Maintain your repayment

If interest rates fall, maintain your repayments at the same level.  You are already used to not having the extra dollars so stick to the same repayment amount.

For example:

• $300,000 loan at 7.50% (principal and interest) over 30 yearsMonthly repayment - $2,098
• $300,000 loan at 7.25% (principal and interest) over 30 yearsMonthly repayment - $2,047

By continuing to pay $2,098 per month you would be overpaying by $51 per which could save you $40,000 in interest over the term of the loan and reduce your term by over 2 years!

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Round down your balance

At the start of each month, round your account balance down.

Once the interest charges have been added, make an additional payment to round down your balance to the nearest $10 or if you are feeling a bit flush to the nearest $50. It won’t save you a lot – probably less then $0.10 per month, but it all adds up over the term of the loan. Either way you save and it costs you next to nothing!

It's the first day of December - so what better day to start - do it now!  No, really, I mean it.  Go on, open up another browser and go to your on-line banking page and make the payment.  No, now - what are you waiting for?
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Set up a recurring payment.

Most home loans allow you to make additional payment. Set up a recurring payment that you will never miss. Don’t aim too high. Make sure it is an amount that you will never miss. If you are likely to miss it – you are likely to stop the repayment in the future. Start low and if you can increase the amount over time all the better, but even $10 per week will make a huge difference over time! So how much could an extra $10 per week save you??

Well, you may be surprised to hear that an additional $10 per week could save you around $35,000 in interest over the term of the loan and reduce your term by nearly 2 years. Would you have thought that $10 per week could make such an impact?

If there are 2 of you and you both put in an extra $10 per week your savings could double!!

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Tip 1 - Move to fortnightly repayments

Rather than 12 monthly payments you will actually make 26 fortnightly payments in a year.  You will save on interest and you will end up paying off more capital in any given year.

For a $300,000 loan over 30 years this could save you almost $120,000 in interest payments over the term of the loan and you could reduce the term of your loan by around 7 years!

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Home loans – back to basics

With all the talk of Interest Rates changes I though it might be worth looking at home loans and how to get rid of your home loan ASAP.

Firstly, unless you are very strict with your money and have a good handle on exactly what you are spending try to avoid an ‘All in one’ portfolio type loan which work like a normal bank account in permanent overdraft.

These loans are extremely flexible, but the lenders are banking on you getting lost with your budget and essentially treating it as an interest only arrangement – always reverting back to your max overdraft limit.

As with anything you can use the flexibility to your advantage, but be very careful. If you are not great at budgeting do not use the loan account as your everyday bank account – maintain a separate every day transaction account.

The thing to realize is that despite what they say the banks actually want you to be in debt for as long as possible – that is how they make their money so when you are offered fancy new home loan product, make sure you know exactly what you are signing up to.

The biggest mistake is using home loans to free up cash. Using home loans as a cash flow tool is extremely risky and your only aim with your home loan should be to pay it off ASAP. Reduce the term as much as you can and overpay as much as you can afford as often as you can afford.

There are people out there who still promote interest only loans – but my view – steer well clear of them unless it’s for an investment property and you know exactly what you are doing.

Over the coming days I will give you some easy and practical ideas on how to pay your home loan off quicker...................


All the examples are based an initial loan of $300,000 over 30 years at a rate of 7.5%. The savings are not exact and are designed to be nothing more than thought provoking. The scenarios are generic and do not take individual circumstances into account. You should seek independent financial advice before making any significant changes to your financial products.

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Spend or Save?

Financial recovery package or just a band-aid? You decide!

Over the last few weeks there have been a lot of people on TV, radio and on Blogs telling us that the AFC (Australian Financial Crisis) is as good as over.

• Real Estate ‘experts’ are telling us that house prices have started to stabilise and in most cases increase.
• Retailers are telling us how consumer confidence is improving
• The ASX is on the up
• There is talk of imminent interest rate rises

Wow – things must be good. Surely we’re in the clear!?

