The ideal conditions of a super fund should be something that is well-performing, reasonably priced and offers flexibility, variety and good service. Discovering a fund that offers all these is quite tricky, so, getting the assistance of a fund manager may be a good idea.

There are several types of super funds in Australia but two of the more popular ones are retail super funds and industry super funds. Most of Australia’s super funds belong to either one. Banks and insurance companies usually own and operate retail super funds whilst industry super funds are similar to cooperative where the employer and employee group creates super funds to provide super fund arrangements for a group of workers in a certain industry or state.

Although retail super funds offer a wider range of investments, its overall costs for managing such funds are also higher and it is mostly offered through financial adviser networks. On the other hand, most industry funds offer basic products and are generally low in cost. It is also offered publicly which allows anyone to easily become a member. Another advantage of industry funds is that it is not for profit which means any earnings it gets are put back in the fund for its members’ benefit.

In comparing super funds, make sure to review the fund’s Product Disclosure Statement (PDS) before deeming one to be less costly than the other. A PDS should have a breakdown of all the fund’s fees and charges. For instance, are there entry or exit fees, or charges for getting the services of their adviser? It is also important to know if there are any charges if you switch investment options. This is particularly important to avoid getting stuck to a super that is not working for you.

Choose a super fund with suitable selection of options. Remember that even though retail funds offer over a hundred investment options, sometimes fewer choices are better. The half dozen or so options of the basic industry fund are less complicated and may as well be easier to manage. Also, review the fund’s other services and advantages such as pension products, investment insurance and free financial planning services. Assess a fund’s long term performance since this will give you a clear picture of your investment portfolio in the long run.

After careful consideration between retail funds and industry funds and you feel uncomfortable with both, you can review what self-managed super funds (SMSF) has to offer. As the name implies, this type of fund lets you manage your own investment portfolio. An accountant or a financial adviser can be hired to assist you in certain aspects of managing your SMSF but the fundamental responsibility of managing it still depends on you. Take note that the cost of maintaining a SMSF can be higher than industry and retail funds and in order to make it profitable, a considerable balance is needed – at least $250,000. That is quite a hefty sum but if you have the money and can spend time managing your investments then this type of super might work for you. Nevertheless, with all these options laid out, you can already assess which type of fund will suit you best.

The fact is the earlier a savings plan is started; the less one needs to contribute into a savings plan.  A longer time frame for investment also allows Parents to take on more risk and optimise returns.  This is because fees at most private schools rise each year between 5.5 percent and 7.5 percent, a steep climb compared to inflation which rises about 3 percent a year.

As with all financial plans, parents should have a clear savings target when planning for private education.  Since education investment is a long term plan, external factors should be considered when planning for it says Colin Lewis, the technical services manager at ipac Securities.

“Even if parents start saving when the child is born – with the aim of sending the child to a private secondary school with annual fees of $25,000 a year – parents would need to save about $940 a month for the 18 years from the birth of the child until the child finishes high school,” he says.

“That is $940 in today’s dollars and the monthly contribution would have to be increased by the expected inflation rate of 3 percent each year. That assumes an investment return of 7 percent a year after fees and assumes that school fees will continue to increase at a rate of 6 percent a year. To fund six years of secondary school at $10,000 a year, the monthly contributions would fall to $376.”

Lewis’ calculation also assumes that a tax rate of 30 percent is paid on the investments, a good assumption because it’s likely not far from the top marginal tax rate of most parents.

Lewis suggests families should put 50 percent of the education investment in growth assets such as shares and listed property, with the rest in income-paying assets such as fixed interest and cash.

With growth assets parents should take steps to guard against timing risks by locking in gains and moving some of the money into a lower-risk portfolio.  Also, parents should have another source of capital, such as an emergency bank account, because if the market falls, it is preferable not to withdraw money from a growth-oriented portfolio as the losses will be realised.

Insurance bonds or investment bonds are good tool for education investment.  These are investments for which a tax rate of 30 percent is paid on the earnings.  Optimize the investment by holding onto the bond for at least 10 years. When the capital is drawn, only then will the tax return be entered.  There are, however, restrictions on how much can be invested in the bond each year.

Investors can choose from a range of underlying investment options which spread the money between the various asset classes to cater for the risk appetite of investors.  Insurance bonds are offered by life insurers and friendly societies and are very attractive to grandparents who want to help save for their grandchildren’s education, because bonds do not form part of the estate.

Education savings products offered by banks are also readily available for parents looking for safety in their portfolio.

The oldest provider, the not-for-profit Australian Scholarships Group, uses investment bonds.  Its basic Education Fund helps meet the costs of education in government schools and post-secondary education and training. Its Supplementary Education Program helps meet private primary, secondary and tertiary costs. Its Future Education Program can be started before the child is born, and if the child does not go on to post-secondary study, the parents forgo the earnings on their capital.

The Commonwealth Bank’s Education Savings Plan has four investment options ranging from conservative to aggressive portfolios, which are available through its financial planners, and can be started when the child is any age.

Consider mortgage redraw, it might be the best option.  As long as parents are disciplined, the best return for parents is to save through the mortgage, according to Wayne Leggett of Paramount Wealth Management.

The strategy is to make extra repayments on the mortgage and then to redraw the money to pay the fees. Since most people are on variable mortgage interest rates of 7 percent a year, the money put into the mortgage is earning an effective tax-free return of 7 percent.

Consider that a savings plan or investment would have to earn close to 10 percent to make the same after-tax return as a mortgage.  An investor would have to take on more risk with the capital to earn 10 percent a year.

“The mortgage strategy is a perfectly sound strategy and has a lot of advantages,” says John Hewison of Hewison Private Wealth.

The money earmarked for education could then be put into a mortgage offset account, an account that is linked to the mortgage. The money in the offset account reduces the mortgage balance on which the interest is calculated. The money accumulated in the offset account could be withdrawn later to pay school fees.

Matt Walsh of Lifeplan Funds Management says a stand-alone investment for education is more likely to survive for its intended purpose, because there are potential pitfalls with the mortgage strategy, because when parents upgrade their homes, they tend to use all their available cash. Walsh also points to the risk of divorce and division of the financial assets.

When saving for a child’s private education, the bottom line is that parents should know how much they are targeting, have a clear plan and stick to it.

There are basic techniques Aussies can use in their effort to balance their budget, avoid unaffordable borrowing and secure a decent standard of living.

First of all, avoid unnecessary loans. Banks and other lending institutions recently introduced new loan procedures to limit the number of non-serviced loans; however, many households are heavily indebted due to unreasonably applying for credits they cannot afford.

