Tag Archives: Budgetting

Essential apps for budgeting and saving money

By Robert Wright /July 20,2020/

Determined to master your money and stick to a budget in 2020? It doesn’t have to be boring or difficult if you keep it simple, and easier still if you let technology do the heavy lifting for you.

1. Pocketbook

Pocketbook automatically organises your spending into categories like clothes, groceries and fuel, showing you where money is being spent. You can also set up budgets for each category, see your balances and view your transactions. The app ensures all your bills are automatically detected and in the one place. Plus, you get notified when bill payments are coming up and if you have enough money to cover them.

2. MoneyBrilliant

Want to have a personal financial assistant in your pocket? According to their website, that’s just what you’ll get with MoneyBrilliant. This app is similar to Pocketbook as it connects your bank accounts to help you monitor your finances. The basic version also allows you to connect your credit cards, loans, superannuation and investment accounts. Other basic features include creating budgets, getting bill notifications, categorizing expenses, working out your net worth, and generating spending reports.

With the plus plan, you get access to a whole host of other features and services. The upgrade provides alerts for better deals from service providers, recommendations for optimising your accounts and products to making your finances simpler and sorts your expenses into tax deduction categories.

 3. PocketSmith

In its basic version PocketSmith is similar to MoneyBrilliant and Pocketbook, with automatic imports of bank transactions and access to reports summarising your financial activity. It also offers features like digital and cash spending projections, calendars and a choice of either daily, weekly or monthly flexible budgeting options to suit your lifestyle and financial needs.

4. Goodbudget

If you’re a fan of the old-fashioned ways of managing your finances, this could be the app for you. And as you can’t sync it to your bank accounts, you might also prefer Goodbudget if you’re not completely comfortable with sharing bank details with an app.

Goodbudget takes the envelope system digital. Instead of dividing cash for rent, bills and savings between paper envelopes, you get to create up to 10 virtual ones with the basic version of this app. By doing this you can direct your income to where it’s needed, making sure essential expenses are covered and stopping you from overspending on extras. The Plus plan gives you access to unlimited envelopes and the ability to use the app from more devices.

 5. WiseList

With more of a focus on helping you save this app brings a couple of extra elements to managing your budget and bills. It’s designed to help you spend less on your food bills, with features for comparing product prices and getting family members working together on shopping lists.

You can also keep track of loyalty points you’re earning as you shop and plan to save even more with app notifications when your favourite products are on special. It has some handy features for keeping on top of your other bills too. Simply take a photo of each bill and the app will store all the important information and alert you before the due date.

6. Finder

Launched in 2020, the Finder app brings together the money-tracking capability seen in other apps with their well-known comparison data for financial products and services. Not only can this app sync with your bank accounts, it also gives you regular updates on your credit score and savings tips based on analysis of what you’re spending money on.

7. Beem It

An independent company backed by Commonwealth Bank, NAB and Westpac, Beem It is an Aussie version of the popular US bill-splitting app, SplitWise. With Beem It, you can take the hassle and awkwardness out of sharing expenses with friends by making it easy to calculate each person’s share and make requests for payment as well as transfers.

Source: Money and Life

Why it’s important to think about insurance ahead of retirement

By Robert Wright /June 01,2020/

Finding the right level of insurance cover is important when you’re thinking about retirement.

If retirement’s coming up on your horizon, the impact of COVID-19 (Coronavirus) may have thrown a warehouse-sized rack of spanners in your planning.

It makes sense to concentrate on things you can control, such as insurance. Too-high premiums can chew away at the foundations of your savings, at a time when they’re more important than ever. Under-insure and one day your floor may collapse, undone by events you can’t foresee.

Cover for a changing life

A good way to get started is to think about what you really need, and what you don’t. As you get close to retirement, you may want to make sure you’re holding the right insurance for the lifestyle you want.

Here’s a simple checklist that may help:

1. Ask yourself how much money your family would have if you were to pass away or become disabled.
2. Compare that with how much money your family might need in the same situation, including how they’d manage paying for day-to-day costs like child-care and mortgages.
3. The difference between the two can help you work out how much insurance you may need.

Many of us take out insurance and are done with it – it’s enough to know we have the proverbial rainy day covered off. However, with economic clouds gathering, now’s a good time to review what you’ve already got and assess if it’s still right for you and your needs.

So, dig out your existing insurance agreements, taking special note of when they’re due to expire and your continued eligibility for the policies they hold.

An important area for many Australians is insurance held inside superannuation.

Insurance inside super

Insurance inside super can help us out when we really need it. Like any type of insurance, it works best when you’ve got the right level of protection for your situation. As you head towards retirement and your life changes, so might your priorities.

As well as life insurance, you might have total and permanent disablement (TPD) inside super. TPD cover may provide you with a lump-sum payment if you suffer a disability that prevents you from ever working again.