Hmmm….. take a step back a moment. Have a think – are things really on the up.

Sure consumer confidence is on the up, but what about commercial and business confidence – which is really what matters?

How many empty shops are there in your local High Street? Have you notice how much commercial property is sit empty with For Lease signs outside. Take a look on your way home tonight. You know the one I mean – that brand new building on the corner that has been empty for over 6 months.

The cold facts are that commercial confidence is far from where it needs to be for us to say that we are in any kind or recovery.

Here’s a rather negative but realistic view on where we are at right now.

Things started going wrong last year, so K Rudd threw some cash at the problem. Things didn’t get any better so this year he threw some more money at it and it seemed to wok.

Yes it worked on the surface and helped consumer confidence, but did it actually do anything for a GNP? NO!

So what did the K Rudd financial stimulus really do? The simple answer is that it artificially inflated consumer confidence.

A lot of people ended up with a bit of extra cash which they were encouraged to spend. Retailers were happy, consumers seemed happy all good….. you’d think so, but what happens when the money runs out?

The cash stimulus was a knee-jerk reaction and it was a just a cosmetic fix. The cracks are still there under all the make-up and the political spin!

Then we have the new home owners grants and extra incentives – excellent idea – NOT! Think about it. K Rudd is encouraging people who cannot really afford it to buy homes. Offering inflated incentives and bonuses means that people who could not afford a house 12 months ago, can afford one now. Again on the face of it this seems like a great idea, but what happens when the RBA increases interest rates based on artificially orchestrated consumer confidence? We are being lined up for the biggest fall of all. Has everyone forgotten how all of this started? Over borrowing, over gearing… need I say more?

Over the last 12 months K Rudd and the G20 have been blowing smoke up each others arses telling each other how great they are and how well they are managing the GFC. It’s time to wake up ladies and gents!

What has been accomplished by K Rudd and Co over the last 12 months is pretty poor when you actually look below the surface. Essentially, he pushed Australia into deficit by spending $40+ billion on a band-aid solution which long-term will actually make the problem even worse.

1. Interest rates go down
2. Government stimulus package
   a. Cash payments
   b. Insulation grant
   c. Home buyers grant
3. People think they have more money and spend up
4. Consumer confidence increases
5. New home buyers – buy homes
6. Low interest rates, cash incentives, people encouraged to spend spare cash to ‘support the economy’
7. House prices on the way up
8. Everyone is happy?
   

   ---

9. Interest rates go up thanks to artificial consumer confidence
10. Cracks start to appear
11. New home owners cannot afford repayments as rates increase
12. Tax rises to pay off deficit
13. Welcome the real recession!

Hold on tight – things could still get a lot worse!

My advice – pay off as much of your home loan now when the interest rates are low – over pay as much as you can to reduce the capital. When rates rise as a result of artificial stimulus you'll be glad you did!

Consolidate your Super

Many of us have changed jobs in the last 5 years. Some more than others. The question is do you know where all your Super is?

When you move jobs the temptation is to just sign the form and go with the default Super fund provided by the employer. Anything else is often seen as ‘too hard’.

For this reason many Australians have numerous Super funds sitting around the place with different providers.

Well – time to consolidate!

Why consolidate – simple! If you have your super sitting in 4 different funds with different providers you will be paying 4 lots of charges. As there are no additional contributions going into 3 out of 4 of the funds, it is likely that they are being eaten up by management fees and charges.

There are services available to find all your Super contribution and Switching has been made very easy. It just takes a few forms and the receiving Super Fund will generally help you as much as they can.

Move all the money into 1 place and you only pay 1 set of fees and charges instead of 4 – instant saving of 75%!

Now – talk to your Financial Advisor and you may be able to save or make even more money by choosing the right Super Fund and the right investment strategy.

Take charge of your Super. It’s your money!

Budget on your iPhone

Budget on your iPhone - track where your money is going and how you can save.

Ever wondered how much money you spend on coffee in a day? A week? A year?

How about seeing how much money you could really save by taking a packed lunch to work?