Analyse your income and expenses carefully before applying for a new loan, as well as thoroughly assess all credit services in the market to select a product that features lowest interest rate and other applicable fees.

Experts agree that excessive borrowing is among the biggest reasons that affect negatively modern household budgets. You should never apply for a loan before securing sufficient personal income to cover loan payments for the entire duration of the credit.

This is the first step to avoid entering spiralling financial troubles that can ruin your household budget but also force you into personal bankruptcy.

Second, rethink your family’s entertainment expenses.  Every household has the ability to cut spending on entertainment, holiday trips and outside dining, which can add further funds to any family’s coffers.

By reducing non-essential expenses that include money spent on entertainment, vacations, outside dining as well as various services, households have a chance to see their savings grow.

Families these days pay for plenty of unnecessary services included in their mobile phone or satellite TV subscription plans that can be easily cancelled, resulting in savings worth thousands of dollars annually.

Third, check if your essential expenses can be reduced. Another method to develop a well-balanced household budget is to trim essential expenses.  Although essentials like food, rent, mortgage, utilities, and insurance may look fixed at first glance, these can be reduced by using some basic saving techniques.

For instance, food expenses can be lowered by taking advantage of discount coupons and other discounts offered by almost all retailers. The rent can be re-negotiated to get better terms. In times of high unemployment and financial insecurity, property owners are more willing to accept lower rent payments rather than lose out on a lease.  Mortgages can be restructured too because banks and lenders don’t make cash from idle foreclosed properties.

Fourth, manage your credit card wisely.  Credit cards are very convenient when purchasing goods and services; however, they can also trap you into spiralling indebtedness.  Manage credit card debt by applying a more cautious approach to shopping through credit cards. Set a budget with credit card purchase within a range you can easily pay off when the bill arrives.

Consolidating your credit cards under a single credit card account that bears lowest interest rate and other service fees will further save on credit card expenses. Credit consolidation is relatively easy now that Some credit card issuers offer to transfer your account to a more affordable credit card company for no or small fee, just don’t rack up additional credit card debt when paying off existing debts.

Lastly, plan and budget your finances wisely. Every household should practice financial planning and financial discipline if they wish to enjoy a balanced household budget.

Careful planning of all your income and expenses is the foundation on which to build your strategy on how to increase your savings, through reducing household expenses and increasing overall income. Subsequently, your newly developed balanced household budget will allow you to work out new strategies to increase your savings.

All efforts to develop a well-balanced budget would prove to be non-productive without tight financial discipline.

If an individual is barely making it financially but still saves up on a regular basis, Term Deposits can be a good way to keep that entire savings safe. However, it can get really tricky. Term Deposits can go both ways, it can either help one save better or go through a rough time when in need. Term Deposits offer a much stricter way of controlling one’s finances. In this sense, no matter what the account holder is going through financially, the account cannot be accessed for a certain duration.

The down side to that, of course, is when an urgent matter arises and it is immediately needed, the account holder will have to go through the painstaking process of accessing it. The worst case scenario is that all cash can still be retrieved but not without a price – a cancellation fee. On the other hand, if a consumer is financially well off and just wants to set aside some riches, then investing in term deposits no longer needs to be analyzed. With its higher interest rate, term deposit is certainly advantageous compared to a regular savings account.

Term Deposits have a distinct purpose when it comes to finances and there are a certain set of scenarios when a consumer must consider it. One such scenario is when a consumer gets a lump sum amount of money, whether it is because of a tax return, a bonus, or an inheritance. Everybody knows the feeling is like winning the lottery and for most people, the initial instinct is to spend it all.

Stop and think.

If there are no debts to be settled, the cash windfall can be kept in a Term Deposit. If it is not urgently needed and one can get by without the lump sum, then lock it all away for a longer time frame. This should give the individual enough time to think and decide what to do with it later on. They can add more to the deposit as time elapses.

For the financially-savvy, Term Deposits with the big banks are most likely under the protection of the Australian Government. Even better, a higher interest rate is given for accounts with longer terms or if the period is extended. The bottom line is, being able to sleep like a baby knowing full well their money is safe in the bank and earning at the highest rate possible. Call it Term Deposit but in the end it is still saving.

The perks of having a bit of money tucked away and secured can be very motivating. Not to mention, there is an invigorating feeling of knowing that one’s finances are under control.

Online Savings Accounts (OSA) is one product. Online banking can help save money by not needing to maintain brick-and-mortar branches. An advantage is that a consumer can quickly open an account online. The account can then be linked to an existing account or accounts. Savings are passed on to a consumer in the form of lower fees and higher rates. Sometimes even ATM fees are reimbursed which allows a consumer to use any ATM free of charge. The online option is the least inconvenient option, giving the consumers a choice to easily transfer as soon as a better deal is found. Consumers can start by comparing a number of online savings account. Look for an account that offers the highest rate.

Rewards Transaction Accounts (RTA) is another option. Although they have a couple of drawbacks, they sure can pay really good interest rates for being daily transaction accounts. The first drawback is that they only pay high interest rates for a limited balance, usually between $10,000 to $25,000 per account. Account balances lower than that generally gain a lower rate. Also, since RTAs are offered by credit unions and small community banks, accessibility may be an issue. The way around this is by doing banking transactions online. The last drawback: for an account holder to earn the best interest rates and ATM fee reimbursements, certain requirements must be met every month such as conducting between 10 to 12 debit card transactions, utilizing direct deposit, receiving electronic statements and logging into online banking. This means changing the banking relationship and primary transaction account for most consumers to maximise the their savings.

Significantly, Credit Unions are on the top list of institutions which gives an opportunity for account holders to maximise the earning potential of their money. Credit Unions are known for good Customer Service. They rate higher than banks in total customer satisfaction. Credit Unions charge lesser fees and pay higher interests because they are non-profit institutions. The drawback here is that they have limitations. They have fewer ATMs than huge banks.

There are advantages and disadvantages for every option. The choice may not be in every consumer’s best interest but they must carefully consider different factors. Look for just the right combination of fees, rates, features and services plus convenience when making transactions to find the best bank that will allow you to save and be financially flexible.

The manager for financial advice and education at NGS Super, Andrew Dunkerley, says the severity of the GFC led to a rethink. Now setting aside enough money to fund five to seven years of income payments is viewed as prudent.

Dunkerley notes that severe market drops can take longer than two years to get back to square one.  For example, the Australian share market took almost six years to surpass its September 1987 peak after the October 1987 crash.  The US Dow Jones index, after dropping almost 19 per cent in 1932, didn’t regain its September 1929 peak until November 1954.

