your needs down and help you find the right car.
Knowing your budget for a new or used car is another key aspect of buying a car. If you’re going for a used car, Grays Online has a pricing guide, and a selection of used cars you can peruse to get an idea of what is out there, and what is available, as well as the average price for a used car. Price will depend on a variety of things, and if you have a tight budget, a used car may be the best way to go.
This one ties into budget. Once you’ve determined whether your budget covers new or used cars, look at Car Sales for further advice on hidden costs, or additional costs for new cars, as well as cars on the market, reviews and what models might work best for you. Keep in mind that your needs will always be different to the generic advice on theses websites, but this advice can always be applied to most needs and decisions. Used cars will be cheaper, but some of the perks of a new car may not be there.
The Commonwealth Bank will give you good financial advice when it comes to buying a car. You could be the best driver in the world, but because the roads and other drivers are incredibly unpredictable, and driving is one area where we can’t control everything that happens, CommBank advises getting car insurance. Remember to take these costs into consideration when buying your first car, as having car insurance can help when you have an accident or if your car is stolen or damaged.
Using websites such as Grays Online and Car Sales can help you compare prices, models, and everything you could ever need to know about your first car. It is important to do your research for every aspect, and a comparison can help you determine the best way forward for you and your first car. Many of these tips tie into each other, so there might be a lot of crossover with your research.
CommBank suggests getting your finances sorted before buying your first car as well. You can save–which can take time, but it means you’ll own your car outright and won’t have to pay back car loans if you borrow the money from a bank. This loan, something you can apply for once you turn eighteen, can be paid off in instalments.
CommBank suggests a third option, and one that comes into play if you’re employed. Some jobs provide a car lease program, known as a novated lease. This can finance a new or used car, with the repayments taken out of your salary, and can bundle many of the different costs related to owning a car in one.
Photo by Zach Vessels on Unsplash
When you were little what did you consider to be a ‘grown-up’?
To a four-year-old, to be ten, double digits, is the reach the height of maturity. A year six student is pretty grown-up to a kindergartener. To a year seven student, their geography teacher is clearly a grown-up even if they’re only 23 years old, fresh out of university and still living with their parents. Grown-ups have cars, jobs, wear high heels, have briefcases and furrowed brows. They can cross the road without holding anyone’s hand. They drink coffee and watch boring news on TV instead of cartoons.
To a little kid, once you’re a ‘grown-up’ you’ve got everything figured out, however, grown-ups rarely feel like they’ve got everything under control. Adults – particularly young adults – often feel fraudulent, like they’re playing dress-up like, there are so many markers of adulthood they haven’t checked off yet.
For the record, there’s no one correct way to be an adult but there are a few universal things that we’ve all got on our to-do lists that need to be dealt with so, set a bit of time aside to check these five things off your ‘being a grown-up’ to-do list.
We know what you’re thinking, ‘right for me, if I can tap it and buy things then that makes it right for me!’ but actually, your specific bank and credit card type can have a major impact on your finances. Why do you have the credit card you currently have? Perhaps you researched it meticulously and made what you’re absolutely certain is the right choice for you. If so, then great! However, most of us got our credit cards based on recommendations from friends or family members or even because it was the default option recommended by the bank. There are various types of credit cards on the market: low-rate cards, balance transfer cards, low annual fee cards, cards linked to rewards or frequent flyer programs. You’ll need to do some research to determine which card matches your current needs. You can read more about different types of credit cards here.
If 2020 has taught us one thing it’s that we should expect the unexpected. Many of us have been thrown for a loop by the coronavirus and the way it’s changed how or even if we are able to work. Many young people were caught unawares and being unable to pay their rent were forced to move back in with their parents (which is no big deal and honestly your parents cooking was better anyway!) but they could have been saved by an emergency fund. An emergency fund is a backup fund, separate for your savings that can cover any unexpected and urgent expenses. To learn more about how to save for an emergency fund, check out this MoneySmart resource.
This piece of advice will be short and sweet. Eating dinner sitting on the floor is cute once, twice tops but at the end of the day, the distinction between a coffee table and a dining table is important! Go to a cheap flat-pack furniture store, your local market place, take advantage of council pick up. It doesn’t have to be an expensive table but just get a table and a couple of folding chairs so that you can have people over for dinner like the grown-up that you are!
People are going to keep asking you about wine the older you get. It is one of life’s inevitabilities, people will start caring more and more about wine the older that you get and eventually, you’re going to have to expand your wine vocabulary beyond ‘red’, ‘white’ and ‘another glass, please.’ There are plenty of ways to expand your wine vocabulary and the best thing about this is that you can do this by drinking! Get yourself some wine that comes with tasting notes or go to a wine tasting and experiment until you find which varietals you like.
Read voraciously! In a society so obsessed with immortality, our neglect of the written word is downright shameful. To quote Umberto Eco, “The person who doesn’t read lives only one life. The reader lives 5,000. Reading is immortality backwards.” So read a book that wasn’t assigned to you in school. Open your eyes to diverse perspectives. Read a classic, read something written by someone whose lived experience is different from your own. Check out this list of 100 classic books you should read in your lifetime.
For a first-time buyer, deciding which car insurance to purchase can be more complicated than choosing the car itself. There are so many terms that are thrown around Comprehensive Car Insurance, Third-Party Insurance, Fire and Theft Insurance, Compulsory Insurance…Honestly, it can feel a bit like your insurance might need its own insurance sometimes!
It’s one of those things that isn’t taught at school but you wish would have been because, like doing taxes, cooking and learning how to make a doctor’s appointment, it’s important but unfortunately, it isn’t something many of us understand.
