When wages growth slows

Late last year, the ABS released some statistics on the movement of Average Weekly Earnings. See them here

It revealed, not unsurprisingly, that average weekly earnings grew by only 1.6% for the 12 months to November 2016. This compares to 2% when the last report was released in March 2016.

It’s a sobering thought that wages growth has effectively been stifled. While those whose earnings are in the lower spectrum, living is still a bit tough. But hopefully this also means that inflation is under control and spiralling prices will not be seen again for some time. We can but hope on this front.

When looking at this from a budgeting perspective, simplistically we can approach it from two angles.

If wages are not growing for us then we can either look at increasing our household income, through seeking additional work; or by a party that is not currently working seeking some active employment. On the other hand if our income is not increasing, we then need to look at reducing or eliminating some of our costs.

A good idea is to look at all your utilities and see where cost reductions are offered either from your own supplier or a competitor, provided you change the terms of your contract. It could just mean signing up for a fixed term with one particular supplier or agreeing to pay the bill on or before the due date. Both of these can provide significant percentage reductions in your overall bill that equates to hard dollar savings over time.

The message no matter what your circumstances,  is that it is never a bad time to review your budget. A simple exercise every 6 months will tell you straight away if you’re on track or not.

If we can assist you with your budget review, or even setting up your budget (if you don’t already have one in place), please contact us.

 

 

 

©   Mike Betts – Budget Bloke

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

Are you a wedding planner or a wedding spender?

A recent study highlighted the increasing costs that some of our young people incur when they get married. It also raised the question of the huge debts that many incur – just so that they can have a piece of paper saying they are now Mr and Mrs such and such.

This leads me to the question – Do we really need to spend heaps on weddings?

There are many ways to reduce or even eliminate many of these costs.

  • Do you really have to invite all of your closest (and distant) friends plus relatives for a free meal and drinks? Why can’t your guests pay their own way instead of giving you a wedding present? Think about it – most wedding presents these days double up on stuff you already own or something that someone else has already purchased for you.

 

  • Do you really need to have the “cast of extras” there? The workmates that you hardly know; the relatives you haven’t seen for years? Will they be upset if they don’t get an invite? Will you really notice if they are not there? If they were close to you, they’ll understand the reason if you explain it to them.

 

  • Many in the ‘wedding industry’ make their money just from having the word wedding prefixing everything they do. It really shouldn’t mean that the costs are far more than for ordinary occasions, but they often are. Unfortunately the word “wedding” usually equates to the sound of cash register bells continually ringing for many people. Try not mentioning the word wedding when ordering flowers or clothes…..it’s remarkable how the prices magically become cheaper.

 

  • Be very clear in your negotiations with your photographer. Find out upfront exactly what is included in your package, how many hours they need to be there, how many assistants they really require to work. Ask a friend with a clear eye and a steady hand to take shots at the reception and send the photographer home after the ceremony and formal pics are done.

 

  • Instead of complicating your wedding budget by wanting everything and not having enough money, try it this way: decide what is most important for you to enjoy the day and then find less expensive ways to have your dream wedding. In fact, if you think outside the square a little, then you will find that there are many ways to save money.

If you must have that special wedding that you have always dreamed of, nothing can substitute for having in place a robust budget well in advance of the happy day.

Congratulations if you have already planned the budget for the event. If not, make an appointment now with us to get things planned early.

 

 

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

Buying your first home

Last year I was sent a press release from a mortgage broking company that said

“It is becomingly increasingly difficult for first home buyers to save the deposit they need in order to purchase a property worth hundreds of thousands of dollars”.

This is the sort of statement that makes me get a little hot under the collar.

The CEO of that company then went on to say – “it was time for the government to act and do something before home ownership stops being the great Australian dream and becomes the unattainable dream”.

That sentiment really makes me cranky….

Over the past 70+ years, since the end of the Second World War, home ownership has been hailed as the best way to keep Australia safe; by owning your own piece of the country.