Although there’s not much one can do to prepare one’s retirement portfolio for a disaster of this scale, Dunkerley says having five to seven years of income in defensive assets should help Aussies through most downturns.

How much of one’s portfolio should be set aside for defensive assets depends on the nature of investments, how much income is needed to live on, other source of income during retirement, and one’s appetite for risk.

Since growth assets have historically provided better returns, he advises a bigger percentage of the portfolio lean to more defensive assets rather than keeping all savings in cash.  Aussies who already lost money during the global financial crisis should take this strategy strongly. Dunkerley argues that a cash heavy portfolio will take longer to recover the money already lost.

Dunkerley cautions that this is not a set-and-forget strategy. Even though it is a saving strategy for the future, the need to review it regularly and re-balance investments is important to replenish the cash bucket by taking profits from the growth investments. Failing to re-balance regularly can lead to a proportion of money invested in shares increases dramatically during a bull market, and run the risk of losing much more when a correction comes.

“The greatest risk with this strategy is depleting your defensive assets as the market bottoms,” he says. “Your allocation to safe investments may also need changing as you get older, or your income needs change.”

Setting up this strategy is not complicated and can usually be done through a single account-based pension. “The only catch is to choose a product that allows you to select which investment option you’re drawing down your income from; avoid products that require you to draw down a proportion from each investment option,” he says.

Another option Dunkerley suggests is to invest some of one’s savings in annuities that provide a guaranteed income for life or a fixed period. A lifetime annuity has the added advantage of ensuring a person will not run out of money before he/she dies.  The down side is that the investment is locked away in the fund.

Account-based pensions are better, Dunkerley says, because these offer more flexibility.

Cathy McGuane, author of Financial Fitness for Kids, says it is important for parents to have their own finances in check to ensure they are good role models for children in money management.

“A lot of managing money is around your behaviour, whether you’re a compulsive spender or whether you’re a good saver, a lot of that is something that needs to be taught earlier so it becomes a habit,” McGuane says.

McGuane talks from experience. She set up savings accounts for her two sons, Jarrod, 13, and Kai, 10, at an early age and it has helped teach them about saving their dollars.

There are many savings accounts for children on offer by both banks and credit unions.  Parents should shop around and start their children early in managing their financial future.  Banks and credit unions give good incentives for kids to open accounts, knowing that starting children at a young age and keeping them is good for business and the children too.

Suncorp Bank’s kids’ saving account is one that is worth knowing. This kid’s savings account offers unlimited free transactions, has no account-keeping fees and an interest rate of 5.25 percent if $20 a month in combined deposits is made.

Suncorp executive director Craig Fenwick says these accounts have become very popular and their clients are growing rapidly.

“Ours (kids’ savings account) has been growing in terms of account numbers by about 25 percent per annum over the last 12 months,” he says.  ”A lot of people are picking them up and the balance in them is growing at a healthy 15 percent per annum that is based on the average balance.”

Fenwick agrees with McGuane that parents must be role models in teaching their children the basics of managing money in order for the children to be responsible with money when they become adults.

“Start them early and teach them the fundamentals of saving and earning money,” he says.  ”(It’s about) the appreciation not only of the importance of money but also working towards goals and also thinking about giving back too, so also making donations from time to time to a charity.”

Another high-interest account on offer for children is Bankwest’s Kids’ Bonus Saver account. It has a 10 percent interest rate if between $25 and $250 a month is deposited and there are no withdrawals.

McGuane says aside from teaching children to save cash, parents can also teach their children the value of frugality in very practical ways like understanding bills and expenses.

“Our electricity was costing us a lot of money, so I gave my sons an incentive and said to them, ‘If we get our bill below a certain amount, we will pay you a bonus to do it’,” she says.  “They became very conscious about turning off the lights and computers and we got our bill down because we engaged them in the process.”

McGuane also takes her children to the supermarket to experience and learn the value of keeping a budget.

Get your children started on their financial future with weekly pocket money for chores and encourage them to put money in their piggy bank. This will boost their confidence in saving and give them the mindset of being careful with their cash.

According to a report by Canstar, a financial research group, Aussies’ lack of interest in superannuation is putting their retirement money at risk. Factors such as complexity of superannuation guidelines and the far-fetched idea of retirement shun away Aussies into preparing for their retirement fund. However, oversight of retirement can be catastrophic with the current forecast of 75 percent of Australians are to outlive their retirement fund.

The Canstar report also discussed “it’s not really your money” and “it’s the responsibility of your employer” issues, the two most common superannuation myths that Aussies constantly debate about. Joshua Zenas, Financial Analyst at Canstar, stressed that it is rash for Aussies not to take interest in where their super contributions are going.

“Many people don’t partake in their super until they are in their 50s and by then it’s way too late to accumulate the wealth required to maintain their current lifestyle in retirement,” mentioned Zenas. “Depending on the pension isn’t the right attitude either as it’s not a lucrative form of income. If you want a comfortable retirement you need to contribute to your superannuation,” he added.

He also explained that it is wise for super fund members to take advantage of the free advise of super fund managers since they are always available to provide advice within the fund. For those serious about their retirement, Zenas adds, “It’s wise to talk to a financial adviser about your super regularly and at different stages of life as your lifestyle and financial needs change.”

Since most retirees will be counting on their super to use during their retirement years, it is important to prepare a bigger nest egg to ensure comfortable retirement years. Here are great tips on how to beef up a super fund:

It is said that every retiree will need approximately $1 million to live a comfortable lifestyle in retirement. It may seem like a huge amount but for those who want to ensure a comfortable retirement, then this is the figure they have to work on.

Discussions of increasing the mandatory super contribution from 9 percent to 12 percent are continuously on the table. Experts believe that the current 9 percent contribution is not enough to be self-sufficient during retirement. The suggested 12 percent contribution aims for every Aussie to retire on 75 percent of their final wage. Increasing the super contribution not only benefit Aussies’ future but also their present. Contributing more to their super fund lessens their taxable income.

In addition, Aussies can also take advantage of the Government’s co-contribution incentive program. It is open to low and middle-income earners and can turn every $1 of contribution into as much as $2. The amount of incentive that will be received is dependent on the yearly contribution that every qualified Aussie makes. The Government also grants favorable tax treatment for those who liquidate their assets and pay the proceeds into their super.

There are a lot of ways to be smart with super funds. Take note of every way to save and earn money with super funds. Investment management fees higher than 1.5 percent per year or entry fees are unnecessary charges. According to Australian Securities and Investment Commission’s (ASIC) superannuation calculator, based on a salary of $50,000, a small saving in fees of 1 percent can add $100,000 to your super balance over 35 years.