Insurance is important and it protects you from being left up a creek without a paddle if your car gets damaged, stolen or needs serious repairs. It is also easy to think you might not need car insurance if you’re a careful driver but, the statistics tell us otherwise. Road crashes are very common all across Australia and you’d never drive without a seat belt or airbags, so, why would you drive without insurance?
So, for something so important it stands to reason that we should all get a little more education on the subject.
Comprehensive Car Insurance lives up to the name. If you are looking for peace of mind then a Comprehensive Insurance policy will give you reassurance in spades. These policies are known for giving you extensive coverage in a wide range of situations from accidents and collisions (even if you’re at fault). They cover towing and emergency repairs and often even offer replacement cars if your vehicle is a write-off. They even provide cover for damage done in situations where you’re not behind the wheel, for example, theft, fire, vandalism, malicious damage or weather-related damage. Some policies even stretch as far as to cover your car’s contents if it’s stolen or damaged.
If you invest in comprehensive car insurance, your insurance policy will also have your back should your vehicle cause damage to someone else’s vehicle or property. So, if an accident that you’re in causes consequent damage to another person’s vehicle, belongings or private property then your insurance will pay to repair or replace the damaged property belonging to someone else. Comprehensive Car Insurance policies are highly competitive meaning you’re sure to find a fairly priced policy that will suit your needs. If you’re still not sure how this relates to your recent car purchase, a good rule of thumb to follow is if you’ve bought a brand-new car or your car is in relatively good condition then comprehensive car insurance would likely be your best option. To learn more about the specifics of policies, head here to check out NRMA comprehensive car insurance.
Third-Party Car Insurance, sometimes called Third-Party Property Damage Insurance, offers a lower level of coverage. At its most basic level, this sort of coverage covers damage to other people’s vehicles and property but, if your car is damaged in the same event, and you are found to be at fault, your repairs likely won’t be covered (although specific plans vary from insurer to insurer).
Who would this type of insurance be suited to? If you have a relatively low-value car meaning the value of the car is low enough that you wouldn’t bother to repair it, or if you know you wouldn’t be left struggling to pay for repairs out of your own pocket then this level of insurance may be sufficient for you. If this is the case, you’d still need to be insured so that you are not left financially exposed by having to pay for the damage your car might do to a more valuable vehicle or piece of private property.
An important thing to remember is that Third- Party Car Insurance is not the same thing as Compulsory Third Party (CTP) Insurance or your Green Slip. In Australia, CTP Insurance is mandatory and you’ll need to provide proof of it before you can register your car. In most states, your CTP Insurance is rolled into your registration, but in NSW you need to purchase it separately. This insurance covers the liability for anyone behind the wheel in the case they injure other individuals in a motor accident but won’t cover any damage to property.
The sort of car insurance you should buy is dependent on the amount of coverage you’ll need. Comprehensive Car Insurance offers you near-total peace of mind, covering you extensively in a wide range of situations whether or not you’re at fault and whether or not you’re behind the wheel at the time. This is the best choice if you’re driving a new car that is in relatively good condition. If the value of your car is relatively low, Third Party Car Insurance may be enough for you. If you’re interested in a further comparison between the two policies, check out this Australian government comparison resource.
So you’re interested in starting your own business, it’s an exciting although nerve-wracking time. There’s always some risk involves but there’s no point going in blind – so here is our cheat sheet for first-time business owners to help you along your journey.
If you’ve even gotten to the point where you’ve found this article, it’s likely that you’ve got a killer idea. You’ve been mulling it over in your head and it’s gotten to the point where you just know you have to see it through. Whether you plan to provide a service, produce your own goods, open a restaurant cafe, or something else undoubtedly wonderful – if you’re confident in your idea you owe it to yourself to pursue it.
Takeaway coffee is a great idea but we’ve already got more coffee shops, cafes and Starbucks franchises than you can shake a stick at. So no matter how good your idea is you have to be sure you can do it in your own unique way. Aim for something amazing, achievable and most importantly: needed!
How can you assess whether your business is needed? A simple way to do this is to find a niche and stick to it. Be incredibly clear and specific about what you’re going to do and why your approach will be different and better than other businesses already in the field.
There’s no denying it, starting your own business is always going to be risky. There are so many unknowns: will people buy your product? Need your services? Seek you out? Without taking a leap you have no way to have these questions answered. Though these questions can leave you susceptible to self-doubt and can have you thinking maybe you’re not ready yet but you are! Take that risk! It is totally normal to feel nervous because what is coming next requires a massive leap of faith but it’s one that many great entrepreneurs have taken before you.
Applying for an ABN is surprisingly simple and definitely necessary if you want to start a business. You’ll want to go to this website to apply for your ABN (don’t worry the process is simple and they’ll talk you through the steps). There are some scams so make sure you are only giving your information to the official government website and remember, ABN application is a completely free process so you shouldn’t be providing payment. You’ll also need to register for GST in order to get your business up and running. Click here to have some legal assistance when applying for company registration.
So, you’ve started your own business, now you’ll need the cash flow to keep things running smoothly. To do this, you’ll want to get a great business credit card. We suggest a charge card with no pre-set spending limits. This does not equate to a totally blank cheque but rather every month you’ll be able to spend whatever your card provider thinks you can payback. When used wisely, experts say that a business card can extend your companies cash flow by 55 days! To learn more about business credit cards with no pre-set spending limits check out this article.
Starting a new business is always going to be hard even under the best circumstances so you owe it to yourself to get all the help you can find! So get yourself a mentor and mine them for all the advice you can get. There is no glory to be gained from going it alone, in fact, without a support system, many new businesses fail. So accept every piece of advice that comes your way, from friends, family, other business owners – even your rivals. You may want to consider a formal mentorship, you can head here for tips about how to approach a mentor.
