Both the hubby and I are in industry super funds which we find have lower fees and higher growth than retail funds. We’ve both had both, and much prefer the one’s we’re in now.

Still, I was relieved to find a loss for the year of 3.95%. I have heard of some super funds losing 18%. As super is the main retirement vehicle of many Australians, that will have some long term impact in terms of people staying longer in the workforce, and more people relying on pension payments in their retirement.

It pays to read your super statement carefully. These are the things I do when reading through my annual statement:

1. Check the payments into the fund. Sure, it’s compulsary to make payments into your fund, but some employers get slack, or lazy. Make sure your payments are going in.
2. Check the fees deducted. My fees for this year were $60.95, which isn’t too bad in the grand scheme of things. Less than 1% of my balance.
3. Check your insurance coverage. Do you have too much? Or too little? Our funds now offer Income Protection Insurance, but check the details carefully - some only pay for two years.
4. Assess your asset allocation. Are you spooked by the volatility lately? Getting older and not sure the growth/high risk options are right for you anymore? Now is the time to take a closer look. I looked at mine and decided that based on my age and the severe LACK of money in there, that I could probably stand to take on more risk. I note that despite the last year my average return for 10 years has been over 10%.
5. Decide whether you’re happy with your fund. With super choice most people can have their payments made to their choice of super funds. Take a look at the aspects above, and see if your fund is meeting your needs. If not, have a look around for an alternative.

Have you got your super statement yet? Were you happy with your funds performance?

Source: Flickr

Every Friday I sit down and attack the paperwork that has piled up on my desk through the week. Mail, catalogues, magazines, bills, printouts, kids drawings, notes from daycare, serviettes with email addresses and phone numbers on them.

Since we get paid on Friday, and I’m of the “if it’s in the bank I can spend it” mindset, Friday works out the best day for me to pay the bills. The sooner the money is gone from my account the less likely I am to spend it, and thus get behind on my bills.

I’d like to say that my desk looks like that when I pay my bills but in reality it’s a mess of papers that I try and sort into some kind of order. I usually work on 3 piles: to file, to pay, to do. The to file and to pay piles a self explanatory. The to do pile is things I need to do something with. Cheques to be banked, statements to chase up, forms to be filled in. I try and do this pile as soon as I can, but it doesn’t often work out and some things can sit there for months.

But after today, it’s nice to know all the bills are up to date at least. Now if someone could just file the filing pile for me, my desk would be looking halfway decent. No? Oh well, it shouldn’t take me long.

While this is undoubtably good for those who would likely have been slugged with the charge (and incidentally, unless you fill out a special form advising your employer to take out extra tax you will be slugged with the 1% in the form of a tax bill at the end of the financial year - yes, we’ve been caught out), it leaves me with a bit of a dilemma.

Earlier this year we took out private hospital and extras cover as we were going to be walking a very fine line around the $100,000 mark this financial year and I didn’t want to be caught out - a $1,000 bill is not what I like to see at the end of the financial year. Now, having paid out $1620 in private health cover in anticipation (although not that much in hospital cover) I’m left wondering if it was worth it, and how long, given the state of the economy, I can afford to carry that cost.

To be honest, I didn’t consider leaving until I heard talk on the radio of premiums potentially rising 30% - particularly in light of the losses health funds have undoubtably felt with volatile investment markets and the andticpated loss of 492,000 members. In December 2005 approximately 10.12 million Australians were covered - just shy of 50%. A loss of the premiums for 1/10 of the health funds premiums combined with investment losses does not bode well for health insurers.

I wonder when we’ll see a “private health fund bailout”?

The question is what do you do now? Do you lower your repayments on your mortgage? Or keep them at your current level? Is it worth it?

The difference it will make to a morgage payment is $17 a month per $100,000 of mortgage (so if you have a $200k mortgage it’s $34 a month). The average mortgage of $250k will have the repayments reduced by $42 a month. Will $10.50 make a difference to your weekly budget? If you’re truly struggling it might. If you’re coping well with increased interest rates, fuel, food and all the other expenses that continue to rise, is it worth it to pay the extra off your mortgage?

On a $250k mortgage at 7% for 25 years, that extra $10.50 a week will save you 1 year and 5 months, and nearly $20k in interest. On a 30 year mortgage it will save 2 years and 3 months and over $32k in interest.

Ultimately what you do is up to you, but if you don’t need that $10 a week you may be better off leaving your repayments as they are.

Our loan is hovering around $84k at the moment, so the $4 a week we would save by lowering our repayments wouldn’t do much for us even if we were struggling.

The Reserve Bank’s meeting this Tuesday is expected to cut rates, and now several lenders have promised to pass on any cut in official interest rates.

Mr Bouris, Chairman of Wizard Home Loans said:

“It’s a risk,… while [other banks] were very quick to hike their rates independently to the RBA when funding costs were increasing earlier this year, they are now just stalling - waiting until an announcement by the RBA.”

Which begs the question, will wizard also drop their rates by the same amount as any cut on Tuesday? Or will it claim this as its cut, running the risk of appearing hypocritical.

This news is good for homeowners, but not so much for savers. While several banks have passed on interest rate rises as higher rates on savings accounts, they seem to be quick to cut them alongside Reserve Bank cuts, while rising loan rates independent of official rises and not raising savings rates. And it seems that this trend is set to continue with at least one bank already cutting fixed interest savings accounts in the last week.

On a personal note, I’m looking forward to any rate cut, as that will help us pay our mortgage on our block of land off quicker. We also have an offset situation, and redraw, so all our surplus funds sit there saving us interest every day.

What are your thoughts? Do you have mortgages or savings? Are you looking forward to rate cuts?

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.

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.

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?

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?

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.