Members can also save on fees by consolidating multiple super accounts. This way, the super account is easier to manage, less fees are charged, and could make a substantial difference in the end balance.

Other steps can be taken to boost super funds and prepare for retirement. It is always wise to seek the advise of a financial advisor or a super fund manager to maximise the earning potential of every super account.

Enter the Christmas Club Account, a savings account for Aussies who are seriously considering spending for Christmas but would not want to incur any debt from the holiday festivities.

Louise Petschler, chief executive of Abacus Australian Mutuals, an umbrella organisation for customer-owned credit unions and building societies, says the Christmas Club Accounts are a great way to build up a lump sum in time for the Christmas season.

“You get the opportunity to incrementally save towards your big event costs with a better interest rate,” she says.  “A lot of members really value the accounts because rather than have a big credit card bill at Christmas, this in affect lets them build up their savings.”

Christmas Club Accounts are not new, although very few people know of it.  That’s because a lot of the big banks no longer offer Christmas Club Accounts, but are still readily available through credit unions and building societies.  Petschler says a lot of people are unaware they even exist.

“They are not heavily promoted as products and it’s more of a generational thing, there’s probably a lot of people under 30 who have never heard of a Christmas Club account,” she says.  “You can set them up simply and with mutuals have an automatic transfer of a small amount of money from one of your other accounts or your main transaction account.”

Abacus estimates about 400,000 Christmas Club Accounts with credit unions having an average balance of about $1500 to meet the costs come Christmas time.

Christmas Club Accounts are not entirely limited to credit unions.  Bendigo and Adelaide Bank is one of the few banks that still offers a Christmas Club account.  Bendigo and Adelaide Bank banking and wealth executive Marnie Baker says Christmas Club accounts are still widely used by their customers.

“We have many regular customers who leave the account open so they don’t close it at the end of each year,” she says. “They start again at the start of the year to save for those end-of-year expenses.”

An individual who is aged 16 or over can open a Christmas Club account in Bendigo and Adelaide Bank, and customers can deposit as little or as much as they like into the account.  Baker says Christmas Club Accounts are also commonly used for necessities in the lead-up to the festive season.

“The feedback from some of our customers is they use it to have readily available cash for their grocery bill at that time of year,” she says.  “Or they have it for a trip away.”

Christmas Club Accounts are also a good way to get customers into the mindset of saving for December 25 by having a specific account designated to do just that.

Just remember to consider early fees often apply if one withdraws money from the account well before December 25.  Bendigo Bank’s Christmas Club Account allows customers to make withdrawals from November 1 through January 31 each year without incurring any fees.

The best strategy to make the most of a Christmas Club Account is to open the account as soon as possible in order to have more money by Christmas, and for ease and discipline of saving set up direct debits from your pay account.

Remember, saving $10 a week will amount to $520 by the end of the year, so start your Christmas Club Account now.

This data assessment is supported by the Westpac New Year’s Financial Resolution Survey which indicated that 77 percent of young Aussies will do their best to put money aside in 2012.

The generation associated with living for the day without a thought for the future has seen the value of saving. This is not a surprise as more members of generation-Y move to the stage in their life where they have to settle down or purchase a home.

Purchasing a home can be achieved by anyone serious enough to tweak their lifestyle in order to save for home loan.  A change in lifestyle may mean passing on a flashy car or missing out on an expensive trip are just the beginning in creating a financial plan to purchase a home.

Lisa Montgomery, chief executive of Resi Mortgage Corporation, says with the right plan of attack, it is possible for the younger generation to purchase a home at a young age.

“If you are a first-home buyer and you are really serious about what you want to achieve financially, it’s best to take a really good look and do a personal audit on what your incoming and outgoing costs look like,” Montgomery says. “If moving home is an option, move home. If it’s not an option, you might need to look at what it is you need to do. If the alternative or buying a home with a family member or friend is there, perhaps explore that.”

A first home is not necessarily one’s dream home, and the younger generation needs to be more realistic when looking to buy a first home.

“Gone are the days whereby we can have what our folks have now,” she says. “A lot of people also choose to buy with friends or family, which helps them to realise that dream sooner.”

Generation-Y can also consider trying to qualify for the Government’s $7000 first-home buyer grant, which can be a big help.

Another option is setting up a Federal Government’s first-home saver account. Under the scheme, the Government will pay 17 percent extra for the first $5500 contributed each year.   However, the account must remain open for four years to qualify.

ING Direct spokesman David Breen admits saving for a first home is not easy but the best way to get started on purchasing a home is to start saving now.

“It may sound fairly obvious but the sooner you start and the more regular it is, the sooner you are going to reach that goal,” he says. “The key to saving is not drawing down on it. You can get into a cycle where you are saving quite aggressively but then you get hit by an unexpected bill and you are back to square one.”

One saving technique that works well is setting up a separate fee-free savings account for home deposits and having a regular savings amount going into the account.

While saving for a home, work out what a mortgage costs. Many websites can help do this, with various mortgage calculators on most banking sites.  These sites will help calculate repayments and as well as calculate the set-up costs.

Lastly, always factor in stamp duty costs – these vary from state to state, so check with the state’s revenue office.

According to the six-nation study by CoreData, a top research firm, the average household in Australia was expected to spend at least $1055 last Christmas, compared to only $815 per family in Britain. Aussie families are also expected to have out spent families in the United States with expected spending at $644 for Christmas, New Zealand which had an average of $631 per family, France with $600 and the Chinese household with merely $400.

These numbers clearly put Aussies at the very top of the Christmas spender’s list which is not much of a surprise since they consider Christmas a very special occasion for family and friends.  The data is based on household expenses which include food, decorations and gifts. The Australian way of spending will clearly dwarf that of the five other nations.

“Australians were among the first in the world to tighten their belts in the global financial crisis. But Christmas is non-negotiable, particularly for families,” said Andrew Inwood, the Founder and Principal of CoreData. He also explained that the resilience of the Australians’ Christmas spending will be underlined by the statistics.

As much as Australian households are known to tighten their spending belts in tough times, they have always been generous in giving gifts, prepared abundant food and decors especially during Christmas. This is the season for families to celebrate their togetherness and households prepare for this festive event. Some households would even save money for an entire year only to splurge it on Christmas gifts and celebrations; whilst others would open a Christmas Saver Account to assist them in their goal to save for Christmas.

Christmas is really a time for celebration for Australians. It is a time for giving, sharing and merriment with the family. Thus, Aussies are really expected to spend during this time. Nonetheless, they still remain frugal in their ways. Their wise-spending throughout the year remains, only now, they spending their extra cash which was saved the entire year or the credit they reserved for Christmas festivities. This is a time when Aussies are willingly opening their wallets to squander on drinking and dining.

