Tag Archives: Lifestyle

Why financial wellbeing is a pillar of good health

By Robert Wright /August 07,2020/

When we talk about financial wellbeing, what do we mean? More than just earning an income, financial wellbeing is about having financial security and the freedom to make choices. There are three interrelated aspects to good financial wellbeing:

1. The ability to meet your expenses and have money left over.
2. Feeling and acting in control of your finances.
3. Being financially secure and not needing to worry too much about money.

It’s considered normal for your financial wellbeing to vary over the course of your life. This is particularly true during major life events such as moving out of home, having a baby, changing jobs or retiring. Unexpected financial shocks can also have a big impact on your financial wellbeing.

How fit are our nation’s finances?

The Financial Wellbeing Australia report (2018) describes four categories of financial wellbeing. Around a quarter of all respondents (extrapolated to 4.5 million Aussies) were classed as having the highest level of financial wellbeing.

Around 40% (or 7.4 million Aussies) fell into the category of “doing ok”. They described their situation as “fair” or “good” and were relatively confident about the next 12-months. A further 23% of respondents (around 4.4 million people) were just getting by, while the remaining 13% (2.4 million people) were considered to be “struggling”.

How can I improve my finances?

Developing good financial habits will help you improve your financial health over time. That includes:

• Having a budget or spending plan.
• Making regular cash savings.
• Building an emergency fund of at least six months living expenses.
• Paying down debt and maintaining a good credit rating.
• Having adequate insurance.
• Building up enough superannuation to retire comfortably.

Much like your physical and mental health, your financial health needs regular check-ups to stay in good condition.

How can a financial planner help?

Think of your financial planner like your family doctor: as your partner in good health. Having the right financial planner on your team can help you navigate life’s ups and downs.

A financial planner is able to support your changing needs at every stage of life. For example, in your twenties and thirties a financial planner can help you save, invest and plan for a family. They can help you consolidate and protect your wealth into your forties and prepare for retirement in your 50s, 60s and 70s.

When you go to see a financial planning professional, they’ll look at your overall financial wellbeing and develop a plan tailored to your circumstances. Again, much like the family doctor, financial planning is an ongoing relationship, not just a one-off meeting. So, look for someone that you feel comfortable with and can work with long-term.

Source: Money and Life

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

Should you give your teenager a credit card?

By Robert Wright /July 20,2020/

We live in a culture of smartphones, WIFI, home delivery, online shopping and online gaming, where most needs and wants can be met almost instantly. With so much temptation to spend, it’s vital to teach your kids the money skills to help them enjoy financial wellbeing as adults. But should you give your teenager a credit card?

Pre-paid, debit or credit?

You might like to start with a pre-paid card or a debit card, so there’s a limit on what they can spend. Set the rules on what it can be used for and how much they can spend. If they manage the process well, and if you’re confident that they’re responsible enough, you could give them a credit card (which would be a supplementary card connected to your own, as children under 18 cannot have their own card).

Before you give your teen a credit card, take the time to have a conversation about credit card fees, interest rates, and how spending irresponsibly can give you a bad credit rating, which is bad news for their future. Be clear that they will be responsible for all expenditure on the card – if they can’t afford it with cash, they shouldn’t put it on the credit card.

Rules, limits and know-how

Giving a teenager a credit card may seem risky or even irresponsible, but it can be a great teaching tool if the right conversations, rules and limits are put in place.

Before you give your teen a card, be sure to speak to them about how it works, how to be responsible with it and how to avoid financial trouble, including:

• How interest works – it’s important that they understand that a credit card is like a loan and if they don’t pay it back on time, they’ll be charged interest.
• Paying it off in full every month – show your teen a credit card statement and explain that if they only pay the minimum amount, they’ll still be charged interest.
• Paying on time – show them where they can find the due date for payments and help them to set up reminders to pay on time every month to avoid interest.
• Avoid overspending – teach your teen to keep track of their spending, and to never spend more than they earn. Use the credit card’s app to keep a tally on spending.
• Start with a credit limit lower than they earn – it’s a good idea to start with a credit limit that is not more than what they earn in a month. For example, setting a low limit for a teen may be $500 maximum so they can consistently pay it off at the end of each month.

Understanding ‘buy now, pay later’ services

The growing popularity of ‘buy now, pay later’ services such as Afterpay, Openpay and zipPay means it pays to help your teen understand how they work, and what the risks are.