Starting a new business is undeniably challenging and even seasoned investors and lifelong entrepreneurs can still make mistakes. Everyone is fallible. There’s sure to be setbacks along the way so don’t be too hard on yourself pick yourself up and try again.
As the saying goes: ‘the dream doesn’t work unless you do’ when it comes to starting a business this has never been more true! Plenty of people have great ideas but very few people manage to muster the courage and momentum to put their ideas into practice – you have to have absolute faith in yourself! The first few days, weeks, months, or even years of your journey as a new business owner are bound to be rocky but, if you have confidence in yourself and your vision you’ll be able to weather the storm and take your dream and turn it into a reality!
Anyone can be an investor, but when it comes to investing in property, you need to know what you are doing. It takes more than just skill to be good at investing. It takes persistence, focus and wisdom to know when it is the right time for you to invest in the right property. And although some of the characteristics that all successful real estate investors have may come naturally to them, you can become a better investor over time if you learn to adapt.
As mentioned before, in order to be a successful investor, sometimes you have to be patient. The perfect investment property will not come along very often, so you need to be patient, because getting a return from your investment in real estate can take time. It is true that sometimes you will need to move fast to snap up a good deal on a newly listed property, but you will also need to wait sometimes as well and weigh up your options before diving in. Sometimes, it can pay off to follow your own instincts when you are investing in property, because rushing in to invest in the wrong property can cost you a lot of money. Sometimes, you may have to wait months to find the right property, but it can be worth it if you know when to invest.
In order to be successful with your investment, you need to educate yourself and learn about the property market in your area. Looking at past trends in your local market is a great way to get a sense of what the future holds, so that you can make the best possible property investments. This is because most markets tend to fluctuate in similar patterns, so you will know when there rises and falls in the market based on time periods and things that may happen in the area. Most people usually do some research over the last 5 to 25 years to see how the market has performed during each cycle to see when the best times to invest were during this period. However, at times the market can be very volatile due to unforeseeable circumstances, so you will need to make your own decisions based on a combination of research and instinct to land the best deals.
Having an interest in investing in property is very important, because your love for investing can ensure that you succeed at it. Understanding the market and having an interest in real estate is very important when it comes to investing in property because they are the things that will drive you to become a great investor. If you don’t care about what you are doing, there is no reason to do it, so passion about investing is an important characteristic of a good investor. A great way to get excited about investing is to try and create some goals for yourself so that you will feel good when you achieve them. This could be anything from owning a share in a property to flipping and selling your own property by yourself, but having a goal can motivate you to to achieve great things through your investments
Smart investors know that sometimes you need to try different strategies in order to get the best return from your investment. Sometimes, you may need to try investing in different properties or using methods that you are not familiar with to make money. This could even mean diversifying your portfolio and buying a share in a property, rather than paying for the whole thing. Online property marketplaces like Roofstock are becoming more and more popular with property investors because it allows people to invest as much or as little as they would like in a property, while still getting a return on their investment over time. Good investors know when to adapt to new ideas and to try new things, because if the stars align, these strategies can pay off for them.
In order to be a great property investor, you need to know how to manage your money well. This means that you need a steady income and a good understanding of which properties are worth investing in to make money as a real estate investor. A person who is constantly in debt to other people or not sure of their financial situation is not going to be a good investor, because he won’t know how much money he has to invest at any given time, which can work against you if you are not careful. If you are very interested in investing and you have limited funds to play with, speak to an investment specialist, who can advise you on investing in property successfully. They have an extensive knowledge of the property market and a background in financial planning or investing, so can really help you to get the best return for your investment.
Anyone can be a real estate investor, but it takes a certain kind of person to be really good at investing in property. Teaching yourself about investing and the property market in your area is a great place to start when you are learning about investing in property, so you have to be prepared to invest your time and money into becoming a successful investor. It can be hard at first, but once you get the hang of it, you will find it easy to make money as an investor and thoroughly enjoy doing it.
When you are looking to buy a new car, you want to make sure that you are getting what you are paying for by getting the best deal that you possibly can. If you haven’t bought a car for yourself before, it can be hard to know what to do before you buy your car. Luckily, there are a lot of great tips out there that you can adhere to, so that you can make sure that you get the best deal on your next purchase of a new car.
Finding out the market value for your new car before you go and buy it is the best way to ensure that you are getting a good deal on your new car. There are a lot of websites out there that can help you calculate the market value of your car so that you know what you should be looking for when you go to a dealership to buy your new car. It may also be worth looking at Consumer Reports for the car that you are looking to buy, so that you can know what other people think about it. They can tell you about any issues that others may have had with the car based on consumer experience, so you can be certain that the car you want will be up to your standard.
If you want to get the best deal for your new car, you need to shop around, because that is the only way that you will ensure that you will get the best deal. Each car dealership can offer whatever price they like for the brand new car that they are selling so it pays to compare prices from dealers in your area, so that you know exactly what each of them can offer you. Websites like Price My Car are great for people that want to compare the prices of new cars, because it allows you to look at all of the dealers in your area to find the best price for your car. Using a tool like this will also give you a rough estimate of the amount of money that you will need for your new car, so you can plan accordingly.
If you are trying to get some money together to pay for your new car, the first place you should start is with your old car. You are probably going to get rid of your old car when you buy your new car, so you might as well put the value of your old car towards your new one. Although sometimes trading in your old car can be the best way to get the money to afford your new car, selling your car separately before you buy a new car may be a better option for you. Selling your car separately will give you the freedom to go and buy from any dealer, rather than working with just one dealer. This will give you the freedom to shop around to find the best deal, so that you can save money for the right car for you.