In December alone, an IBISWorld research predicted that Australians will spend around $1.2 billion on retail alcohol. The research also indicated that Aussies’ booze purchases will rise by a record-breaking 5 percent during the holidays. This is a result of the rising popularity of wine and beer becoming a staple in every household meal.

The strong price and dollar drops because of the competition between Woolworths and Coles has pushed a boom in foreign “craft” beers and wine, the industry experts said. In the English-speaking world, averaging 10.61 litres this year, Australians are amongst the top drinkers. This is in comparison to the 10.58 litres in the United Kingdom and only 8.42 litres in the United States. The high volume of intake of wine and alcoholic beverages is attributed to wine’s presence in every Aussie celebration.

There are two different ways of saving – being thrifty and being frugal. Being thrifty means practicing methods to preserve funds whilst being frugal is more directly related to practicing economic measures in the course of purchasing goods and services. Now, practicing frugality will earn huge savings that will make a big difference in a monthly budget. Never be content with service providers for a long period of time. They constantly come up with different deals and new promotions from time to time. From mobile phone plans to credit cards to home loan deals, these products often come up with the most enticing deals and packages to attract more customers. Here are a few tips on how to determine when it is about time to switch service providers:

Mobile Phone Service

Avoid mobile phone plans with complicated add-on services. These services cost consumers unnecessary expenses. Most of the time consumers avail of bundled plans because the savings from getting the package looks convincing compared to availing products and services separately. It really does provide consumers some form of saving especially for those who really use the services that are bundled. However, not all consumers who avail of these bundles benefit from it. Consumers should look for plans with similarities to their spending pattern. For instance, for those who simply use their mobile phones for calls and texts should look for service providers who offer a flat rate for unlimited calls and texts; for those who use a more advanced mobile phone like iPhone, Blackberry or Android phones which offer certain services specific to their mobile then they can choose a plan intended for these mobile phones.

Credit Cards

There are different types of credit cards with different interest rates, rewards and privileges, all designed to suit different needs of different credit cardholders. However, a common denominator amongst all credit cards is its interest rate. If the cardholder is like many Aussies have an average credit card debt of approximately $5,000 and repay approximately 20 percent per annum in interest, switching to a credit card that charges only 10 percent interest per annum automatically saves the cardholder around $24 a month.

Home Loans

Home loan lenders are the fastest to change rates especially now that there is a slump in the lending and property market. In addition, the Reserve Bank has either lowered the official interest rates or held off any hike in rates. So, check out for newer and better deals especially with the removal of exit fees on home loans, borrowers have more freedom in shopping around for a better option without the worry of the high cost of shifting from one loan to another. Also, refinancing is becoming a fast-growing option for a lot of home owners because of its practicality. Check out comparison websites for up to date interest rates of different bank and non-bank lenders.

To illustrate further, a 25-year home loan acquired with a standard variable rate of 7.8 percent per annum will earn an extra $67 in savings each month if it is refinanced at a new rate of 6.58 percent per annum – a total savings of $20,175 in interest over the life of the loan.

Consumers should familiarise themselves with key actions that will allow them to save money. Sometimes, consumers fail to recognise the importance of the basics of saving money, that even the littlest amount that can be saved, when added up over a period of time or added up with other savings, can total to a substantial amount too.

Some households constantly find ways to increase their income to boost the household budget. However, a sensible approach would be to cut unnecessary expenses first – SIMPLIFY. This way any added or new income acquired by the household can go into savings or investments instead of debts. Typical household expenses can be reviewed and simplified to allow huge savings for every household. Dining out is an unnecessary expense and can be very costly. If dining out cannot be completely avoided, then making it less frequent would be a good start. Home cooked meals are cheaper and healthier.

Live a healthy lifestyle. Kick out unhealthy habits such as smoking and save not just on the cost of cigarettes but also on possible health care expense brought by such habits. Take a short walk instead of using a car when running errands in short distances. Make walking a habit and it may even replace a workout at the gym. These actions may seem minute but it is very practical and practicality is always an effective way of saving.

Savings can be earned from a household’s biggest financial responsibility. Whether it is a mortgage or credit cards or personal loans, savings can be achieved through loan consolidation. Yes, some banks allow credit card loans to be consolidated with mortgages. Also, banks offer lower interest rates for consolidated loans. For instance, to entice customers to consolidate their loans, banks constantly offer Zero percent interest rate for credit card balance transfers. Consumers can always take advantage of this service. After which, discard all other credit cards and maintain just one. This will lessen the temptation of acquiring new debts. Make sure to choose a low rate credit card especially if monthly balances are not paid in full.

Next step is to get rid of anything expendable. From cable TV extra channels to barely used mobile phone and broadband services, assess which services are actually used and look for the most affordable deal. Avoid the temptation of getting bundled services especially if not all services are consumed. Even in the consumption of electricity and gas, choose the cheaper provider. Also, older appliances are less energy-efficient. So, checking out the efficiency of appliances in saving water and electricity and opting for newer appliances can cut down a household’s utility expenses without putting much effort to it.

Furthermore, households save on their daily expenses not by avoiding purchases but by purchasing wisely. This can be done by availing of discounts and bargains. Household items such as food, toiletries and cleaning materials are regarded as essential expenses; thus, it is a necessary part of the household budget. Saving on these items are acquired only by discounts or opting for cheaper brands.

There are a lot of ways that a household can save on their expenses. They can be as creative and ingenious in saving to be able to stick to their budget and still have money to put in their savings.

The Bank of Melbourne have come up with a genius solution in the form of their new SENSE Account.

A linked transaction and savings account giving you the facility to save money automatically, whilst giving you one monthly statement so you can see exactly what you’ve saved and what you’ve spent.

So How Does It Work?

The first part of the SENSE Account is your standard transaction account. This diverse account allows you to transfer cash, set up standing orders and direct payments, and gives you access to phone and Internet banking.

It also comes with a debit card giving you access to millions of ATM machines when you want to withdraw cash, and gives you the facility to make purchases in stores on online without having to carry your wallet.

In regards to fees this account is very cost effective. Most day to day transactions are completely free, although things like periodical payments and overseas cash withdrawals do carry a small premium.

Whilst there’s a $5 account management fee, customers can avoid this by depositing at least $2000 into the account each month. A strong possibility if you make this the place your wages are paid into.

So what about the savings aspect of SENSE?

Saving With SENSE

Savers get a pretty competitive rate of interest with the Bank of Melbourne. Currently the standard rate of interest on this account is 4.60% across the board, no matter how much or how little you put away.

One of the most ingenious features of the SENSE Account is the “Rounding” feature which allows you to save automatically.