Or seeing where your monthly paycheck went even though it’s two weeks until payday?

Big Spender is an easy to use application designed to help you track your personal spending. Simply make an entry each time you spend some money. Over time, you will be able to see where you're spending the most, and identify areas where savings can be made.

Big Spender application available here.

Big Spender - iPhone Budget App

A new iPhone Application has just been released that may help track spending and see where you can make savings - Big Spender.

If you have an iPhone go and do whatever it is you do on iTunes to find - Big Spender iPhone Application!

http://www.swiftcurrentventures.com.au/mobility/

Recycle

I don't mean re-use old stuff to save buying new stuff - although that works as well.

I mean recycle paper, packaging, boxes, plastics etc rather than throwing it in the trash.

I'm sure that there are heaps of calculating models that will give you theoretical savings based on reducing your carbon footprint and being an environmentally friendly person….. but if nothing else you will save money on garbage bags!

Think about an average day:

• Newspaper
• Cereal box
• Junk mail
• Used envelopes
• Magazines
• Pizza box
• Wrapping paper from your Fish ‘n’ Chips
• Shampoo or shower gel bottle
• Milk carton or bottle
• Soft drink can
• Beer bottle
• Plastic take-away container

How many of these have you thrown in the trash over the last week? Enough to fill an entire garbage bag? Maybe.....

So the challenge is – Before you throw anything in the trash stop for a few seconds and take another look - can it be recycled?

If you recycle everything you can you should find that your recycle bin fills up quicker than your trash bin – hence the need for less garbage bags.

Beware of scams - no such thing as easy money!

There is no such thing as
get rick quick schemes
secret to become a billionaire
jobs that pay $5,000 per week for doing nothing

If you want to make money you have to work for it in some way.

Unfortunately there are a lot of ‘people’ out there who take advantage of the fact that a lot of us will be tempted to take a shortcut at some point in our lives.

Scams are everywhere. Posted on lamp posts and traffic lights, in the local paper and all over the internet.

Golden rule – ask yourself:
Why are these people paying for Google, Facebook and other forms of advertising?
If they have found a way to make $1m per year doing nothing – why are they telling me about? Why not keep it to themselves and make $2m?

The answers are simple. It’s a scam.

Think about it – why would someone pay for advertising something that does not make them money? They wouldn’t!

Be skeptical of everyone and you will not get caught out. Always think ‘No’.

It's your $900 stimulus payment!

What will you do with your $900 stimulus payment?

Those of you who will be receiving K Rudd’s stimulus payments may be thinking – “what should I do with it?”

Well, the consensus is – spend it. That’s what it is intended for. It’s not a bailout for the poor or a battler’s bonus. It’s supposed to be an economical stimulus payment designed to inject money into the economy.

So what should you spend it on?

Well, just because you are being told to spend it does not mean that you should blow it on rubbish that you do not need.

I suggest that you make a budget for your payment – where it is $600, $900 or even more. If you do not plan what you will spend it on it will just get absorbed into your normal spend and neither you nor the economy will benefit.

Make a list of things that you have wanted to buy during the last 6 months, but you stopped yourself as you could not quite afford it or justify it. Use the stimulus payment for that!

What about your car or your house?

• A lot of people have put car servicing off due to financial pressures.
• Maybe there is something round the house that needs fixing, but you have not had the spare cash to get a tradesman in.

Now is your chance! The spend does not have to a retail purchase. Spending it on trades, mechanics etc is still stimulating the economy.

Sure you could just go and blow the whole lot on a few nights out or pay some bills, but why?

Bills will always be there and will always mount up, but how often do you get $900 to spend on whatever you like?

At the end of the day this is money which you did not have in the first place – why not treat yourself to something useful and tangible.

Here are a few specific ideas:

• Blow the lot on The Kevin37 LCD TV from Kogan - $900
• Keep water and money with a Whirlpool 7.5kg Front Load Washing machine - $700
• Fun for the whole family with Nintendo Wii Console - $400
• Upgrade your digital camera - $300
• David Jones Gift Vouchers – Buy $200 and get $220

Share your ideas - what will you be spending your payment on?