If you want to get a good deal for your next car, sometimes you have to negotiate to get the best deal. For example, if you have shopped around and you know about some of the deals that other dealers are offering on the same model of car, you may be able to use that information to get a better deal on your next car. To beat other dealers in the area, your dealer may offer you a discount or a few added extras, like rust-proofing, extended warranty or free car washes for a year, so that you buy with them. If you don’t ask, you won’t get, so it is worth negotiating in this situation because car dealers are trained sales professionals.
If you have the option, when buying a new car you should always pay in cash. This isn’t because car dealers like cash more than liquid currency, it is because paying in cash can help you to limit the amount of money you are spending on the car. If you get a car loan to pay for your car, you may actually have to pay more for the car in the long run, because you will have to pay for interest rates on your loan, making the total a bit more than you may have anticipated. Another thing to remember is that, some dealerships will offer discounts to people that will pay for their car in cash, so you can actually save money by paying in cash in some cases, which is what you want.
There are many things that you can do to ensure that you get the best deal on your new car. The key is to do your research before you go out and meet with dealers, so that you know exactly what you want and what sort of price you should be offered. It can be hard to find the best deal for the new car that you want, but at the end of the day you can save yourself a lot of money by negotiating and shopping around, so it is truly worth it.
Each year, over 10,000 Australians go the US to start a new life. Part of life’s journey often includes getting a loan. And before you get that loan, whether it’s a car or personal loan, you may want to be aware of the great significance your credit score plays in getting in better a interest rate and even getting the loan to begin with.
Your credit score is the number that lenders and creditors use to gauge your risk as a borrower. Credit card companies, mortgage bankers, and auto dealers are the three bigwigs of lending who evaluate your credit score before deciding whether or not to approve your loan application and much interest rate they’re going to charge you.
As the US debt Stats burgeon, there are certain sectors that starts to impose stringent requirements when it comes to accepting applicants. It is evident to employers, landlords, and insurance companies who take a peek at your credit score to find out how responsible (or reckless) you are when it comes to money before they will offer you a job, renting you out an apartment, or issue you an insurance policy.
Yes, your credit score is that important. But what exactly is a credit score? You may ask.
A credit score, in its most generic term, is a statistical number based on credit history that assesses the creditworthiness of a consumer. Lenders use it to rate your probability to repay debts.
It typically ranges between 300 to 850. The rule of thumb is that the higher your credit score, the more financially trustworthy you are. Otherwise, you’ll be labelled as a high-risk borrower if you have a less-than-desirable credit score.
Your credit score is calculated through these five different factors.
Your payment history makes up for 35% of your total credit score. As a matter of fact, your timeliness in paying bills will profoundly affect your credit score more than any other metric.
Delinquent payment issues such as collections, charge-offs, repossession, tax liens, bankruptcy, or foreclosure can take a severe toll on your credit score. For this reason, it becomes almost impossible to get approved for anything that requires a stellar credit, especially loans.
You need to make on-time payments every month to boost the health of your credit score and increase your chances of getting approved on applications whose requirements involve an excellent credit score.
The total amount of your debts takes 30% of your credit score. Calculating it involves evaluating some few essential factors regarding your debt. Such factors are the credit utilisation ratio or the ratio of your credit card balances to your credit limit, the relation of your loan balances to the original loan amount, and the amount of overall debt you carry.
As a rule, you need to maintain your credit card utilisation within 30% or less of your card’s available limit. Having too much debt or high balances can greatly affect your credit score. Fortunately, it’s easy to fix. All you need to do is pay off all remaining balances.
The age of your credit history accounts 15% of your total credit score. It considers both the average age of all your accounts and the age of your oldest account. It’s ideal for your credit score to have an “older credit age” as it shows that you’re already experienced in handling and managing credit.
Moreover, closing existing accounts or opening new accounts minimises your average credit age. As such, it will not be a good idea to open multiple new accounts simultaneously.
Inquiries consume 10% of your credit score. An inquiry is placed on your credit report that shows you’ve made a credit-based application whenever you submit an application that demands a credit check.
Making at least one or two inquiries don’t make a big difference, but several inquiries do. It’s particularly visible within a short period and may cost you several points off to your score. With that, it’s crucial to keep your applications to a minimum to keep your credit score in good shape.
The good thing is that only those inquiries made within the last 12 months will be factored into your credit score. Inquiries will completely vanish from your credit report after two years. Take heed also that checking your own credit report will result in a so-called “soft” inquiry, but it doesn’t affect your credit score.
It makes up the remaining 10% of your credit score. The final metric to consider for determining your credit score is whether or not you’re using different types of credit such as store accounts, credit cards, mortgages, and instalment loans. The number of accounts you have will also be taken into consideration.
You don’t need to worry if you don’t have accounts in each of these categories. You don’t have to open new accounts too just to increase your mix of credit types.
While there are important metrics that influence your credit score, there are some factors too that most borrowers commonly thought will affect their credit scores. However, they don’t, or at least not directly.
Your credit score is quite important in getting approved for loans and obtaining the best interest rates. However, you don’t need to torment yourself about the scoring guidelines just to achieve the kind of score that lenders want. Generally, if you will responsibly manage your credit, your score will shine through.
If you’ve never applied for a mortgage before, there are a few essential pieces of information you need to know. To start, you should have a deposit of at least twenty per cent of the home’s value, a steady income along with a good credit history.
Let’s take a look below over the things you need to get a mortgage in Australia and how to make application approval just that little bit easier.
First things first, you’ll need a copy of as much personal information as you can get. If you’re applying for a mortgage from lenders, you’ll need to provide information on your employment history, previous addresses, plenty of information on your current assets as well as a comprehensive look into your income and expenses.