These services allow shoppers to buy a product, take it home and pay for it in instalments via an online ‘buy now, pay later’ account, which deducts your preferred debit or credit card. Added to that, while the buy now, pay later provider might not charge interest on your purchase, you may still have to pay interest to your credit card provider if you don’t pay the full amount owing on your credit card by the due date.

Leading by example

While knowing the ins and outs of debt is important, one of the most powerful ways to help your kids develop healthy money habits is to lead by example. Our ideas about money are formed in our childhood, so if your kids see you living with healthy financial habits, they’re more likely to form those habits themselves.

Source: AMP

Digital payments and online banking explained

By Robert Wright /June 01,2020/

Face-to-face encounters have become less frequent in so many areas of our lives – and banking and shopping are no different. So, now’s an ideal time for older Australians to start integrating more digital transactions into their everyday banking. Using these methods for the first time can be intimidating, so we’ve answered some of the key questions you might have about digital transactions and online finance.

What are contactless payments?

In the wake of the COVID-19 (Coronavirus) health crisis, many shops and businesses have moved away from cash and are accepting payment by credit or debit card only. If you go into a store to buy something, you’ll likely be asked to use the ‘contactless’ payment method. This is simply a payment that’s processed in real time by holding your debit or credit card near the card reader without the need to swipe or insert it.

Also known as Tap & Go, this method allows you to make a purchase of up to $200 (temporarily increased from the $100 pre-COVID-19 limit) by simply hovering your card above the machine – you won’t need to enter a PIN.

If your transaction is in excess of $200, you’ll need to enter a PIN. Use one hand as a barrier over the keypad to prevent anyone else seeing your pin entry.

It’s also worth mentioning that some merchants may pass on the costs they incur to use these processing systems. If you are charged, the surcharge varies between merchants. You may find you’ll have to pay a small percentage for credit and debit purchases; however, merchants will generally let you know before the transaction.

How do I pay bills online?

Generally, a bill that you’d normally pay in person or at the post office can be paid online through online banking, using the secure and safe electronic payment system of BPAY, a widely used bill payment service.

Each bill you receive has its own unique BPAY information, which is located at the bottom of the bill. To pay a bill using BPAY:

1. you’ll need to log in to your own online banking system
2. go to the section where you pay someone or transfer money
3. select BPAY as the payment method, and
4. enter the information you find on your bill.

What details do I need to give when I’m shopping online?

While older Australians are still the most likely age category to prefer paying with cash, habits are changing we’ve seen a steady and significant move to payment methods other than cash in the over-65 age group.

When you purchase something online, you’ll be asked to enter your details, including your name, address and contact details for the delivery. You’ll also be asked for the debit or credit card number that appears on the front, as well as the CVC or CVV number, which is the three-digit number printed on the back of your card or four-digit number on the front of the card above the main numbers. This is an important anti-fraud measure to ensure that only you, the card holder, can make purchases online.

As a convenient feature on your computer or mobile phone, you may be prompted with a pop-up message to save your debit and credit card details for quicker checkouts when online shopping in future. If you don’t feel comfortable storing them digitally on your computer or mobile phone, you can reject or opt out of the pop-up request.

I’ve heard that online banking and shopping can be unsafe. How can I reduce this risk?

It’s true that if you’re online, there can be a risk of online fraud and ‘phishing’. Phishing is the sending of fraudulent messages through channels such as email, social media and text messages that are designed to steal your confidential information. However, there are several steps you can take to increase the safety of your finances and details online.

• Never give out your personal information or details via email, text message or over the phone, unless you have called your financial institution directly.
• Never enter sensitive details into a website you’ve arrived at by clicking on a link, including any links you’ve received in an email or text message. In particular, you should always go directly to the website of a financial institution or online banking system, rather than via a link.
• Familiarise yourself with scams that are circulating so you can stay informed. A regular update of these appears on the Stay Smart Online website.

Looking out for fraud during COVID-19

The COVID-19 outbreak provides a further smokescreen for fraudsters. Pretending to be legitimate businesses, from charities to your local supermarket, they hope to exploit confusion and the absence of face-to-face contact to gain your money and information.

If you suspect suspicious activity online or have been contacted via email or phone by someone who you think could be running a scam, it’s important that you contact your financial institution immediately to discuss the details.

 

Source: AMP