Category Archives: Finance

How Does the 2018 Federal Budget Affect You and Your Family?

If you sat down at 7:30 last night to watch the 2018 Federal Budget Announcement, you may have found yourself a little overwhelmed. With so many figures and areas of taxation to get your head around, we have sat down, dissected and summarised the answers to the question you may be asking – “What’s in it for me (and my family)?”

Personal income tax
The Treasurer announced plans for a three-step, seven-year plan:

  • Step One: Effective immediate, low and middle income earners are to benefit from tax savings of up to $530 per person (or $1,060 per couple).
  • Step Two: From 1 July this year, the threshold of the 32.5% tax bracket will increase from $87,000 to $90,000, then will again increase in July 2022 from $90,000 to $120,000.
  • Step Three: From 2024-25, there will be just two income tax brackets for people earning over $41,000 per year: 32.5% for incomes between $41,001 and $200,000, and 45% for incomes exceeding $200,000.
  • The Medicare levy will remain at 2%.

Your superannuation
Have you ever considered changing your super fund, but found it cost-prohibitive because of high exit fees? Great news in this years budget– super funds will soon be banned from charging exit fees. But you’ll need to wait until 1 July 2019 to make your move.Other changes to superannuation include:

The balance-eroding practice of automatically adding life insurance to a superannuation policy, no matter what the age of the person, will end. (To date, super members under the age of 25 pay nearly $200 million a year in life insurance fees through superannuation). Those under 25 are now required to ‘opt in’ to buying life insurance.

Companies can no longer automatically deduct life insurance cover for all funds where no contributions have been made for 13 months.

According to the Association of Superannuation Funds of Australia, more than 60% of Australians have multiple super funds. So, the ATO will turn their eye to inactive super accounts and merge them with their owners’ active funds.

  • Self-managed super funds (SMSFs) can now have 6 members, up from 4.
  • SMSFs with a history of good record keeping will be rewarded by reducing annual audits to 3 yearly audits.
  • People over 65 can put up to $300,000 into super from the proceeds of selling their home.
  • First home buyers who have made super contributions under the First Home Super Saver Scheme can access their money for eligible property purchases.

Education
Young people living in rural and remote communities will find it easier to get access to Youth Allowance payments while they are studying away from home (eligibility for these payments is based on parental income).Traineeships
The Federal Government will match funding with the states and territories to provide traineeships and apprenticeships for “high-demand” areas over four years. However, there is one caveat: each of the states and territories needed to sign up for this to go ahead.

Ageing Australia
There are a number of changes in this years budget to benefit older Australians. They include:

  • $1.6 billion over four years has been set aside so 14,000 seniors can stay in their homes rather than go into a nursing home.
  • $20 million for mental health nurses to support older people still living at home (the Government notes that men over 85 have the highest risk of suicide of all age groups).
  • $40 million has been budgeted for urgent building and maintenance work for aged care facilities in regional and remote areas.
  • $33 million has been set aside to address a chronic shortage of palliative care in nursing homes.
  • A one-year exemption from the ‘work test’ will apply to recent retirees who have less than $300,000 in total super savings.
  • The Pension Loans Scheme will be available to all Australians over Age Pension age and the maximum payments will increase to 150% of the full Age Pension.
  • Pension Work Bonus increases to $7,800 p.a. from $6,000.
  • Finally, the Government has pledged to make the aged-care system easier for families to navigate, simplifying forms and providing relevant online educational facilities.

Access to more affordable medicine: Granted, you will need to wait years for this, but it’s good to know the government will spend $302 million over four years to improve your access to generic and less expensive medicine.Your health
There are plans to allocate $130 billion for public hospitals over five years. The government also proposed a crack down on unnecessary diagnostic tests.

Access to your own data. The government announced the establishment of a “consumer data right”. This will allow you to take control of your online personal data and safely share it with credible service providers, starting with the banking, energy and telecommunications sectors.

Small business
No budget would be complete without something for small businesses. If you run your own business, the current deduction on spending on eligible assets of up to $20,000 has been extended to July 2019. Another win: streamlining of GST reporting which, in turn, will save money – a welcome change for around 2.7 million small businesses.

Craft Beer Brewers. There are around 350 craft brewers in Australia, so chances are you aren’t one of them. However, most consider the tax changes that put small craft beer brewers at a disadvantage to be a victory for common sense. Beer sold in kegs larger than 48 litres have been taxed at a lower rate than smaller kegs, which in effect has favoured large producers. The change brings the lower tax level down to beer sold in kegs larger than the 8-litre size.