Here’s a list of the general pieces of personal information you’ll need to have ready for your mortgage application:
Now that you have some idea of the types of personal information you’ll need to get a mortgage in Australia, we can move on to determining what you can afford.
A second step in getting a mortgage in Australia is understanding what you can afford and making lifestyle changes to ensure your lender knows you can afford to pay it.
To make it easier to determine if you can afford the loan, begin with your income each month and take out the expected loan repayment. From there, work out whether the leftover income is enough to pay your bills and general everyday expenses.
For a better chance of success in your mortgage application, it’s also a good idea to have a deposit saved up prior to your application. This way you’ll be able to reduce your monthly repayments and show you’re a responsible saver.
If you’re planning on taking out a loan from banks like St. George, there’s a great mortgage deposit guide to give you some information on how best to meet lender requirements as well as how to become a low-risk borrower.
As we mentioned above, a deposit is essential to reduce your loan amount. However, depending on which bank you choose, your minimum deposit amount may change. If you’ve saved only 19 per cent or less of the value of the home you’re looking to buy, you’re considered a high-risk borrower and will need to pay lenders mortgage insurance.
We suggest spending a year or two building your savings account for your deposit, as it’s more financially wise to pay less interest and rely less on a 90 per cent loan.
To many Australians, a mortgage is the biggest loan they’ll ever have. And with that said, you must be able to show lenders that you’re capable of being frugal and responsible with money. One way to do this is by setting up a long-term savings account and regularly depositing into it. This account could even be your mortgage deposit account.
This account will show lenders you’re able to pay repayments on time, in full and not default in the future.
If you do have a bad credit history, there is some good news, and that is that it’s repairable if you work hard. The truth is, a bad credit score will stay with you for a decade, though lenders rarely focus on financial decisions from a decade ago. Work to rebuild your score for two years prior to your mortgage application and you’ll be on track for approval.
Even if you have a solid credit score, having spotty employment history is likely to leave your application in the rejected pile. There’s little point to applying for a mortgage in Australia if you’ve jumped from job to job in the months leading up to your mortgage application. On top of this, if you’re in-between jobs it’s also not the best idea to apply either.
What we suggest is that you be employed for a solid three months prior to submitting your mortgage application, and ensure you’re going to stick with that job for the foreseeable future. This way there’s little chance of financial hardship and defaulting on your repayments.
When times get tough we could all do with some extra cash. If you’re running low on emergency savings, have a credit card or phone bill on its way and no money in the bank, you might be getting anxious. Thankfully, there are plenty of ways to get cash quickly.
Below we will take a brief look over seven of the easier ways to get cash quickly to pay for those bills.
Up first is the simplest way to get cash quickly – a short term loan. On services like CashnGo you can take out short term loans of up to $2,000 to pay bills, buy groceries or do anything you’d like. One part of the service is that you can choose to pay off the loan between one and three months.
If one to three months is not sufficient for you, consider comparing longer term personal loans.
Another great way to get your hands on some extra cash is by selling items on Gumtree. Have a look around the house for items which might hold some value that you no longer use. These could be something as trivial as a premium phone case like a LifeProof, a TV or clothes. You’ll be able to sell these online in a few clicks to get some quick cash.
Our tip here is to take a quick look on Gumtree’s homepage for some inspiration. There could be things on sale for a few hundred dollars that you never realised you could sell.
A more localised version of GumTree is Facebook Marketplace. You’ll find that there’s a huge market for knickknacks and used items on Marketplace which is great if you’re looking to make a little extra cash as fast as possible. Most of the items listed, including yours, are likely to be sold for pickup only, so make sure you have your location settings correct.
There are plenty of categories to choose from on Marketplace so you’ll be able to classify your items, making them easier for potential buyers to find.
Did you know that empty spaces in your home can be rented out to the public for them to use as storage? On websites like Spacer, you’re able to list your garage or spare bedroom for anyone to use as a storage space for their items or even a car. You’ll be paid for this and it’s a fantastic way to make some extra money from a spare bedroom or garage that you don’t use very often.
If you’re a pet lover, then this one’s for you. You can sign up to walk or pet sit animals on Mad Paws and get paid to do so! You can choose your own hours as well as pick your own rates so that you’re making enough to cover those unexpected expenses without having to change your daily schedule too much.
All you need to do is head over to the Mad Paws website, fill out the Become a Sitter application and you’ll be on your way to getting paid for walking or pet sitting people’s adorable pets!
A fairly easy way to get some quick cash is by offering your opinion or providing research companies access to your smartphone habits. Depending on the study, you’ll either be asked to do a little writing, let companies know your opinion on their services and products or give them access to your phone or computer habits.
Organisations like Roy Morgan and Nielsen pay participants for their opinions and for a look into their TV and internet browsing habits for statistical reports. Something as simple as installing an app on your smartphone can earn you up to $150.
Take a look at the Focus People’s website to find market research opportunities in your area.
If you don’t think your old electronics are in good enough condition to sell on Facebook Marketplace or Gumtree, then look to recyclers or a refurbisher. Scour through your house and there’s a good chance you’ll have an old iPhone, iPad or Galaxy device that you no longer use. Take these devices to a recycler and they’ll likely offer a fixed-price payment for your device. Online retailers also offer payments for the devices that you send in, check out refurbished electronics sellers like mresell.com.au.
Starting an online business can be an exciting venture. Whether it’s something you want to do for fun, or you’re looking to increase your financial freedom, it will involve a lot of time, work and effort. In today’s internet landscape, there’s more and more small businesses starting every day which means the market is increasingly competitive. Here’s 6 steps that will help you start an online business.
For those looking to start a business, it’s easy to get excited and try to find what you will be selling immediately. However, if there’s no people looking to purchase what you’re selling, your business is likely to struggle. Therefore, the best approach is to start by finding a market.
