Budgeting - isn't it time you started?
This week we share an article from well known Australian television presenter, radio presenter, financial analyst, financial advisor and publisher Paul Clithero; we couldn't agree more with Paul's message that budgeting is essential and it can begin with the simple step of calling us for a discussion!
If your pay packet doesn’t seem to stretch as far these days, you’re probably not imagining things. Wages are growing by a record low of just 1.9% annually, and with inflation also running at 1.9%, the purchasing power of your pay cheque may not have increased at all.
At times like these, it’s important to make your money stretch further. Right now, household incomes are flat-lining, and making every dollar work hard is essential. It can even see you forge ahead financially despite wage and salary growth being stuck in neutral. In the current environment, reviewing your household budget is a must-do. Yes, I know my mantra is “budget, budget, budget” but it’s a great way to ensure you are living within your means rather than relying on debt to maintain your lifestyle.
Your financial advisor can help you develop a budget, or guide you through the process of fine-tuning your household budget to reflect any recent changes to your circumstances. It’s also important to shop around for major expenses. When your car or home and contents cover falls due for instance, don’t just pay the premium. Take a look and see if you could do better elsewhere. A colleague of mine recently knocked $200 off her annual car insurance premium just by switching to a more affordable insurer.
Power bills are one area where many of us are feeling the financial heat. According to Finder, 1.4 million households often struggle to pay their energy bills. Switching energy providers can provide savings.
I realise that the sheer volume of comparison sites like GoSwitch or Energy Made Easy don’t always make it easy to know which provider offers the best deal. However, by looking back over previous power bills you should be able to form a reasonable picture of your usage patterns. Use this to narrow down the plan best suited to your needs and budget. Don’t overlook financial products. Fortunately, low wages growth is coinciding with historically low home loan interest rates. But credit card rates can still exceed 20%, and on the average card debt of $3,100 you could be paying interest of more than $600 annually. Yet this cost can potentially be halved by switching to a lower rate card. A balance transfer deal can help to knock off card debt if you knuckle down to pay off the balance during the zero or low interest period.
The catch is that high rates can apply to new purchases, so the success of a balance transfer can hinge on sticking with your budget rather than relying on cards to pay for everyday expenses.
In fact, in today’s environment of low wage growth it can pay to be careful about taking on more debt. A rise in interest rates could leave you financially skewered. Paying with cash where possible has far less impact on our financial well-being, especially when it’s part of a sensible budget. If you’re wage or salary is stagnating, your financial advisor is well-placed to guide you through the process of making your money work harder. ting your post here. You can insert images and videos by clicking on the icons above.
For a confidential discussion with a financial adviser about budgeting, please contact us on 03 9935 5233 or
Our offices are centrally located at Normanby Chambers, 430 Little Collins Street in Melbourne CBD.
This information may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant project disclosure statement before making any decision to purchase that financial product.
Source of article: www.ipac.com.au/Navigating-low-wages-growth#sthash.2d79vDOc.dpbs Source of image: www.demontfortsu.com/news/article/6052/Budgeting/