Unfortunately in todays’ society where living for today has taken precedence; the purchase of a home has been put on the back burner for many people. But what’s wrong with planning for tomorrow and living for it?

Many times in the media we hear and read stories of people who would like to buy, but can’t afford the price.

Taking on the responsibility of home ownership is a personal decision. It has nothing to do with the government.

From all the people that I help in setting up a budget, I find that buying a property has nothing to do with ‘affording the price of a house’. The reason many people don’t buy a house is because they have different priorities and that’s where they spend their money.

For many of them, home ownership is close to the bottom of their priority list.

Of course, once the purchase of a house moves up their list, they then get serious and the first thing they do is get a budget organised.

Buying your own home has always been affordable for those who want one. Part of that process is to curb the desire to spend on other priorities, set goals accordingly and work towards the end result.

Of course, managing your money realistically has a lot to do with attaining the outcome. And being practical about where you can afford to buy your home will also make the goal easier.

I get a little surprised however, by the young folk of today that live with their parents for 25+ years. They have a good income yet pay no living costs. They also don’t have any money saved towards a deposit for a home. It makes me wonder what on earth they spend all their money on.

Sadly, for some people the only hope of owning a home will depend on an inheritance from the generosity of their parents.

I am curious to know if they’ll continue to live in the family home until that time.

Bottom line? If you really want to purchase your own home then the first thing to do when getting started is to organise a budget.

But you knew I was going to say that, didn’t you?

 

 

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

 

The truth about ‘downsizing’

Downsizing the family home is a term used by lots of people in my parents’ generation and it’s now becoming a ‘buzz word’ for the baby boomers.

So what does that mean? What exactly is downsizing?

A few years ago, whilst working in real estate, lots of older people told me that the reason they wanted to sell their house was because they “needed to downsize”.

At the time I accepted that – but I didn’t really understand it. Why on earth would you throw away 30 plus years of memories and collectables to jam yourself and your dearest possessions into a home that’s one third the size, with no room to keep all your familiar things?

It didn’t make sense to me.

But then when I worked as a mortgage broker I saw some ‘hidden reasons’ as to why people have a need to down-size.

My parents’ generation and indeed many of the baby boomers have never had the opportunity to provide adequately for their retirement. So, once they retired – all they had to live on was a government pension. As we know that’s barely enough money to provide more than a basic standard of living.

With things being a constant struggle, and the only asset they owned being the family home, it made sense to sell that home and buy something smaller. (Thus the term – downsizing)

So, in doing this, the maintenance costs on a smaller place are less and sometimes the running costs are also smaller. Regardless of where you live – your utilities will be pretty much the same cost as they are now. (unless of course you move to another country)

In the past, selling a larger house and buying a smaller unit or town-house would result in a reasonably good-sized chunk of money left over after the sale. This could then supplement the old-age pension and the quality of life for the retired was improved.

But the property market doesn’t stay static. Not only have house prices risen, so too have the prices of units. So the tired and in-need-of-maintenance homes owned by the strapped-for-cash retirees are no longer fetching as good a price as they could have.

Their owners just don’t have the funds to re-furbish and re-paint to ensure a better price. And if they do, they possibly won’t have a need to sell. Often these days, there won’t be a good-sized chunk of money left over at the end of a sale. It can seem that there is no point in ‘downsizing’.

Some people have decided to continue on the downsize plan. For them it means that they can live in a smaller and newer house that requires little in maintenance and maintenance costs for the rest of their lives.

In some cases, some of them have had to take out a mortgage to do this and therefore put their already stretched finances under even more strain.

So where is all this leading? Well, I guess it all comes back to planning; planning now for your retirement and for the major financial decisions for the future.

If you’re still working and feel that you’ll have a need to ‘downsize’ your home (for whatever reason) then perhaps it makes sense to do so before you retire from the workforce. That way at least you’ll still have a renewable income to ease the costs of selling and moving house and perhaps a small mortgage.

Or maybe it would just make sense to start working on a household budget – to ensure that you can live on your retirement money without the need to sell your most loved asset, your home.