TPD could help you pay for ongoing medical expenses, alterations to your home to make day-to-day life easier and help provide future financial stability.

Total salary continuance, also known as income protection, is designed to pay a monthly benefit of up to 75% of your pre-disability regular income if you’re unable to work due to injury or illness.

Typically, within super, income protection provides you with cover either for a two-year or five-year period or until you turn 65, depending on the terms in your employer plan.

What to look out for

There are pros and cons of insurance within super. Things to think about if you’re approaching retirement include:

• Cover through super may end when you reach a certain age (usually 65 or 70). That’s generally different to cover that’s outside a super account.
• Taxes may be applied to TPD benefits depending on your age.
• Claim payments may take longer, as the money is normally paid by the insurer to the trustee of the super fund before it’s paid to you or your dependants.

Don’t double up and stay flexible

As part of your review, it’s also a good idea to check insurance you hold inside super against other policies you might have outside super.

Then compare your cover, check whether you have any insurance double ups – if you have more than one super account with the same type of insurance, you may be paying for more insurance than you need.

As well as comparing the level of cover you get, consider any exclusions, such as the treatment of any pre-existing medical conditions, and waiting periods. Remember that if you do cancel your insurance, you might lose access to features and benefits and may not be able to sign back up at the same rate.

It’s also important to disclose your situation to your insurer honestly. Otherwise, the insurer may be entitled to refuse your claim.

Tricky times call for flexible thinking. Volatility can be daunting, whatever age you are. Fortunately, you’ve got the life experience to look beyond the headlines and adapt to changing circumstances. Reviewing your insurance is as good as any place to start.

 

Source: AMP

How fit are your finances?

By Robert Wright /June 01,2020/

Wearable technology can monitor our heart rate and tell us how much sleep we’ve had, but what about our financial wellbeing? If you could benefit from a Fitbit for your finances, read on.

Just like your physical health, the more you can monitor what’s happening with your finances, the easier it will be to improve your financial fitness.

We all know that financial stress can have a negative impact on our physical and mental wellbeing, leading to stress, anxiety and depression. Research has even shown that employees suffering high financial stress are “more than four times as likely to complain of headaches, depression and other ailments.”

So, if you could get a Fitbit for your finances, what would it track? Keep an eye on these key metrics and you could be feeling financially fit in no time.

1. Spending

Expenses are a fact of life, but this is one area where things can easily get out of hand. Much like overeating, it’s all too easy to buy too much and spend on things you don’t really need, especially if you’re not keeping track of where your money is going. And technology sometimes makes it even easier to overspend.

Buy Now Pay Later and tap and go payments make it harder than ever to keep track of what’s leaving your account.

What to do:  

Make a list of your essential costs, such as rent or mortgage, utilities, food, fees and regular bills.

Try using a spreadsheet or budgeting app to make tracking your spending as easy as possible. Many banks now offer breakdowns of your spending by category in their apps, so take advantage of these free tools. By monitoring where you’re actually spending money each day, you’ll quickly get a true picture of your financial health. If your spending habits are putting you on the wrong path, learn how to plan and stick to a budget.

2. Debt

Like carrying a few extra kilos, debt can creep up on you and weigh you down more than you realise.

Reserve Bank data shows consumers have nearly twice as much household debt as income. Meanwhile, the average Aussie tips the scales at $3271 in credit card debt, adding huge pressure to their daily lives.

What to do:

• Detox your debt. The first step to financial health includes keeping levels of personal debt to a minimum.
• Look at consolidating your debts onto one card or personal loan, so that you’re only dealing with one repayment each month.
• Take advantage of interest free periods to pay down your debt.
• Put a repayment plan in place – and stick to it!

3. Savings

Once your debt reduction strategy is underway, you can focus on another key aspect of your financial health: Savings. How much you have stashed for a rainy day is a strong indicator of your overall financial health.

What to do:

Open a dedicated high-interest savings account that’s separate from all of your other accounts.

Make regular, consistent deposits – weekly, fortnightly or monthly. Add any extra cash windfalls to your savings account, such as tax returns or bonuses. Sit back and watch the power of compound interest at work.

4. Superannuation

If you want to stay financially fit and healthy into your old age, you need to lay the groundwork now. That means knowing how much you need to maintain the lifestyle you want and working towards that figure.

The Association of Superannuation Funds of Australia (ASFA) estimates that for a couple to have a ‘comfortable’ lifestyle they need at least $640,000, while a single person needs $545,000.

5. Emergency fund

Like health insurance for your finances, having an emergency fund gives you a buffer against unexpected hard times. You should aim to have enough in your emergency account to cover six months of living expenses, including housing, to protect you in the event of losing your job, falling ill or any other major disruption.