When you make a purchase using your debit card, BPAY, or Freedom Card how ever much you’ve spent is rounded up to the nearest dollar, and the rounded up amount is automatically deposited into the savings segment of your account.

If for example, you made a purchase of $10.20, your SENSE Account would automatically round it up to $11.00 and deposit the 80c into your savings account. Whilst this doesn’t seem much at first glance when you consider how often you use your debit card your savings will soon add up.

Don’t forget, you can still transfer money between your accounts whenever you feel like it using phone or Internet banking.

The SENSE Account let’s you stay in control of your budget by giving you a full breakdown of where you’re spending your money. Set up different categories and you’ll be able to see at a glance how much you spend on groceries, travel, luxuries etc.

You can also set yourself savings targets and see on your statement how close you are to achieving your goals.

We’ve certainly not come across an account that gives you the flexibility and control the SENSE does.

“Is It Right For Me?”

If you like things to be kept as simple and organised as possible then you can’t go wrong with the SENSE Account from The Bank of Melbourne. Two easy to manage accounts under one detailed statement, automatic savings, and low fees.

What else could you possible want from a bank?

1. By opening a young saver account you are providing two big opportunities in the lives of all children who are given such an opportunity. One is that it teaches them the importance of saving at an early age and secondly they will see a benefit early in life. Armed with these two important lessons it will be most probable that the same habit will last a lifetime and the child will grow into a good money manager.
2. It is most important that parents start their children off with a regular saving routine as early as possible. Even when the child is born, if this is possible. When saving money time is one of the most important factors involved. The more time you have to accumulate money the better you will see the magic of compound interest help it grow. In fact if you can put away a modest $50 a month in your child’s young saver account, from birth, the account would have at least $20,000 in it by the time he or she reaches matriculation.
3. It is also important to learn to save for the important things in life, as borrowing is far more expensive. When you build up a regular savings balance it is actually it is you who gets paid interest for saving. When you borrow it is you who pays the interest to the lender.

People’s Choice Credit Union Have Designed a Very Useful Young Savers Account.

People’s Choice Credit Union, one of Australia’s largest credit unions, following the merger of Savings & Loans and Australian Central credit unions, have devised a young saver account that has the child foremost in its design. It is a great way to start your child off in being knowledgeable about money matters. Some of its main features and benefits include:

• No restrictions put on any deposits.
• Bonus interest is paid monthly when no withdrawals have been made.
• Online access is available as is phone and SMS banking.
• Unlimited and free BPAY as well as deposits.

You are also able to arrange payroll splits to help boost the amount of savings as well as receive bi-annual statements. Monthly statements can be arranged if you a qualifying account. If you wish you can choose to receive your statements online.

Set Goals Right From The Beginning

Before you start investing in your child’s People’s Choice Young Saver Account you should sit down and work out some goals you want the account to achieve. Everything to do with money is easier if you set achievable goals. You need to work out how much you would like to have in the account by the time the child is ready to matriculate. Make sure you set a certain amount and don’t generalise or be vague in any way. If you do this you will find it hard to stick to any worthwhile contribution regime. At this point you could decide to devote a certain percentage of your income to the account each month. Whatever you decide to do make sure it is a real goal and that it is achievable. This will make it easier to stick to over the long term. Simply tell yourself the best investment you will ever make is in your own children and a People’s Choice Credit Union Young Saver account is one of the best ways you will find of doing it.

Invest With the Strength of a Credit Union

Another important factor in saving over a long term is to make sure the financial establishment you are investing in is going to be there for the long haul. This is where you gain when opening a young saver account with People’ Choice Credit Union. Following the merger Australian Central and Savings & Loans credit unions in December 2009, the new credit union, People’s Choice, emerged with 350,000 members and $7.4 billion in assets and managed funds. This merger made it one of Australia’s biggest credit unions.

By its structure, in being a credit union, it doesn’t have to answer or pay dividends to any shareholders as do the big banks. People’s Choice Credit Union is fully owned by its members and is designed so that any profit it makes comes back into the credit union in the form of lower charges and improved products. When you open a Young Savers account with People’s Choice and pay the $2 share, you too will be a member and entitled to vote for directors and at any general meetings the credit union holds. This means you have an equal say in how the credit union runs alongside the other 350,000 members.

A Christmas Savings Account Imposes Discipline

One of the main advantages of having a Christmas savings account is that access to the account is restricted. This means you can only withdraw money from it during the actual Christmas period. You can probably do the same thing with a high interest savings account, as long as you have confidence in your own discipline of being capable of leaving it alone. However, just to be safe a dedicated Christmas Savings account will act as that disciplinarian for you, leaving all your saving intact until the time comes to access them – at Christmas time. If you set up your People’s Choice Christmas Savings account right after the previous Christmas, you will give yourself the whole year to accrue savings as well as give you more time to make deposits.

People’s Choice Christmas Savings Account Features

A People’s Choice Christmas Savings account will stop financial stress from occurring at a time when you should be enjoying yourself. All it takes is a little planning and an ability to make regular contributions. While you can make contributions all year round whenever you want to do so, you can only withdraw money from the account between November 1 and January 31.

Main details of the People’s Choice Christmas Savings account include the following:

• There are no restrictions on the amount of money you deposit.
• You can keep up to date with where your account stands at any time with online access, phone banking or SMS banking.
• During the access period (November 1 to January 31) you will have unlimited free withdrawals through BPAY, internet banking and phone banking.
• You will be able to deposit money into the account via payroll splits.
• Obtain transaction details bi-monthly when your statements arrive, or if eligible by having a qualifying account, by monthly statements. You will also have the option of receiving online statements.

Millions Prefer Non-bank Banking

There are 4.5 million Australians doing their banking with either credit unions or building societies in Australia today. This is proof of the faith so many people place in financial organisation they can actually feel a part of belonging to, rather than a bank that owes its allegiance to its shareholders. Credit unions such as People’s Choice and building societies plough back their profits into their organisation thereby they can develop better products at cheaper costs. In many cases some fees have been able to be eliminated altogether. Credit unions such as People’s Choice as well as building societies offer the same products as do banks but because of their differing structure, and interests, can continuously come up with a far better deal.

People’s Choice Credit Union is able to use their members money, that has been deposited with them, by lending it out to other members as loans for various purposes. The interest charged for these loans goes towards paying the interest on the deposits. It is a win win situation for all involved. You too can become a member simply by opening a Christmas Savings Account and paying a $2 membership fee. This will entitle you to vote in the annual Election of Directors, which gives you a say in how the credit union runs. You can also have yourself nominated for election to the board if you wish to do so.