The key is to find a market that has a problem without a real or effective solution. The internet has made this significantly easier as you can search online forums for what people are looking for, search engines for what businesses are competing, and how you can improve upon what they’re offering.
Something you might not initially consider when starting a business is the legal process you will have to endure. There’s a lot to set up when you create your business. Firstly, you must determine your legal business structure. This might be a sole proprietorship, a partnership, or a type of corporation. Typically, a one-person business would be a sole proprietorship.
It’s also worth protecting your businesses brand and name by trademarking your logo, name and any designs. At the same time, it’s important to ensure you aren’t infringing on any existing trademarks. Specialised trademark lawyers like LegalVision are well-experienced in trademark registration and help ensure you and your business get through the process properly.
When people search for a product on google, it can be seen as the start of the customer journey or sales process. Not everyone is looking to make a purchase straight away. People seek out information, reviews, alternatives all while slowly working towards the end sale. It’s important that your online store satisfies each of these points in the consumer journey. Show the consumer what problem they have, and tell them how your product or service can uniquely solve this problem and make the customers life better.
The better information you have, the more memorable your brand will be and so the more likely it is that a reader will turn into a customer.
If you have an online business, it’s clear that your website will need to top quality. Think of your website as your virtual storefront. Keep things clean and simple, making it easy for your visitors to understand what you sell and find their way around the site.
Make sure it loads quickly, and it’s easy for customers to make a purchase. It’s also important that you have a way to capture visitors email addresses. This will help you keep your customers up to date and sell to them without having to get them on your site again
Email marketing is one way to increase your sales, but there’s many other channels that you can leverage in the digital space. Pay-per-click (PPC) advertising is the easiest way to generate traffic. In Google, your PPC ads typically appear right at the top of the search results and you only pay for those who click on your ad. This is a good form of advertising, especially for newer sites that are testing out their pages and keywords.
It’s important however, to generate organic traffic. Search Engine Optimisation (SEO) is the act of optimising your website for search engines such as google. The idea is that the better your site is in the eyes of Google, the better it will rank for specific keywords.
Another thing you can do online is build yourself up as an authority in your chosen space. As an authority, your customers are more likely to trust you and make repeat purchases. To do this, it will take time and a considerable amount of work but can be extremely valuable to your business. Your site might have a blog where you write content addressing customer pain-points and how your product can be a solution to these problems. You can also build up your authority by guest posting on popular sites within your niche. The more often people see your name and business, the more familiar they will be with it and the more likely they will be to make a purchase from you, rather than a competitor.
If you’re starting an online business, it’s important that you first do your research. While it can be exciting, diving in headfirst will usually set you up for failure. Knowing what to sell and how to do so is just the beginning of launching a successful business.
With the new year in full swing, people are setting out to realise their New Year’s resolutions. By now, some may have already failed and others may be struggling to find ways to continue towards their new goals. A huge amount of New Year’s resolutions are financial related and of course, finding ways to make and save money is helpful for everyone. Here is 6 money hacks that can help you for 2019.
Budgeting can hardly be seen as a hack. Everyone knows the huge difference it can make, however, very few people actually set out and follow an effective budget. Doing so can be one of the most powerful money hacks there is.
It’s important to know exactly how much money is coming in and what money must go out. Things like bills, groceries and transport are all necessities and must be paid. Once you subtract these things from your income, you can then see how much money you’re left with for saving and spending. Obviously, you should spend less than you earn and save as much as you can. Today there’s a huge amount of apps that can help you plan out and track your budget. If you’re not an app person, you can create a simple excel spreadsheet.
The best time to plant a tree was 20 years ago. The second-best time is now. No, we’re not telling you to stat selling trees, but this old Chinese proverb is a great way to get inspired and motivated to start doing things.
It can be easy to feel like you have missed all the opportunities. “Bitcoins rise and fall has come and gone”, “Apple stocks have reached their limit“, ”I’m too old”. The excuses can go on, but you will only miss more opportunities. There’s no time like the present to start investing and it can be easier to get started than you might think.
Apps like Raiz make it super simple by rounding up your purchases to the nearest dollar and investing the spare change. You can choose how aggressive your investments are, and how much you want to invest. Over a few years you could build up $1000’s in savings simply by rounding up your daily purchases.
If you want to get more serious about making your money work for you, you can consider trading on the Forex market. This strategy will take a bit more learning, but with the right strategies, taught by professional coaches like that of Learn to Trade, it’s possible to make money on the foreign exchange market.
Now we’re not telling you to stop exercising, but gym memberships can build up to be quite the expense. Think about what it is you do at the gym and consider if you actually need the gym. A lot of exercise can be done for free at your own home and in local parks.
Find body weight exercises you can do almost anywhere, such as pushups, situps, lunges and dips. Of course, running is super easy without a gym too. Getting rid of that membership can save you hundreds or thousands of dollars every year.
Access is the new ownership, at least that’s the idea behind the sharing economy. Sharing your assets within the community is a much more affordable and efficient way of using things rather than everybody paying for new items. There’s really no limit to the sharing economy, from fashion with The Volte to space with Spacer.
We all have our vices, whether we know it or not. Think about what you regularly spend money on, that you don’t necessarily need. It might be smoking, drinking, clubbing, or the monthly hair appointment. All of these things can cost hundreds of dollars every week.
Try going for several weeks or months without one of your vices. You will be surprised with the impact it can make on your finances.
Cooking at home can save you a huge amount of money. Restaurants, cafes and fast food might be easy and delicious, but I bet that’s not what your bank account thinks. Learning to cook can be fun and rewarding, and when you see the savings building up, it’s sure to be a worthy investment.
