Money

Getting your finances in shape

If you’re concerned about rising living costs in 2012, it’s worth embarking on a savings plan.
If you’re concerned about rising living costs in 2012, it’s worth embarking on a savings plan.

A NEW Year provides the incentive to sweep a new broom through many areas of our lives, and there's no better place to start than with your household finances.

Kick off a personal money makeover by listing your assets - things of value you own like your house, savings and investments. Then compare this to your liabilities - your mortgage, personal loan, car loan and credit card debt.

If your assets are worth substantially more than your liabilities give yourself a pat on the back, you're on the way to achieving financial security. But if your liabilities are close to, or overtaking your assets it's time to get serious about bringing debt under control.

Your home loan is likely to be your biggest debt, and while it's backed by a property that should grow in value over the long term, it's still important to look at ways to cut the cost.

You can save substantial amounts of interest by shopping around for the most competitive home loan, and switching to it - but do check what switching fees might apply first. Some of the best rates at present include UBank (6.14% for refinancers), eMoney (6.33%) or MyRate (6.35%).

Next, take a look at your credit card balance. Despite two cuts to official interest rates late last year, card rates remain very high, averaging 19% on premium/gold cards or about 15% for standard cards. At this level, even a small card balance could generate a substantial annual interest bill.

There are more than 100 different balance transfer offers available, each charging very low rates for limited periods. However I reckon simply knuckling down to pay more off your card each month is a far easier, and potentially more effective solution.

Making a commitment to pay an extra $20, $50 or $100 off your card each month will see you clear your card balance ahead of schedule, with big savings on interest in the process. Avoid taking on fresh debt by leaving your credit card at home and using a debit card when you go shopping.

If you're concerned about rising living costs in 2012, it's worth embarking on a savings plan. Having a pool of spare cash makes it far easier to meet regular bills or even emergency expenses when they arise. 

Setting up a regular automatic transfer from your everyday account into a high interest savings account makes it easy to stick with a savings goal. Find the extra cash by drawing up a household spending budget, or keep a spending diary for a week to see exactly where your money is going and where you can cut back.

Next, give your personal insurances a thorough check. It's important that your most valuable assets like your home, its contents and your car are adequately protected by a competitively priced policy. If you have undertaken any home improvements in 2011, update the insured value of your home. It should involve only a small increase in the annual premium.

Finally, take the time to work out a couple of few simple goals for 2012. Something as easy as setting up a savings account for the kids or hunting down any lost super can make a big difference to your family's financial wellbeing over the coming year and beyond.

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. For more information visit www.paulsmoney.com.au

Topics:  finances investment money paul clitheroe



Keeping up with an ageing population

Forum presenter, Aged Communications Consultant, Glen Sorensen.

New reforms for aged care service providers

Coast Rd traffic light stoush ahead of meeting

Aerial shot looking south from Skennars Head towards Ballina.
Photo The Northern Star Archives

Future of picturesque farm up for discussion

Grow your own dwarf citrus trees

There's a new meyer lemon called Lemonicious that produces lots of tangy, juicy fruit, has glossy green leaves and also beautifully-perfumed white flowers in spring. Plus it grows to a very manageable 1m when planted in a pot.

Tips and picks from gardening expert Angie Thomas

Local Partners

Pencil in annual leave: Jetstar flights sale on now

YOU can book a return flight to popular holiday hotspots right across the network and fly home for free, paying only for the departing flight on a return trip.


First female superhero film in 12 years

AMAZON: Actress Gal Gadot in a scene from the film Wonder Woman.

Wonder Woman opens next Thursday

Stories Troy Cassar-Daley carries around

LEGEND: Troy Cassar-Daley after receiving the Golden Guitar Award for Album of the Year during the Tamworth Country Music Festival in January.

You can see him in Ballina this weekend

What to expect at Birds of Tokyo's Ipswich gig

The band will perform at the Racehorse Hotel on Friday.

BAND member Glen Sarangapany talks music, pub grub and doing shoeys

19 dead, 50 injured in Ariana Grande 'terror attack'

NINETEEN people have been killed and at least 50 people have been injured following a terror attack in Manchester

Pitch Perfect star suing Woman’s Day over ‘liar’ articles

Actor Rebel Wilson outside court on Friday.

REBEL Wilson's career destroyed by grubby campaign, court hears.

First female superhero film in 12 years

AMAZON: Actress Gal Gadot in a scene from the film Wonder Woman.

Wonder Woman opens next Thursday

Seven Year Switch: The boner to end all boners

Johnny’s outraged over claims he has a cracked boner.

She gulps. Her face says it all.

Bay to star in Hollywood shark thriller ‘Cage Dive’

Cage Dive, written and directed by Gerald Rascionato, is now screening in the United States of America. It had scenes filmed in Hervey Bay.

And our visiting humpback whales also make appearance.

Celebrity sex tapes: Where does all that money go?

Basically, did Paris and Kim earn fortunes from their videos?

Stories Troy Cassar-Daley carries around

LEGEND: Troy Cassar-Daley after receiving the Golden Guitar Award for Album of the Year during the Tamworth Country Music Festival in January.

You can see him in Ballina this weekend

One of Maryborough's most historic homes is still for sale

FULL OF HISTORY: Trisha Moulds is owner of the historic Tinana state known as Rosehill. The beautiful home is currently for sale.

It has been the scene of both joy and tragedies over the years.

The face of the Sunshine Coast's overpriced rental crisis

Alyx Wilson had to rent a $385 unit in Currimundi because the market was too competitive for cheaper rental housing. She is now renting a room from friends who own a house in Currimundi, and says its much more affordable.

Young people feel the strain in competitive, expensive rental market

WATCH: Take a tour of a tradie's dream home

5a Bruce Hiskens Court, Norman Gardens, going for $720,000. INSET: Lea Taylor.

Huge block with potential for anything

REVEALED: Where it's cheaper to pay off a mortgage than rent

6/190 Ewing Rd, Woodridge, is listed for offers $215,000. Picture: realestate.com.au

Brisbane suburbs where it is cheaper to buy than rent

The hardest place in the state to find a rental property

RENTAL SHORTAGE: Richmond River, Ballina Bar Emigrant Creek Pacific Highway Teven Interchange. Photo Jay Cronan / The Northern Star

Not enough supply to meet insatiable demand

Ready to SELL your property?

Post Your Ad Here!