 

(c) Carmel McCartin – Budget Bitch

The words expressed in this post are, as always, my personal opinion. If you want to argue  – send me an email.

Back to school

 

 

At the end of this month a new school year will start. It can be a hefty financial time for many parents, not only do they have school books and uniforms to pay for, but for some there is also the cost of school fees.

Perhaps the greatest tip for minimizing these costs is to be sensible about purchasing only what your child needs as opposed to what they want or what the back to school catalogues tell you to buy.

If you are new to all this and have a child starting school for the first time, perhaps you could ask other parents with school age youngsters for some help with discerning what the essential items might be. There’s not much sense in sending a first timer off to school with a bag full of items that won’t be used until secondary school.

Of course, there are many other helpful hints but here are my top five.

 

 

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

Happy New Year

It’s the start of a new year – 2017.

Now that we’ve got the past year and all its trials and tribulations behind us, we can start afresh and begin this year with a clean slate. Wouldn’t it be great if we had a crystal ball and could see what this year holds for us all!

Of course, at this time of year, we hear much about ‘New Years Resolutions’ – “have you made any?”, “did you keep the ones you made last time?”, “do you make different ones every year or do you trot out the tired old ones that don’t seem to make it past the first few weeks?”.

When the topic was raised at a family BBQ, it was interesting to hear the different explanations about the practice to the younger generation. It was summed up beautifully by one young nephew – it’s really planning your goals for the next year”. 

According to some newspaper polls more than 33% of the population resolves to pay off their credit cards each year, but statistics also show that 60% of New Year Resolutions are long forgotten by June.

It’s a great idea to plan some goals for the coming year but if your list is very long you may find that you struggle to achieve too many of them. Sometimes it’s easier to just have three or four resolutions, make a plan that works towards the end result, and then you will find that you can conquer them all. There will be slip-ups along the way but if you stick to the plan you’ll soon get the result that you want.

Don’t forget to make a ‘family’ resolution this year, after-all they’re the important people that make our lives worthwhile. A ‘financial’ goal is also a great way to start the New Year.

If you’ve got your budget under control – keep up the good work! If you’d like a health check for the state of your finances – please don’t hesitate to give us a call.

 

(c)  Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions, you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

I wish you a trim & taut body for 2017

So here it is – New Year’s Eve. And by this time tomorrow we’ll be sitting back contemplating the first few hours of 2017.  (Of course, there are some of us who will be nursing a more fragile state of mind)

Most people that I’ve spoken to recently tell me that they hope to pay off their credit cards at some point in time during the coming year.

But did you know that Australian households overtook the Swiss as the world’s most indebted this year?  Our outstanding debt is equivalent to 125 per cent of GDP and there seems to be no change in sight. As one of the highest ratios in the developed world – that’s a lot of debt!

During 2016, the Deutsche Bank  calculated that the ratio of average Australian weekly mortgage interest payments to weekly income had increased from 53 per cent in September 2013 to 66 per cent in December last year. That’s higher than the 57 per cent average and comes despite exceptionally low interest rates.

A financial goal is also a great way to start the New Year. If you’ve got your budget under control – keep up the good work! Perhaps it’s time to reassess where it’s heading.

If you don’t have a working budget in place, then maybe it’s time to take some responsibility for your finances and get them into better shape.

I find it amusing how many people spend so much money on gym memberships to get their body trim and taut, but never give a thought to spending anything on getting their finances into better condition.

Making your body look and feel better is a work in progress and sometimes, to get the results that you want, if you’re not careful you could end up spending money on that pursuit for the rest of your life.

Getting your finances to look and feel better is also a work in progress. But, unlike the gym, it only takes one appointment with Budget Bitch to learn how to get the results you want for the rest of your life.

It’s not expensive – call me!

 

(c) Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions, you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

It’s never too late

This morning I sat down to write something about budgeting for the blog and then realised that the end of 2016 is really not that far away.

Once again, the year seems to have slipped away so fast and it made me think about all the things I said I’d do this year. I’m not talking about New Year Resolutions because let’s face it – who keeps those anyway?