6. Insurance

If you should lose your income for longer, or permanently, there are several types of personal insurance that can help protect you and your family from financial hardship.

Life insurance, total and permanent disability (TPD) and income protection all have a role to play in your financial wellbeing. Depending on your stage of life, financial situation and responsibilities, it’s worth ensuring that you have a mix of all three types of insurance.

A financial planner can help you understand what you need and get the right level of cover to protect your lifestyle.

7. Credit rating

A good third-party check-up of your financial health is your credit rating. Compiled from your personal financial information by a credit reporting agency, it’s one important indicator of your overall financial fitness.

Several things can affect your credit score, including your borrowings, number of credit applications and whether you make repayments on time.

 

Source: Money and Life

Take stock of how much conveniences are costing you

By Robert Wright /June 01,2020/

With weeks, and perhaps months, of self-isolation ahead, many of life’s conveniences like streaming and delivery services will become our essentials. But if you’re used to spending unlimited amounts to make life that little bit easier, now is a good time to look at what you can live without to make your budget go further.

These days it’s easy to order just about anything on demand. With the tap of a button, you can stream the latest music, have food and drinks delivered to your door and choose a new outfit with next-day delivery. But convenience could be costing more than you realise, with serious consequences for your future financial security. And with the growing number of ‘set and forget’ payments for subscriptions and services consumers are often footing the bill for things even when they’re not really using them.

There are also costs to society and the environment that come with the convenience of online shopping. All that packaging and fuel consumption that comes with home deliveries can really add up to big problems for landfill and climate change.

If convenience is troubling your conscience, as well as your hip-pocket, take a closer look at these five areas where it’s easy to overdo it. Also, get these ideas on what you could do to put some sensible limits on your convenience spending.

1. Entertainment

The convenience of online streaming services has made them essential for many people looking to enjoy entertainment at home and on the go. Unfortunately, free trial periods and automated payment schedules make it easy to forget exactly what you’ve signed up for.

To get a handle on your spending, do an audit of your subscriptions. Check your bank account and credit card statements for the last three-months at least to find any automatic payments. Then select the services you want to be using in line with your entertainment budget. If you don’t have a fixed amount in your budget for entertainment, try limiting it to one service per category.

2. Food and beverages

Consumers splurge a whopping $238 a month (or nearly $60 a week) on food delivery services, research shows, with a further $140 a month on takeaway and coffees.

If you find yourself regularly turning to apps to satisfy your hunger pangs, here are some strategies you can try to limit the splurge.

• Keep healthy snacks with you to curb those cravings when they hit. Things like fresh fruit, nuts and muesli bars can help take the edge off your appetite, so you’re not tempted to hit order when you get too hungry.
• Plan your meals a couple of days in advance, so you know what you’re going to make and can have the ingredients on hand.
• Take an online cooking class. Learning a bunch of fun new recipes can make it easier to enjoy some excitement with your home cooking instead of turning to take-away to add variety to your mealtimes.

Swapping even one home-delivered meal for a home-cooked meal each week really adds up. A saving of just $40 a week would put over $2000 back in your pocket over the course of a year.

3. Transport

On demand transport apps have changed the way we travel. If you live in a big city, chances are you use apps like Uber fairly often. But since the fees come directly out of your account, you may not even realise just how much you’re spending on travel.

There’s also the environmental impact to consider. Each private trip produces much more carbon pollution than public transport. When you weigh up the true cost, is it really worth it?

The answer is simple: when social distancing rules are relaxed you can swap private rides for public transport, walking or cycling wherever you can. There are some great public transport apps around that make it quick and easy to catch a bus or train, so you can still rely on technology to make travel simple.

4. Technology

Apps, games, smartphones, tablets, eReaders… how much do you spend on technology that you don’t even use?

With many devices costing upwards of $1000, delaying that upgrade until you really need it could be a win for your pocket – and for the environment.

App subscriptions are another sneaky expense that really adds up. They may seem inexpensive and often have free trial periods, so it’s really easy to forget what you actually end up paying for. Check your subscription list at least once a month and delete anything you don’t need. Your bank balance will thank you.

5. Easy payment services

Buy now, pay later (BNPL) arrangements have exploded onto the scene in recent years as a popular way to finance a variety of purchases. Figures show that 30% of Aussies have at least one BNPL account, spending around $7 billion a year. Most of that is going on fashion, followed by appliances, entertainment, food and drinks.

But there’s evidence that BNPL services lead to overspending. A full 60% of BNPL users surveyed by Mozo reported purchasing things they normally wouldn’t, thanks to the easy payment instalments.

If this sounds like you, it might be time to step away from Afterpay, Zip and other BNPL services and get back to good old-fashioned saving in order to get what you need.

 

Source: Money and Life