What Is People’s Choice Credit Union All About?

You can probably be excused for wondering who exactly is People’s Choice Credit Union. Especially if you are not one of the 350,000 members. People’s Choice came about in December 2009 as a result of the merger between Australian Central and Savings & Loans credit unions. This merger created a financial body with $7.4 billion in assets and money under management.

If you have found difficulty in saving for the Christmas just gone, or if you are concerned at your current financial situation after getting your first bill from your credit card provider following the Christmas break, then maybe you should seriously consider opening a Christmas Savings Account with People’s Choice Credit Union. It is one certain way of ensuring you will have sufficient funds available when you need them the most. It will only mean you putting a little money aside each pay day. You could also use the account to deposit your taxation refund cheque in. However you go about funding it, one thing is certain, and that is when next Christmas comes around you will once again need to access extra money from somewhere. If have created a source of funding, such as a Christmas Savings Account, the money will be there. This will ensure your going into the new year will be far less stressful  state than otherwise.

People’s Choice Credit Union Encourages Savings Through its Bonus Saver Account

People are now saving once again, it fact they are doing it so well many retailers are starting to complain about them not spending enough. People’s Choice Credit Union is one such body that is encouraging people to save even more. The argument appears to have gotten through that it is cheaper to save in order to get what you want rather than borrow for it. If you save, People’s Choice will actually pay you for doing so by adding interest to your savings. If you borrow to get what you want it will be you paying interest to your lender for the privilege of borrowing.

One of the ways People’s Choice Credit Union is encouraging further saving is its Bonus Saver Account. This account will pay bonus interest into your account, over and above the usual interest rate, every month when you don’t make any withdrawals. It also:

• Has no minimum deposit restrictions attached to it.
• Easy ways of getting to your account via online banking, SMS banking and phone banking.
• One free withdrawal a month and unlimited free BPAY and deposits.
• Arrangements can be made whereby payroll splits can be made to boost your balance  and facilitate you sticking to your savings plan.
• You can have the option of receiving online statements or accept bi-annual statements. Monthly statements can be arranged if you have a qualifying account.

The People’s Choice Credit Union’s bonus saver account is designed to give account holders the extra incentive they need to stick to their savings goal. It does this by offering a high interest rate combined with the opportunity  to earn yourself extra bonus interest points. It is expected that this will encourage you to get to your savings goals sooner.  

To Save Successfully You Must Follow a Regular Pattern

It is generally accepted that in order to be successful at saving you must first set, and then follow, a regular savings plan. Even a relatively small amount of money deposited on a regular basis will grow to a substantial amount if you stick to it. This is the beauty of using compound interest. It is the same whether you be saving for a car, a deposit on your own home, a holiday, or any other worthwhile purpose. You will always achieve your goals faster if you stick to your plan. A bonus interest incentive will help you by encouraging you in rewarding discipline.

People’s Choice Credit Union is a good place to earn money on your savings  as it is now one of the biggest credit unions in Australia. This has come about following the merger of Australian Central and Savings & Loans credit unions in December 2009. The new credit union that emerged, People’s Choice, inherited 350,000 members and $7.4 billion in assets and other holdings. This increased membership base and vast pool of assets means its members benefit more than ever before.

A credit union such as People’s Choice is fully owned by its membership and all profits it is able to make is used to lower costs to its members and in developing even better products. A bank on the other hand actually exists for one purpose and that is to make a profit for the betterment of its shareholders, not its customers. Credit unions and building societies are therefore able to be more flexible in their looking after the interests of their members.

How to Become a Member of People’s Choice Credit Union

All you need do to become a member of People’s Choice Credit Union is to open a Bonus Saver Account and pay a $2 share. This will give you full membership and entitle you to vote at Annual General Meetings, even stand for election to the board of directors if you wish to do so.

There are many benefits to be had when you become a member of People’s Choice Credit Union not the least to be able to save your money at a high interest rate and pay lower fees while doing so. There is also much to be gained in the knowledge that the money you save is used to loan to other members. The interest they pay comes back to you in the interest you get for banking your money with People’s Choice Credit Union in the first place.

People’s Choice Credit Union is such a member owned financial organisation. A credit union that is able to offer its members a large range of financial products in banking, insurance and investment. People’s Choice Credit Union was formed as a result of a merger that took place between Savings and Loans and Australian Central. Today it has more than 350,000 members throughout Australia.It is regarded as an exciting credit union in that it offers a new way of banking. All profits are ploughed back into the People’s Choice Credit Union funds to facilitate the creation of better products and services for its members. Everything it does is designed to benefit members and their communities.

The People’s Choice Everyday Account is a good example of what can be achieved when a financial organisations main goal is to better the banking experiences of its members above all else. It is an account that has everything included to facilitate the day to day banking transactions of its members while at the same time allow affordable and easy access to the funds in the account whenever the member requires it.

If you are looking for an account where you can enjoy unlimited selected transactions for a low monthly fee while at the same time earn reward benefits on some of those transactions, you will need to consider a People’s Choice Everyday account. Any bonuses earned while carrying out certain transactions can be paid directly into your account, or donated to a charity you choose yourself, therefore helping to support worthwhile social causes.

Main Features of a People’s Choice Everyday Account:

• The issuing of bi-annual statements. This cuts down on unnecessary paper usage as statements can be accessed online at any time. However monthly statements can be arranged if members have an account that qualifies for a monthly statement cycle.
• Reward benefits can be earned with an Everyday or Loan Offset account. This means you will receive a cash reward every time you pay for a product you purchase by using your Visa debit card and select ‘credit’ when paying. You also earn reward points when paying by BPAY.
• Easy access to your money at any time of the day or night. Your Visa debit card will allow you to access your account through Redicard outlets, Bank@post, EFTPOS or any available ATM twenty four hours a day seven days a week.
• Convenient account management. You will be able to gain access to your account any time you need to do so through internet banking, SMS banking, or phone banking.
• Convenience of ’set and forget.’ You are able to set up recurring payments and direct debits through internet banking, or if you prefer at your nearest People’s Choice branch. If this is not convenient you can People’s Choice Credit Union direct.

People’s Choice Everyday Account Options

The three major options you can avail yourself of with an Everyday account are:

1. You can arrange to receive monthly statements online.
2. Apply for overdraft facilities.
3. Request cheque book facilities.

Becoming a Member of People’s Choice Credit Union

It is easy to become a member of People’s Choice Credit Union. All you need do is to purchase a $2 share. This $2 entitles you to part ownership  and access to its wide range of financial products and services. It also give the right to vote at the annual election of directors. To apply for membership you can call in at a People’s Choice Credit Union branch, through Bank@Post at any Australia post outlet, or by calling the credit union direct. You will also have to have sufficient identification available.