The three broad types of home loan interest rates each have pros and cons. Deciding between them can seem tricky, but don’t worry, we’re here to help!
Whether you’re a first time property buyer, or a veteran real estate investor, it’s crucial to get acquainted with home loan fees. If you’ve used a home loan calculator or comparison rates to shop around online, you’ll be familiar already with how home loan fees can easily add up quite quickly.
Home loan fees can make a big difference in the total amount you’ll be paying on your mortgage. Whether you’ve found the best interest rate or not, fees are a key factor to consider if you’re hoping to save money in the long run. This guide explains some of the standard home loan fees, so you’ll know what to look out for when choosing a mortgage.
Application, establishment, set-up, start-up or up-front fees all refer to the one-off charge that you’ll pay when setting up your mortgage. The average Australian mortgage of $350,000 may be associated with an application fee of up to $500 for residential home loans, and only slightly more for investment properties. Home loans without establishment fees may charge you more in terms of maintenance or ongoing fees throughout the duration of your loan.
Maintenance or ongoing fees may be monthly, quarterly or annual, and are also sometimes called loan service fees. These service or administration charges may sometimes be required in under certain situations, a good example of this is a redraw facility fee. Redraw facilities will only apply if you’re using the redraw option to withdraw additional repayments you’ve made on your home loan.
Lenders and credit providers are covered by Lenders’ Mortgage Insurance (LMI) as a rule. This protects them in the instance that you or other borrowers default on a home loan. As a first time home buyer, you’ll often be charged an LMI fee if your home loan is an amount above 80% of your property value. If it’s not your first time taking out a home loan to buy property, you will typically be charged LMI fees if you’re borrowing to cover your entire property value.
It is possible in some instances to get some of your LMI premium refunded. This may be an option if you’ve been with your current home loan for one or two years and you’re switching loans. It’s also a good idea to check whether you can avoid paying LMI again if you’re changing to a new loan outside this period. This might be the case if you have enough equity on your home if you’re paying LMI at the moment.
Break fees, or break costs, apply when you switch home loans before your fixed rate home loan period is complete. They can be quite high in some instances. If market interest rates have decreased during the period you’ve had your fixed rate home loan, its generally the case that break costs will be higher. They aren’t always set at in advance, so you’ll often only find out what the break cost will be when you ask your lender.
Early exit fees are also known as deferred establishment fees, early termination fees, deferred application fees or early discharge fees. These are the charges you’ll be looking at if you wish to completely pay off your home loan within a specific time frame. As an example, you’ll most likely be charged an early exit fee if you’ve had your mortgage for under 5 years.
On the plus side, they are capped under Australian Law so that the lender you’re leaving can only recoup the amount they will have lost by your early exit. This means that home loan providers will not be able to charge exit fees as a means of putting you off moving your home loan elsewhere. If you’re quite lucky, you’ll notice a few lenders who offer to pay your early exit fees when you sign up with them. As always, make sure you consider other fees, interest rates, features and flexibility when looking to switch lenders.
Termination fees are also sometimes called settlement fees or home loan discharge fees. These apply when you repay the total amount of your mortgage. For the average Australian mortgage, it’s not unusual for discharge or termination fees to range around the $250 mark.
Refinancing fees are charged by your new credit provider when you move your home loan to them while refinancing. These may be flexible in terms of their size, so negotiation isn’t always off the table. Refinancing will very often involve discharge fees, application fees, and break fees. It’s important to think things through carefully before you refinance your home loan to avoid paying too much in charges.
There’s more to it than fees and bad news, actually. Under Australian law, you’re not required to pay over 48% per annum on your mortgage. This includes set-up and fixed fees. It’s a good thing, because home loan fees can cost the average first time home buyer a fair amount in the first year alone.
There are a few other fees that might apply to your home loan, depending on your circumstances. In some instances it is possible to come across charges like:
It’s strongly recommended that you talk to your lender or loan provider before you commit to a mortgage. Yes, you should do this even if you’ve carefully checked out what’s on offer online because while these deals may be relevant at the time they’re published, they may change at any time. Please do read the fine print, too before signing anything, as home loan fees can easily add up to thousands over the course of your home loan.
Term deposits are a generally low-risk ways to invest your money at a fixed interest rate for a set period. They’re amongst the most straightforward financial products available, but do prevent you from instantly accessing your money throughout the entire deposit period.
Withdrawing your term deposit before maturity is not a straightforward task. When you deposit with a bank or credit union, that institution typically uses this money to lend to other customers. The high interest rates associated with term deposits is thus an incentive for you not to withdraw while these funds are being used for other purposes. When you do need to terminate your deposit early, it’s normal to be faced with financial penalties.
Because you’ve essentially committed your funds for the period of your term deposit, it’s often necessary to give 31 days advance notice if you’d like to make an early withdrawal. It’s best to consider whether you’re sure about locking away your funds before you open a term deposit.
If you decide that you’d like to invest your money elsewhere or if you need them in case of an emergency, you’re likely to be faced with a range of different penalties for withdrawing before maturity. Different institutions will charge different fees, which might be called early withdrawal fees or prepayment penalties depending on your institution.
A common penalty for withdrawing early from your term deposit is for your bank to apply a reduced interest rate to your remaining funds. The amount of the decrease will often be larger if you have a longer term remaining. For example, a term deposit earning 3% per annum and withdrawn fairly early may be penalised by dropping to 2% per annum, while a deposit termination made later on might only incur a 0.5% per annum penalty.
Another penalty charged by some institutions is a break fee, which will also vary between institutions. Reading the fine print of your term deposit agreement is generally a good way to understand what your penalties might be before you invest. It’s worth doing this before you choose a term deposit that suits you, so you can decide if it’s the product for you.
