Kin’s Money

This week the National Australia Bank (NAB) have committed to matching any cut in official interest rates next month. So far they are the only bank to do so, despite continued warnings from the government. Apparently the banks see the government as a toothless tiger in this scenario, and feel (probably quite rightly) that there is nothing the government could actually do that would encourage them to follow the NAB’s lead.

If your bank does pass on any interest rate cuts made next month, it is important to remember that those cuts will not necessarily pass on to you unless you ask for it. From the Canberra Times today:

MORTGAGE holders struggling with the rising cost of living will have to apply individually to their bank to have their repayments reduced, even if the lender passes on an interest rate cut.

This is because most Australian mortgage holders choose to make repayments in excess of the minimum required and these repayments do not automatically change when interest rates do.

So if you’re holding your breath for next months expected interest rate cut, remember to contact your bank and apply to reduce your repayment. Or, you could leave your repayments as they are, and simply pay off your loan quicker.

Popularity: 8% [?]

Personal Finance is not like an event at the Olympics. When trying to connect the two, I could only think about the process a city goes through in hosting the Olympics. It is not an event you can train for for 4 years, and is over in 10 seconds, 15 minutes, or even a couple of hours. It is a process that can take many years. And I thought about personal finance in relation to the 2024 Games in Brisbane (yet to be determined )

1. Initial Decision - Brisbane has not yet taken the decision to apply for the 2024 Olympics. Just as many people have not yet made the decision to master their personal finances.
2. Investigation - For Brisbane this means determining what will be required to apply for the games, and what will be needed to host the games. Investigating your personal finances is the first step to mastering them. What is the situation? Is it dire? Good? If you don’t know, you have nothing to work with.
3. Making a plan - When Brisbane has decided what is needed to apply for and host the games, it can begin to make a plan for the bidding, and hosting of the games. When you know the state of your personal finances, you can draw up a plan for how you’re going to master them. This may include a budget, a savings plan, a retirement plan, an investment plan. Remember too that these plans are not set in stone.
4. Set the plan in motion - at this point it’s worth noting that the 2024 games host city will not be decided until 2017. That’s right, 9 years from now. Personal finance is not a sprint! By beginning to act on the plan now, Brisbane will have 9 years to determine if the plan is working, and what needs to change for it to work properly. If your budget is not working, change it! Only by acting on the plan can you see its effectiveness. And don’t get too attached to the plan that you’re not open to change. Brisbane may find in a couple of years that they won’t be ready for the 2024 games, and decide instead to try for the 2028 games.
5. Be open to change - Just as the host of the 2024 games is not yet set, your plans are not set in stone. Priorities change, your situation changes. Interest rates go up, or down, food prices go up, fuel goes up. A budget is not a pice of paper, but a living idea. Some people budget each pay, each month. Don’t be afraid to change your plan.
6. Set targets along the way - Clearly 16 years away is a long time, if Brisbane doesn’t measure how they’re going in that time they won’t know if they’re on target. Similarly, unless you have shorter and medium term goals, you won’t be able to measure your success.
7. Enjoy the journey - That may sound like a bit of a dumb thing to say about personal finance, but like life, financial management is a journey, not a destination. If it was all work and no fun, no one would want to host the Olympics. Think of ways to make it fun - reward yourself, share the load, get the family involved.

Popularity: 21% [?]

One of the nicest things about having a financial year that starts in July is the impotus to take stock of your financial situation halfway through the year. If you set financial goals at the begining of the year, now is the perfect time to take another look and see what’s working, what’s not, and how to fix it.

For most of us, tax cuts have kicked in this month, giving most people $10 - $20 extra a week in their take home pays. If you’re lucky you might have even scored a pay rise if you had a performance review last month.

Here are 5 things I do to take stock of my finances at the start of the new financial year:

1. Check the new tax tables at the ATO website to make sure the correct amount of tax is being taken out each pay.
2. Check your payslip and make sure any pay rises and tax are correct (while you’re there, make sure your annual leave is accruing at the correct rate).
3. Take a look at your budget/spending plan if you have one, and see what is working, and what isn’t (I’ll be writing a bit more on this over the next few weeks). Make a plan of attack to stay on track with your goals. If you don’t have one, think about creating one!
4. Start a folder to collect information you need for your tax return (PAYG Summaries, HELP/HECS statements, deductions reciepts, super statements etc).
5. Take a look at your financial goals for the year. Are you on track? Close? Nowhere near? Do you need to rethink them? Have your priorities changed? Have interest rate rises and increasing fuel and food costs been included? How is this impacting you achieving your goals? If you didn’t set any financial goals for this year - NOW is the perfect time to set some. Do you want to take a holiday over Christmas? Save $500 by the end of the year to pay for Christmas? Pay of a debt? Pay an extra repayment on your mortgage? Write it down and write a plan of attack to achieve it.

You should now at least have a better idea of where your finances are at than you did yesterday. Some of these can take a fair bit of time (like creating a budget) but others take only a few minutes and are the first step to staying on top of everything.

Is there anything in particular you do at the start of the financial year to stay ahead of the game?

Popularity: 66% [?]

Welcome to a new financial year. As with any new year, the world is before you. Endless possibilities, and dreams of making millions. Well, at least having more money in the bank in 12 months time than you do now.

Fortunately, we’re given the perfect opportunity to make a start by being able to submit our tax returns and get a nice little boost to start us off.

