As the whole of Australia sat down to watch the race that stops a nation a momentous change was put into place by the RBA, the announcement that they would be raising the rate by 0.25% was the first raise since the Global financial crisis hit. This raise may seem minor but will have a lasting effect on families Australia wide. No matter if you are renting or paying a mortgage you will feel the first rise in rates. Since the global financial crisis first hit our shores people have cut their spending on credit facilities but even with the rate drops that have allowed Australia to be one of the top economies in the world at the moment, the number of Australians struggling to meet their payments have not decreased but in fact increased. An increase in the level of unemployment has resulted in families being unable to meet their payments, all of these factors have resulted in record numbers of bankruptcies over the past year and with projected figures expected to increase it all points to a solution being needed. Although unemployment levels are expected to decrease over the coming months, there remains a level of uncertainty regarding the economy for all Australians.
With Christmas on the horizon and more rate increases tipped for the coming months, even though unemployment levels are expected to decrease over the coming months, we all need to be mindful of the future. Taking this all into account steps need to be put into place that will allow all Australians to sleep well at night and release the pressure that comes with debt.
We all need to be planning for the future because no one wants to work forever. The following steps may make the future easier for all.
The following steps are taken from
The home underpins prosperity John Collett | October 7 2009 | The Sydney Morning Herald and may assist those who have a mortgage.
“Increase repayments on mortgage and also frequency. Use an offset account to save on interest.
Salary sacrifice into super. Annual limit is $25,000 (including the employer’s 9 per cent) for those under 50.
Start a transition-to-retirement pension at “preservation age”, which is 55-60 (depending on when you were born).
Draw down on the TTR pension to pay the mortgage and save on tax.
If you have surplus cash and stable employment, consider borrowing against the home to invest.”
An interest earning savings account is an easy way to build wealth. All you need to do is put together a strong budget that takes into account all expenses and allows you to put money away for the future. The following website shows the best accounts in Australia. http://www.moneymanager.com.au/
If you do need to borrow money, you must always do as much research as possible. Remember the best interest rate does not always mean the best loan for you. When looking for a personal loan you must take into account the following.
• The term of the loan.
• The interest rate that will be charged and how often the payments must be made.
• The way the rate is determined – is it variable (the lender can move the rate up and down) or fixed?
• Fees over and above the interest payments, such as monthly “service” fees.
• The actual amount, in dollar terms, that will be paid over the life of the loan. On a house, over 25 years, this will be several times the actual price.
• The type of security required – for example, a mortgage on a house may involve the lender having title over the property.
• Can you repay the loan early? Is there a penalty for early repayment?
• What happens if you experience short-term financial difficulties or are unable to repay the loan?
• Is the contract covered by the Consumer Credit Code?
These steps taken from the Sydney Morning Herald
It is always best to speak with someone who has a history with working with people in debt; this is where Debt Negotiators come in. At Debt Negotiators all of our consultants have spent the majority of their careers in finance, either in personal lending or working with debt. At Debt Negotiators we will find the solution that is right for you, whether it be a mortgage refinance, a personal loan or even a debt agreement. We will always give you the information required and for all clients a DMP (Debt Management Plan) will be completed. The DMP allows all clients to see where their money is going and give an indication of what the best options are.