Financial experts have given their advice and simple budgeting tips to help generate up to $7000 pa surplus income for investing.
With interest rates tipped to remain at historically low levels for much of 2014 Financial comparison website’s Mozo’s spokeswoman, Kirsty Lamont, has said in order to keep your finance in check one of your top priorities should be avoiding unnecessary banking fees. Lamont confirmed that, last year the average Australian household paid more than $100 in banking fees.
With falling interest rates people with online savers and term deposits should check the interest rate on their account and make sure they are getting a good deal and be sure to know what rate you are earning. Lamont warned that there were, “many savers out there who are not earning enough interest to beat inflation….check the ongoing rate and if it’s anything less than three per cent it’s not enough to get ahead of inflation after tax.”
Credit cards is also an area where Australians need to be more assertive; with latest figures showing the nation owed $48.9 billion on credit cards and about $34.1 billion was accruing interest.
Lamont conceded that interest rates on credit cards were far too high and Australians needed to look elsewhere to get a better deal. She said that with half of the cards on the market offering rates at 18 per cent “you are basically throwing money down the drain. Make a commitment to stop lining the banks’ pockets in 2014 and get rid of your debt once and for all, the best way to do that is get a zero per cent balance-transfer card with honeymoon interest rate periods.”
With interest rates on home loans at historically low levels in 2013 Mozo has reported that Australians are getting further ahead with their mortgage repayments and Phil Naylor chief executive from The Mortgage and Finance Association of Australia said that, “the way to save money on mortgages is to either pay more off each month than the bank requires you to or if your loan allows it to pay more frequently.”
It is imperative that people constantly review their mortgage, interest rates and fees to guarantee that they are still receiving a competitive rate.
With returns on nest eggs in 2013 above 15 per cent for the median growth funds, the Association of Superannuation Funds of Australia’s chief Pauline Vamos has said there was a couple of key things people should do to keep their retirement savings in good health: find out if you have any lost super (there are billions of dollars in lost and unclaimed super – use the Australian Taxation’s Office’s SuperSeeker tool to search for your lost and unclaimed super), and try and contribute more to your superannuation so you are left better off when they you retire.
Financial expert Noel Whittaker said Australians looking to boost their wealth need to think more outside the box with many Australians conceding that the choice of investment was limited to shares and property. Whittaker says, to “write down your assets with diversification being the real key. The bulk of Australians are overweight to residential real estate and underweight to shares. If you are overweight to residential real estate you should adjust the asset mix in superannuation to give a greater emphasis on share based investments.”
Whittaker also said that it was important to write down your net wealth every year, “to see how it is going when compared to your goals. If it has been a bad year you may need to increase the amount you invest in the following year to catch up.”