Finally
While not all of these changes are likely to affect you personally, you might give them your ‘tick’ of approval:

  • Multinational companies now to be policed and stopped from shifting profits to lower-taxing countries (they do this by loading up local operations with debt).
  • Online hotel booking websites based outside of Australia will now be taxed at the same rate as Australian businesses, ending the inequality that currently occurs between international and local booking providers.
  • Companies that are currently ‘pushing the boundaries’ and taking advantage of the research and development tax incentive scheme will be stopped. This will ensure funding goes to genuinely innovative spending.
  • A $1.3 billion plan to support Australia as a ‘global leader’ in medical technology, biotechnology and pharmaceuticals.
  • The ATO will turn an eye to the ‘Black Market Economy”, with more audits, ‘mobile strike teams’ and a ‘Black Economy Hotline’ for the public to report suspicious activity of businesses attempting to avoid paying tax.

Saving Money – Are You Doing Enough?

It is estimated that we, as consumers, waste an average of 30% of our paychecks on items we don’t need or pay way too much for the items we buy. Since 1990, spending is up 30% and debt is up an astounding 80%. What this tells us is, the average consumer is not only buying more but putting much more of a strain on their parcheck, forcing most to overextend themselves with their credit cards.

To become a savvy shopper takes more than just knowing where the best deals are. You need to develop a new attitude. A new way of doing things. This new attitude must become a way of life. If you fall back into your old way of shopping, you run the risk of becoming a bad statistic. The average revolving credit card bill for Americans now stands at over $8500 and shows no signs of letting up. This is not the direction a good money saver should be moving towards.

Finding the best deals takes patience, good timing, and lots of prudent research. Just like saving for retirement or picking stocks, learning how to become a great shopper takes commitment and organization. When you are organized, you are better prepared to spend wisely.

Shoppers are not born, they are made. This holds true no matter how much you make or where you work. It takes understanding of how stores are laid out, how sales are set, and what tricks marketers use to lure you in and close the sale.

Most consumers are in the dark when it comes to how manufacturers think. If you think like a marketer, you will be able to buy with confidence because you have the inside information that can aid you in getting a better deal.

A thrifty person is not someone who buys on impulse but rather, knows how much they have to spend, how much they can spend, and whether spending the money now is a wise choice or not. Impulse buying is the bane of every intelligent shopper but one that all of us have done at one time or another.

A savvy shopper uses all the tools available to them and makes their decision based on information provided by those tools. These tools can aid in overcoming the relentless hard sell that marketers rely on to make you buy.

Whenever you go out to shop, whether it is to your local mall, the supermarket, or online, there are rules that must be followed in order to get the most value for the least amount of money.

Here are five ways to stay within budget and still get value.

1- Always make a list. Know what you want to buy beforehand.

2- Shop and compare prices and terms before you buy. Remember, the first price you see is not always the best. Use it as a starting point and a guide.

3- Stick to an amount you are willing to spend and don’t go over. This will save your pocketbook unneeded grief when the credit card bill comes in.

4- Ask yourself if you can live without the item. Don’t fall into the habit of rewarding yourself with an item because you’ve worked hard or you’ve been a good person lately. Excuses don’t pay bills.

5- Keep a price book with you at all times and use it as a guide to get the best price.

Shopping doesn’t have to be a chore if you prepare yourself beforehand and organize your priorities. If you can do this, you will succeed at becoming a saving money expert.

Money Saving Tips. Maximize Savings on Everyday Items!

Frugal living is more than a lifestyle. It’s a passion.
Call Me Crazy! I love It!

Why, who wouldn’t love getting paid to buy products that they use everyday?

Here’s how I do it.

I purchase an item that has a rebate offer (either a store or manufacturer rebate) while it is on sale and use a coupon during purchase. That’s it!
Using this formula I almost always come out ahead. When all is done, I’ve gotten back more than I actually paid for the item.

Even when I do have to pay for the items like deodorant, shampoo, soap, toothpaste, and toothbrushes it’s about 50 cents for a item that would cost up to $2 -$4 originally.

Am I the only one out there that gets excited about this?
I doubt it! At least I hope not. That would make me “Crazy”, wouldn’t it? But a lot of folks just don’t know how to combine money saving measures to maximize savings.

My local drugstore (which by the way is a national chain) often advertises items free after rebate. Hey, that cuts down on a lot of work for me. Easy Money! I e an also lucky enough to have a grocery store in my area that offers rebates and offers double coupons (sometimes even doubling $1 coupons as a special promotion). Needless to say, with six mouths to feed (myself, my husband, and four kids) I’m lovin’ that idea!

As the editor of http://www.simpledebtfreeliving.com, I’m always looking for new ways to save money. Visit us and follow one of the e-mail links to share your ideas or just let us know how excited you get about frugal living! Let me know I’m not the only one. Then we can put my family’s worries to rest. They think I’m really crazy.