On-line shopping rewards - Rewards Central

If you shop on-line you should think about joining Rewards Central.

Basic membership is free and you can earn cash or voucher rewards for shopping on-line using Rewards Central.

The program works on an affiliates basis. Rewards Central have corporate affiliations with on-line retailers which means that they get rewarded for referring you to the retailers to do your on-line shopping. Depending on the extent of the referral fees that Rewards Central earn will depend on how any points you ear.

The key with this rewards program - like with any other is not to change your purchasing behaviour too much in order to earn rewards.

Generally the retailer offers published on Rewards Central include discounts which mean that it is actually cheaper to purchase through Rewards Central.

There are other components to Rewards Central, including a survey option, where you earn points for completing surveys on-line, but these are generally extremely time consuming.

The best way to use Rewards Central is to find what you want to buy on-line, and find the best price. Then log on to Rewards Central and see if the the retailer you identified is a member of the program or if there is another retailer listed on Rewards Central that has the same product for the same price.

Rewards Central works if you make it work for you. If you need to buy - try to buy through Rewards Central, but do not buy what you do not need just to get point - that defeats the object!

Over the last 3 years I have not changed my on-line purchasing behaviour and I have pulled $250 in rewards from the program.

Cancel your old credit cards

Shopping around and switching credit cards to get lower interest rates, rewards, or longer interest free periods is a great idea.

BUT - when you switch make sure you cancel your old card and cut it up as soon as your new card come through.

There are 2 reasons for this.

• Firstly - if you keep the old credit card you may be tempted to keep using it and rack up 2 credit card bills and increase your credit card debt.
  
• Secondly - most credit cards has an annual fee. If you just forget about your old credit card and you do not cancel it, you will continue to get $0.00 statements for a while, then you will be hit with a $50.00 or $100.00 annual fee which you will have to pay.

Cancelling your old credit card immediately will mean no more annual fee for a card that you do not use.

Another $100 saved!

30 Easy ways to save money

External article - 30 Easy ways to save money.

Ten quick wins

Here are 10 quick ways to save a few dollars:

1. Turn off everything. Don't leave an appliances on Standby. Turn off the following things at the wall when not in use:
   - Microwave
   - TV, Video, Amp, DVD
   - Digital radio clock in the spare room
   - The bar fridge
   Also turn off lights, ceiling fans, air con units etc when you're not in the room. Do all that and you will see a difference in your electricity bill!
2. Re-use plastic shopping bags to line bins rather than spending money on bin liners.
3. Don't buy bottled water. Use tap water - it's perfectly safe, but if you're still not sure invest in a Brita waters filter bottle.
4. Only use you credit card to buy things you can actually afford. Don't use your credit card like a 'never, never' loan.
5. Always pay your credit card off in full. This goes back to point 4.
6. Get Flybuys. Use it whenever asked. It's free and you will earn rewards over time.
7. Don't go food shopping when you are hungry - you'll end up buying more than you need.
8. Go food shopping when you don't have much time. That way you will not be tempted to browse too much and buy things you don't need.
9. Shop around and use the web - if you are buying any consumer good or services shop around and make sure you have a look on the Web as well. Don't be afraid to play retailers off against each other. Tell them about the best price you've seen down the road and chances are that they will beat it.
10. Be prepared to haggle in shops. If you are buying anything in a shop that is advertising any interest free deals or pay nothing for 2 years etc, you can generally negotiate up to 20% off the marked price if you're paying cash. This is because all the offers are factored into the ticket prices. Retailers are not stupid, they mark up items enough to still give themselves a margin when offering interest free deals. If you don't need the deal - make sure you get your 15% - 20% off the ticket price!

Save money at the movies!

Greater Union Birch Carroll & Coyle run Cinebuzz - a rewards program that could save you heaps on movies.

All you need to do is join (for free) and you start saving straight away.