So let’s see if some of the things I promised myself I’d try to improve have been done …

  • Go to the gym on a regular basis – check
  • Put a regular amount into my holiday account – check
  • Write another book – Have got it started, but it’s going slowly
  • Go to bed earlier every night – well … I’m working on it, ok?
  • Lose 7 kilos – errrrrrr…. Next…..

So now that it’s November, I realise that I still have time to put some steps in place so as to improve the areas where I have been a little slack.  I know I won’t get everything finished before the end of the year; but at least I won’t be putting off making a start.

And I can still hear my mother saying – “Never put off till tomorrow what you can do today” *sigh*

Nonetheless, I’m not going to be too hard on myself for being a little slow off the mark in getting these projects started. It’s human nature to procrastinate when it comes to ‘difficult’ tasks. Sometimes it’s the very thought of doing something that makes us want to procrastinate.

What have you put off starting this year?

Could you get cracking today to finish the year on a high note? It’s surely got to be better than just sliding to the end on empty promises that you made to yourself.

 

 

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

 

Renovating can help your budget

Whilst we continually hear that the property market is big business across Australia, would it surprise you to know how many people are getting stuck into renovating?

One in four Aussies are planning to renovate their home in the next year according to a new survey by ServiceSeeking.com.au. That’s a lot of plumbers, painters and carpenters needed across Australia so it’s a great sign for the buoyant renovation trade sector.

And more than half of all homeowners (54 per cent) have renovated in the past.  So are we really are a nation in love with the idea of renovating, or are we taking a more cost effective approach to improving the space in which we live?

With a plethora of renovation television programs such as House Rules, The Block and Selling Houses Australia, more homeowners are inspired to take the plunge in redesigning and improving their own homes. And let’s face it – that has to be more affordable than buying bigger and better than what you already have.

“Renovating is big business at the moment. Homeowners love to update, experiment and change their surroundings so there is always plenty of work around for tradies,” says ServiceSeeking.com.au CEO Jeremy Levitt.

He also said, “…the rewards will be in not only the satisfaction a newly renovated space brings, but in the (possible) monetary rewards should they be renovating to sell.”

Whether it’s one room or a whole house renovation, there are many considerations to make before donning the tool belt or placing a job listing for a carpenter. For help with where to start, see: www.serviceseeking.com.au/blog/

Statistics are from a recent survey of nearly 800 ServiceSeeking.com.au customers. (September 2016)

Whether you decide to do it yourself or get some professional help, don’t forget to budget for your renovation before you start. Always make sure that you have allowed a little extra for hiccups along the way.

 

 

 

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

 

The value of getting help

Scott and Annalise are just like most people they know – married, in their mid-30s’, with a young family who are all at primary school. They both have great jobs and enjoy a full and active social life as well as holiday weekends every month. A holiday weekend consists of a short stay on the coast or in the mountains.

Their combined income is $150,000 and the only debt that they consider to be large is their mortgage. They also have a car loan which they say is “nothing to worry about”. With no savings in the bank, they haven’t even started to consider putting some money away for the future yet.

Like many people – every week, the first thing they do with their income is to pay the mortgage and make a car loan payment.  After that; whatever bills that are hanging on the fridge are paid and then they spend the rest. ‘The rest’ is food, fuel, entertainment and whatever else they want.

If you asked them, Scott and Annalise would say they are living the dream. They have everything they want and can afford to participate in what they know others would see as an enviable lifestyle.

Within a year or two, their children will be ready for high school. Scott and Annalise would like them to attend a private school that is not too far away from their home. They think the school fees are manageable, but they’re not sure what impact it will make on their lifestyle.

They decided to book an appointment with a Budget Bitch consultant to ensure they could afford their education choice without too many sacrifices. They also wanted to set up a plan to put some money aside as savings. They had no idea how to do this, and could see the value of getting help from somebody who was impartial about the way they spent their money.

If you are in a similar position and would like to improve your financial future, please give me a call.

 

 

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

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