Category: Money Matters
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Sub category: Spending
28 October 2014

Fearless finances: 4 tips to help reduce your money worries

Never mind feeling spooked on Halloween, sometimes day-to-day financial challenges can be all it takes to see your stress levels soaring.

Sound like a familiar scenario? Here are some quick tips to help combat some common financial fears:

1. How am I going to make my pay last until payday?

There’s nothing quite like that sinking feeling when you realise you’re almost out of money and it’s not even close to payday yet. If this happens on a regular basis you could find yourself even more out of pocket as time goes on.

  • Look at your spending history for the past quarter so you can build up a picture of where your money is going. List which items could be deemed essential spending and which could be categorised as luxury items.
  • Make a commitment to yourself to think twice before handing over your card for those spontaneous purchases.
  • If you’re a smartphone user, download your banking app to help keep your finances front of mind, and get in the habit of checking your balance regularly.
  • To help with budgeting, consider scheduling direct debits to come out just after you get paid so your essential payments are taken care of straight away.
  • You may find it easier to transfer a set amount of spending money into a separate everyday account, so you know exactly how much money you have for day-to-day purchases.

2. Will I have enough to retire on?

Australians have increasing confidence in the superannuation system, according to the ING DIRECT/Financial Services Council Superannuation Sentiment Index (2014), but 52% are still concerned they won’t have enough to fund their retirement.

  • Start taking control of your super by reading your annual super statement. Check your balance, fund performance as well as any fees you’re paying for.
  • retirement planning calculator can help you determine how much you should be aiming to accumulate, and compare how you’re tracking against plan.
  • Found yourself with a shortfall? There are things you can do to improve the state of your super.  Fees can have a huge impact on your super balance – shop around for a low fee account which offers value for money.
  • Consider consolidating multiple funds into just the one, to make it easier to manage as well as minimise paying fees on more than one account.
  • If you are in a position to do so, you may also like to make additional contributions to your super to help boost your balance. If you need help, consider speaking to a financial adviser for advice tailored to your personal circumstances.

3. Is now the right time to buy a property?

While buying a home is on the wish list of many Australians at some stage in their life, there are many variables which can influence whether the timing is right to do so.

  • Firstly, consider the upfront costs, including whether you have enough for a deposit (generally you will need at least a 20% deposit to avoid paying lenders mortgage insurance); as well as some extra set aside to pay for any additional costs such as stamp duty, conveyancing and removalists.
  • Look at the location you want to buy in – is it more cost effective to rent or buy in your area? If it’s far cheaper to rent, renting for a while longer may give you the opportunity to save up a larger deposit which could reduce your borrowing costs in the longer term.  A rent or buy calculator could help you work out what is the best option in your ideal location.
  • Remember, interest rates can go either way and you never know for sure until it happens. Rather than basing a buying decision on low interest rates, weigh up your attitude to risk and consider how you would manage if your repayments were to increase. Choosing a fixed rate home loan may help with budgeting as you know exactly how much your repayments will be, irrespective of interest rate changes.

4. Will I cope financially if I lose my job?

Having a savings buffer to call upon in an emergency can help give you peace of mind.

  • If you already have a savings account, consider setting up a separate one where you can build your emergency fund – one that you won’t dip into in case you really need to.
  • Treat your payment into your savings fund the same way you approach paying utilities and household bills. Transfer a set amount to your savings amount every time you get paid, so you’re building up a savings buffer without even thinking about it.
  • The key to saving is consistency, so even if you’re only transferring a small amount across the fact that you’re doing so regularly is a positive habit to get into. It will all add up in the long term!

The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Home and Contents Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.

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