Here are a couple other ways that I save on items we use everyday:

1. Always use items that are reusable rather than throw away

For example: Reusable coffee filters, cups and plates, and my favorite pet peeve –

The great sandwich bag conspiracy

The major manufacturers of sandwich bags would lead us to believe that it takes rocket science to keep a sandwich fresh. Ask yourself this, How long do you need to keep that sandwich fresh anyway? It’s not like it’s going to the moon. It’s just going to the office or school for a few hours.

The most practical way to approach this is to purchase reusable sandwich size containers. This is also very environmentally friendly reducing a great deal of waste. If however, these have trouble finding there way back home ( which is likely if you have children), you can save substantially if you purchase the plain old pleated sandwich bag that cost a mere fraction of the razzle dazzle zipper kind. Your mother used these for years and years with great success. I have used both methods for years and have never received a complaint of a stale sandwich!

You’ll find that doing these little things like, using real cups and plates instead of paper or plastic throw away, and recycling containers for storage or even to use in craft projects, can save a lot of money. Each by itself may seem minor, but when put together amount to tremendous savings over time.

2. Don’t buy it if you won’t use it. Things like small kitchen appliances, repair tools, and gardening tools are good examples. We know they’ll make our life easier if we just had the opportunity to use them.

There are 101+ small countertop kitchen appliances available to chop it, grind it, mix it, open it, bake it, grill it..well you get the message.

Simplify your life and narrow it down to a couple you just can’t live without. For me it’s my blender and my food processor. Although, I’m seriously considering a bread maker. Not quite sure if it’s worth the money yet. Especially when I’m so close to a bread outlet. But, you can’t beat the taste of fresh baked bread. I’m not counting the coffer maker it’s kind of standard equipment these days. I wouldn?t dare ask you to give that up! What am I crazy? Well , maybe..

It’s little things like the example above that identify frugal living.

3. Always get the best value for your money. Shop around. If this is a major purchase you will want to know what to look for. Research and compare products on the internet or in sale flyers. There’s nothing more challenging to the retailer than an informed consumer. That’s what you want to be. An informed consumer knows when it’s a good value! Informed Consumer – More Savings

10 Steps To Improve Your Financial Situation

Here are ten steps you can follow to help improve your personal financial situation and inevitably save more money:

1. Pay Yourself Weekly

This may seem a bit odd, but this is an excellent way to start building a substantial savings. On a weekly basis, pay yourself $25-$50 and immediately put it in a safe place. You can even open a special savings account where this weekly “payday” can by placed to help minimize or eliminate impulsive spending. Think about it this way, if you paid yourself $25 a week, in two years you’ll have accumulated $2600 (not including interest)!!! That’s almost $3000 from just putting $25 aside every week! Take advantage of this money-saving opportunity. Simple, yet very effective.

2. Don’t Shop

For those of you that love to shop, you may find that this is one tip that could save you hundreds, maybe even thousands every year. Start using the “Need or Want” strategy. Before you spend a single dollar on anything, ask yourself, “Do I really NEED this item, or do I just WANT it??” You may find that many of the items we purchase, we do so just because it “caught our eye” or it was “an impulse buy” or “my friend bought the same thing”. All these excuses just add up to wasteful spending. You can probably get by without another sweater, or a new pair of jeans, so just buy what you absolutely need, and pass on those items that aren’t necessities.

3. Use Your Bank’s Own ATMs

Some banks will charge you money for using other ATM machines. Even though you will be able to withdraw money using your ATM/debit card from literally any machine, banks will charge you $2 (generally) for using a machine other than theirs, in addition to a standard $1.50 charge the machine charges for its use. In other words, if you use the ATM at your local 7-11 to take out $20, you’ll most likely end up paying $3.50 in additional charges! If you do that 5 times a month, you’ll lose $17.50 for that month, or $210 per year! What a waste! Try and stick with your own bank’s ATMs whenever possible.

4. Track Your Spending

Take the time to track your spending habits for one week. Take note of every single dollar you spend, even those sodas and candy bars purchased here and there. This will give you a “birds-eye” view of exactly where your money is being spent, thus allowing you to refine your spending habits to essentially save more money.

5. Lower Credit Card Balances

Another very important tip that many often overlook. Pay off those pesky credit cards as soon as possible because you are losing up to 19% of the total. What a waste of your hard earned money! Keep chopping away at the balances until you get to an amount that is reasonable $100-$500 dollars.

6. Use Your Debit Card Instead of Credit Cards

Get in the habit of using your debit card instead of your credit cards. For the most part, debit cards are accepted anywhere a credit card is accepted, however as you know, with a debit card the amount is taken directly from your checking account whereas credit card usage is billed at a later date (along with a hefty interest rate).