Every time you use your card to buy a movie ticket you earn point. For every 10 movie tickets you buy you get 1 free - not a bad return, but it gets better.

If you buy on line as a CineBuzz member you can save up to $7.50 per ticket - that's a 48% saving of a full price ticket.

This is how much you could save if you go to the movies just once per month:

• If you go to the movies once per month and buy a full price ticket it will cost you $186 over the year
• As a CineBuzz member it will cost you just $99

That's a saving of $87 per year - that's almost half price!

http://www.greaterunion.com.au/cinebuzz

Latest e-mail scam

http://news.ninemsn.com.au/national/754660/crooks-set-sights-on-rudds-bonus-payment

Internet crooks are using hoax emails to swindle people out of their slice of Kevin Rudd's $42 billion economic rescue package.

Federal Police are investigating emails purporting to be from Centrelink and the Tax Office which tell people they need to provide their bank account details to receive the government's one-off $900 bonus payment, the Sydney Morning Herald reports.

The scammers tell recipients they need to fill out an attached form to receive the payments, Federal Human Services Minister Joe Ludwig said.

As well as bank accounts details, people are asked to give their name, address and date of birth.
"Anything that suggests you need to submit an application form to get the household stimulus package one-off bonus payments should set off alarm bells," Senator Ludwig was quoted as saying.

"Centrelink already has the information it needs to process these payments."
The payments will automatically be paid into accounts from March 11.

Anyone who has received the email should delete it and contact Centrelink on 1800 050 004.

http://news.ninemsn.com.au/national/754660/crooks-set-sights-on-rudds-bonus-payment

Shop around for Credit Cards

Over time we all get comfortable with our credit cards thinking that it’s not worth changing providers – well it is.

By shopping around you can pick up some great deals from Credit Card providers desperate for your business.

Incentives include:

• Low introductory interest rates
• Low interest for balance transfers
• Interest free days
• No annual fee for the first year
• No annual fees ever
• Rewards – Points, Cash Back etc.

The first 3 are great for normal credit card users who have a balance left over at the end of each month and who do not pay off their card in full.

No annual fees – benefits everyone.

Now, if you are credit card savvy and pay the entire balance off at the end of each month, firstly – well done! Secondly, consider rewards programs as a way to make something more out of your credit card.

Let’s look at some of the rewards on offer:

• Frequent Flyer points
• Velocity Rewards points
• Fly Buys points
• On-going fuel discount vouchers
• Cash back

There are also other ‘ad hoc’ and ‘one off’ rewards like:

• Entertainment rewards - tickets to a show or the cinema
• Food and beverage rewards - restaurant voucher
• Merchandise - a free stereo or camera

Ultimately it’s the on-going longer term rewards that you really want as over time these will give you the best return.

Make sure you get the card that suits your rewards program and your sending habits. For example if you are already a Frequent Flyer member consider boosting your FF points.

If you always shop at Coles, think about the Cole Source card, which give you Fly Buys and monthly fuel discounts.

If you are a regular Virgin Blue flyer – think about a Credit Card linked to the Velocity program.

BUT….watch out for annual fees and weigh up the overall cost -v- reward.

Shop around and do your homework and you could be richly rewarded.

Check your statements

Again it sounds obvious, but how many of us now have on-line banking and don’t really check bank or credit statements in detail?

There are 2 good reasons for checking your statements – firstly to make sure that there are no mistakes or rogue transactions…..but the second one is where you could really save the money.

With technology the way it is now it is rare for rogue transactions or mistakes to occur -sure they still happen, but it’s not very common.

What is becoming more common and the second reason for checking statements is old Direct Debits and Subscriptions that have not been cancelled.

Check your statement now for:

• Gym membership that you no longer use
• Old magazine subscriptions
• Software license subscriptions
• Monthly charity donations that you forgot about

The list goes on. Fact is, a lot of us will overlook these things as we are used to seeing them on our statements and we do not question it. Check your statement now and make sure you stop and cancel an direct debits that should not be there.