Over the last few years the tax office has taken to the internet with gusto, and E-Tax has made getting your tax done, submitted and returned easier and saved plenty of trees at the same time.

E-Tax is a program downloaded to your computer where you enter your information and submit it electronically to the tax office. For the vast majority of tax payers who have simple returns, E-tax saves time and generally your return is completed within 14 days.

Who can lodge a return through E-Tax?

According to the ATO, anyone who has:

• lodged a tax return for any of the previous five years (2003 to 2007)
• lodged a refund of franking credits application for any of the previous five years (2003 to 2007), or
• lodged a baby bonus claim for any of the previous five years (2003 to 2007)

is able to use E-Tax to submit their return to the ATO electronically. If you do not fall into one of those categories you can still use E-Tax to complete your return and print the relevant pages, sign them and post them to the ATO with any relevant documentation.

What are the benefits of using E-Tax?

Personally, I find many benefits to using E-Tax. Here are just a few:

1. Able to work on our returns in dribs and drabs as the information arrives. I can save E-Tax and next time I log in I can see where I got up to and what I still need to fill in. This is far better than waiting until all the information has arrived and putting it off because it’s such a big job and leaving it til the last minute!
2. Ability to show an estimated return. This is especially handy if you have a vague idea of how much you expect your return to be. It’s like in maths if you know the answer you can figure out how to get there - using E-Tax you can pick up errors in what you’ve entered by looking at the estimate to see if it’s where you expect it to be or not.
3. Less paperwork. While you still need to keep records of your income and deductions claims, by submitting your return electronically you are not required to send them in, saving time and paper by not having to arrange copying of all your claims.

How does E-Tax work?

E-Tax is a software program you download to your computer. You can then open and work in E-Tax offline and submit it electronically. From the ATO  “The e-tax lodgment process uses a secure sockets layer (SSL) session to prevent unauthorised access during transmission over the internet to the Tax Office. ”

Where do I get it?

E-Tax can be downloaded here from the ATO. Make sure to check system requirements and read the instructions before you get started. The instructions are comprehensive and I find them easy to follow.

What next?

If you do your returns yourself, E-Tax can be a simple way to work on and submit your tax. Remember, the sooner you get it done, the sooner you can get your return. After all, isn’t it better in your bank than theirs?

What about you? Do you use E-Tax? Do you find it easy? Difficult? Time consuming? Easier to pay someone to do it?

Popularity: 85% [?]

Hi, and welcome to Kin’s Money.

When I first started blogging back in June last year, I went on the hunt for blogs about personal finance, budgeting, investing or just plain old “money management”. I found dozens of them; some of my favourites are listed there in the sidebar. But one thing I noticed was that virtually all of them were geared specifically for US readers. Now I know the basic principles of good financial management are the same no matter which country you happen to reside in, and over the last 9 months I’ve learned more than I ever thought possible about 401k’s, Roth IRA’s and the crazy thing that is the US tax system (and I thought the Australian system was complicated – I now appreciate its simplicity), there are just some things that are specific to the country you live in.

For example with all the talk lately about a potential/probable/already here US recession, the opposite is true here in Australia. Our economy is still booming. We have full employment. We also have an inflation problem and rising interest rates compared to the US’s falling interest rates. So while US mortgage holders are contemplating the potential benefits of refinancing to a lower rate, Australian’s are locking their interest rates for varying terms of 2-5 years.

What I’m getting at is that economic conditions are different, and that will change the way you look at your finances, what action you take, and often the risks you are prepared to take.

Now for the disclaimer:

I have a Business degree in Business Management. That means I have no qualifications to give any financial advice. Anything I write is purely my own opinion based on my own research. I strongly recommend you run any investment/tax saving/change to your strategy past a relevant financial advisor, accountant and probably solicitor.

What do I envisage for Kin’s Money?

I see Kin’s Money as a vehicle for sharing my passion about personal finance. I see a resource of information for those who don’t share my passion, but are aware of its importance. I see Kin’s Money as a way of sharing my own financial journey, ups and downs, and decisions. I would like to see guest posters sharing their journeys and decisions.

Initially I don’t expect to be posting daily. My initial plan is 2-3 times a week. This may, of course, change at any time, especially if I come across something newsworthy to share. Ultimately I hope to be posting every day to this blog, but that may take some time to build up to.

What will I write about at Kin’s Money?

Some of the topics I hope to cover here on this blog are; insurance, superannuation, budgeting, frugality/saving money, financial planning, financial news, investing, mortgages and financial education in schools.

As you can see there is a wide range of topics I hope to get to. There are a lot of aspects to sound financial management.

How can I contribute to Kin’s Money?

If you would like to guest post on a topic, please contact me through the contact page above. Especially if you have a passion for one of the topics mentioned above. You might have a financial experience to share (good or bad). You may just want to share a part of your financial journey.

If you have a topic that you’re struggling with, or need more information on, I do take requests. Again, contact me through the contact form above.

But the easiest way to contribute to Kin’s Money is to leave a comment. Comments are great for providing feedback, sharing a story, anecdote, or asking a question. It’ll help me figure out what to write about (what you want to read about) and whether or not what I’m writing is useful for anyone.

Don’t be shy about firing me off an email if you don’t want to leave a comment. I love getting email (don’t we all?).

So welcome, and thank you for sharing this financial journey with me.

Popularity: 100% [?]