Very frequently term deposits will come with minimum balance requirements. What this means is that even if you aren’t withdrawing the entire deposit before maturity, it’s possible you’ll be lowering your overall balance to below the minimum amount required. If this happens, it’s often the case that the bank will close your term deposit account automatically. It’s also not unusual for the interest rate reduction to be applied on top of the remaining deposit.
It’s always good to consider your options before you open a term deposit, and it’s well worth being aware of the following things:
‘Cooling-off’ periods are a feature of some term deposits, and these give you a chance to withdraw your funds and close your mind penalty-free if you simply change your mind.
If you’re reading this, you’re probably familiar with the dream of owning and living comfortably in your own home. Ideally, without the hassle of rent or mortgage repayments. In reality though, we live in a country with the highest housing price-to-income ratio, and ever-rising property prices. Which means, most of us are realistically stuck with mortgages that take years to pay off, and it can feel overwhelming at times
The average first home owners in Australia are borrowing over $344,000, and the average Aussie home loan comes in at over $400,000. With fees and interest, the average Australian homeowner could quite easily be paying over $1,000,000 if not they’re not making their repayments as quickly as possible. At the same time, we are faced daily with hundreds of unique and original home loan options. It’s no real surprise then, that most of us are looking for real ways to repay our home loans early. But how can we do this practically, without a massive pay rise?
There is no such thing as a free lunch. If there were, we’d all be having a laugh in our mortgage-free houses or enjoying a barbie in our fully paid-off gardens. There are a few strategies you can use though, that could make a big difference in early home loan repayments.
A simple way to speed up your home loan repayment is to consider rounding up the figure directly debited from your account. The average Australian pays around ~5% per annum (standard variable) on the average home loan of around $400,000, a monthly repayment of $2150. If rounded up to $2200, roughly the price of 10 morning coffees, this totals $600 annually off the average home loan repayment.
The easiest way to do this and accelerate towards a life without mortgage repayments is to adjust your direct debit. Doing so is a one-off task and will make sure you don’t have to make the nail-biting decision each month.
Interest on a mortgage is calculated daily. Although mortgage repayments are often displayed as a monthly figure that doesn’t mean you have to repay the mortgage on a monthly basis. By making more regular repayments (weekly or fortnightly) you cut down the principal on which your interest is calculated. This one tactic could save you 10’s of thousands of dollars over the life of your loan.
If you can afford it, professional financial assistance can go a long way. Consider getting help from experts like mortgage brokers and lenders, financial planners and investment specialists. A trained advisor or specialist could help you consider financial strategies and do the legwork for you. With a clear idea of the steps needed to pay off your home loan early, professionals can make a big difference by giving you some structure to achieve this.
Experts will also take note of all the important factors like your income, where your property is located, other debt and your own determination or willpower. Considering your options, find a planner who can realistically help you achieve your mortgage repayment goals.
Rearranging the structure of your repayments can only go so far! When you’ve tried everything above, it’s time to make do some budget redesign. To really make a difference and pay off a home loan early, Australians have loads of options.
Are you currently using a savings plan? Paying higher than average utility bills or a monthly mobile cap you don’t really use? It’s likely that you could rethink the amount you spend on these things, isn’t it? By saving electricity, water, petrol or redirecting your savings direct debit, you could re-channel these funds into your home loan repayments.
By now you’ve probably heard of American Adam Hatter, who redesigned his budget and paid off his $157 000 mortgage in five years. The good news is, you don’t need to buy all your clothes from op shops like he and his wife did. Even small changes can make a big difference, like packing lunch rather than buying that $15 superfood salad. At this point it might seem like we have something against coffee, but do you really need that $3 barista-made flat white every day?
Whether this is your first, second or third home loan, you could do well to learn from professional investors. Whether you choose to invest in shares, bonds or more real estate, a smart investment plan can yield you profits for your repayments. You could even use half your profits for paying off your home loan early and reinvest some of your returns, depending on your strategy. Remember, be smart and go with a professional portfolio manager if you’re not confident.
It’s always a good idea to know a little more about the credit options available on the market, so you can make informed decisions when you need to. Whatever you plan to use your personal loan for, there are smart ways and not-so-smart ways to go about spending your borrowed funds.
Before you take out a personal loan, it’s great practice to understand what you’ll be looking at in terms of features. We’ve highlighted the key features of personal loans in this guide, so you can make the best decisions around your personal loan use. You’ll need to consider:
We’ve given debt consolidation it’s own little heading because it can be easy to overlook the ways that you might consider personal loans for refinancing.
If you have several loans out at different interest rates, a personal loan could help you roll these into one more manageable monthly repayment. Say you have a car loan at 10% and two credit card debts at 18% and 20% respectively, a smart personal loan use might be to consolidate these debts. In this case, you would be looking for a personal loan which covers these combined outstanding debts in terms of value, but with:
When you apply for a personal loan, you’ll be asked what you intend to use the borrowed funds for. Your intended personal loan use will impact how likely it is that you’ll be approved – think “personal jet pack” vs. “children’s college funds”.
Some personal loans such as secured car loans will also come with restrictions on what you can purchase, which means it’s smart to do your homework before applying. It’s worth noting that debt consolidation is considered a higher risk purpose than if you’re planning to buy an asset.
There are several things you’ll be able to get with a personal loan, which could be up to $100,000 depending on your financial situation. This gives you more flexibility and potentially lower interest rates than credit cards for example, meaning you’ll want to consider funding for:
Hopefully we’ve helped you consider some of the key aspects of choosing a personal loan. With a better idea of personal loan uses, you’ll be better able to make a decision about comparing loans, and consolidating debt or using your funds.