7. Changing Jobs? Roll-Over that 401(k)

When people change jobs/careers they will be faced with a decision to either “rollover” their 401k (retirement plan) or to withdraw it. It will be ever so tempting to withdraw the money since it will be a substantial amount, but don’t! You will be charged fines and penalties for an early withdrawal that will cut YOUR total by 40%-60%! That’s like giving half of your earned retirement savings away to a stranger. Why would you do that? Even though you may want the money now, resist the temptation and roll it over. It will be well worth it in the long run.

8. Avoid Getting Too Many Credit Cards

Why have eight credit cards? That’s just going to provide you with more opportunities to go further into debt. It’s fine to keep 1-3 cards to build credit, establish yourself, and for emergencies, but credit cards are double-edged swords. They can help or hurt you depending on your self-control.

9. Check Your Credit Score/Report

It’s important to know where you currently stand as a consumer and since your credit report is the most important historical list of your financial past and present, it’s a very good idea to check it from time to time. There are a number of places where you can get your credit report, however the most detailed compares information from the top three national credit bureaus: Experian, Equifax, and TransUnion. Once you get your report, look through it carefully to see if all the information is accurate. If there are any discrepancies, get those solved as quickly as possible to improve your credit rating – a score of up to 800. Often times, consumers are unaware of unsettled accounts, or accounts that are still open/active when they should be closed. Pay close attention to this when inspecting your report.

10. Finally: Review – Revise – Retry

Once you start implementing these tips and become more familiar with the money saving opportunities you have, take the time to REVIEW your progress. Check and see where it may be possible to REVISE some of your techniques or where you can implement new ones. Once you have revised your plan, RETRY to see if your results improve. The more frequent you review, revise, and retry your saving ideas, the more “in tune” you’ll be with your finances and spending habits, and learn what works and what doesn’t for you.

3 Steps To Saving More Money

Saving money is not easy and is made more difficult if you have a short-term outlook regarding your personal finances. If, like many people, you are living from one pay cheque to the next, it is difficult to put some money aside for a rainy day or for a summer holiday. But what if you were to change your financial outlook into a medium to long-term one? You might believe that you cannot afford to think ahead and make plans, but in most cases you would be wrong. Most people should be able to save some money and with some effort, maybe even as much as 20 percent of their salary each month.

Step 1 – Income Analysis

First of all it is important to have a handle on where your income is going. Unless, we are on an extremely tight budget or are very money conscious for other reasons, many of us have never really sat down and considered what our money is being spent on – we just know that by the end of the month, it has all gone! You will know if you are consistently spending your money on unnecessary purchases, for example. Having this knowledge equips you with the control to change things a little or a lot.

Step 2 – Saving Money Mentality

Many people have never been taught to save and as children, immediately spent the money they received without any forethought. You often hear people say, “Life is short, if you want something buy it now”, but thankfully for most of us life is not really so short and along the way we will have to deal with both opportunities and challenges. Having some money saved will help you make the most of the opportunities and ride the challenges.

Step 3 – Savings – Seeing the Big Picture

If you could save 20 percent of your salary each month, imagine what that would mean in real financial terms. For example, if you earn 2000 dollars per month and you saved 20 percent or 400 dollars out of every pay cheque, after 12 months you will have saved 4800 dollars! Regularly saving this amount of money would give you the financial freedom to take advantage of more of life’s opportunities. You could plan the special holiday you have always wanted to go on, buy the car that you have been dreaming about for years, or help put a child through college. When it comes to life’s challenges, having a lump sum put away could help you pay for private medical care or deal with an expensive plumbing problem in the home, all without having to turn to the bank for a loan and getting into debt.

Now Do Something Special or Pay Off That Debt!

As we have already seen, knowing exactly where your money is going is the starting point. Next, start thinking about the big things you could achieve with some money in the bank. Some people compensate themselves for not having what they really want, by making many frequent small purchases and getting a temporary “feel good” sensation afterwards. Rather than satisfying yourself with small purchases, such as new clothes and CDs every week or always buying the latest mobile phone, think about how much more satisfying it would be to save up and buy or do something special like going on holiday or important like paying off a debt. You can now do something which you previously thought was out of your reach, but is achievable with a little effort.

Emmanuel Mendonca is the webmaster of Living and Working in Greece at [http://www.living-and-working-in-greece.com] the site for people who are thinking about moving to Greece and those who are already living and working in Greece. Contains articles about living and working here, information about expatriot groups for foreigners in Greece, and has interesting advertising opportunities for people who have businesses and products that might interest expats in Greece.