Identification Documents

The minimum documentation you will require will include the following:

• Primary identification with photograph which includes; a current drivers licence; an Australian passport either current or no longer than two years from its expiry date; current foreign passport; student ID card; proof of age card; current firearms licence; indigenous community photo ID card.
• Primary identification documents without photograph; Australian birth certificate or extract; Australian Citizenship Certificate; Pension card; Health Care Card; Veterans Affairs Card.
• Secondary documents; Utility bills (no longer that three month old); council rate notice; Australian Tax office notice; Centrelink notice; recent bank statement; electoral office record; housing trust record.

No Hidden Fees

There are no hidden fees in People’s Choice Credit Union Everyday accounts. However if by chance you have chosen the wrong product for the use you want to put it too, fees can sometimes be incurred. A good example is the excess withdrawal fee. To avoid paying unnecessary fees you need to check the type of account you have to suit your particular type of banking requirement. If you are over 55 you will be eligible for a Club 55 account. An account with high interest rates and very few fees to worry about.

One of the products People’s Choice Credit Union are very proud of is its Offset Savings account. Your People’s Choice Offset account is a way of cutting back on the amount of interest you pay on your home loan account, this means your offset account and your home loan account have to be linked. Home loans that feature an offset account such as this can then be used as a regular savings account, a simple transaction account or both. You can arrange to have all your wages, and any other income you earn, paid into the offset account. You are then able to access these funds through an ATM via a debit card, EFTPOS or through online banking. The more money you can deposit into your offset account the more interest it can earn on a daily basis. The interest is normally paid at the same rate as the home loan rate therefore the interest earned is 100 percent offset against the home loan interest thereby reducing the interest you are being charged on your mortgage.

In theory your offset account works by repaying a part of your principal loan. This means if you have a $300,000 mortgage and you also have an amount averaging $10,000 in your People’s Choice Offset Savings account, you will only be paying interest on $290,000. Since your minimum monthly repayments will be calculated on $300,000 you will effectively be paying more off the principal. By doing this you will be paying your loan off much faster.

People’s Choice Offset Account will give you the convenience of a regular savings account and at the same time allow you to reduce the interest you pay on your home loan. You will also be eligible to obtain certain reward benefits that can be paid directly into your account or donated to a charity of your choosing.

People’s Choice Offset Account Features

The main features of a People’s Choice Offset Account include the following:

• Easy access to your account 24 hours a day seven days a week. You can always access your account whenever you have the need to do so through online banking, SMS banking or phone banking.
• Access to your money any time you need it. You will always have access to your savings in the offset account through your Visa debit card by being able to withdraw your funds via an ATM, EFTPOS or Bank@Post. You will also have the option of using a rediCARD PLUS card.
• Reward benefits. Reward benefits are able to be earned when you purchase goods  through BPAY or your Visa Debit card when you choose ‘credit.’
• You will receive monthly statements.

People’s Choice Offset Account Options

There are a total of three options of which you can choose to include in your offset account if you wish to do so, they are:

1. The receiving of your statements online. In this way you are able to contribute to the protection of the environment by lessening the need of paper statements.
2. Overdraft facilities. Always a handy option to have should you need it for some special purpose.
3. Cheque book. Although most bills are either paid online or through your Visa debit card there is always the off chance you will need to send a cheque. It is a good option to have up your sleeve to complete your financial arsenal.

The Advantages of Having a People’s Choice Offset Account

The advantages of having an offset savings account will include the following:

• Reducing the time it takes to pay off your mortgage. This is probably the main reason for using an offset savings account. You can save many years of paying off your mortgage meaning a savings of many thousands of dollars over the period of the loan.
• Counteracting the effect of compound interest. The interest you have to pay on your home loan is calculated daily at compound interest rates even though it is only added to your account monthly. This can be quite a considerable amount of money, particularly in the early years. Reducing this amount of interest through the interest earned on your savings is an ideal way of economically managing your finances.
• No tax payable on the interest saved. This is a bit like beating the system but it is above board and quite legal. You are only liable to pay tax on any interest you earn, not on any interest you save. In this case the interest earned from your savings goes directly to your loan repayment and never shows up in your savings account, it therefore becomes interest saved, not interest earned.

The variety in investment options leave super members baffled considering the choices they make could mean a huge difference in their possible retirement money. Nonetheless, some members still opt for funds with lower but guaranteed returns as these types of funds are generally low-risk, thus, offer them peace of mind. Financial experts advise super fund members of asset allocation wherein members split their money between different types of investments such as property, cash or shares. Still, the nitty-gritty of the asset allocation vary among fund managers.

Jeff Bresnahan, Managing Director of SuperRatings, explained that the choice of assets or asset allocation can have a huge effect on long-term investment performance. For instance, a “capital stable” investment option has minimal exposure to risky assets while a “high-growth” option has allocated most of its assets in high-risk choices such as shares.

“Asset allocation remains the most important determinant of investment returns,” said Bresnahan. “Performance variance can be significant, even between two funds that may both be labeled ‘balanced’.” According to SuperRatings, the difference between the best and worst performing balanced super fund is almost $40,000 over the past 10 years.

To expound further, SuperRatings cites that if both balanced funds began with a $100,000 investment in September 2001, the best performing fund would have earned $185,000 now compared to only $125,600 for the worst performing fund.

In the past 12 months, the difference between capital stable funds and high-risk funds has grown to almost 7.5 percent. The data from SuperRatings showed that capital stable funds generated a 2.8 percent return whilst the average high growth fund descended by 4.6 percent, losing money for its investors. SuperRatings’ review of the performance of these two types of investment during the past five years revealed the performance gap between the two and its effect on long-term wealth accumulation. It showed that capital stable funds generated a 3.1 percent yearly profit whilst high growth funds continuously lost an average of 1.9 percent annually.

Warren Chant, Superannuation Analyst and Director of Chant West, advised that now is not the best time to switch investments from high-risk to low-risk assets except for those nearing retirement. “Some fund members must again be feeling the temptation to switch their money in to cash or some other low-risk option,” said Chant. “They need to remember that superannuation is a long-term game. Unless they’re within sight of retirement, they could be doing themselves more harm than good,” he added.

Managing super funds can be a tricky, thus, constant communication with the fund manager or a financial advisor is essential.

Gen Y, as most people born from 1982 to 2000 are called, came out tops in the recent Westpac New Year’s Financial Resolution Survey. 2000 Australians were quizzed on their financial habits going into 2012 and found three out of four Gen Ys were focused on saving more.

On a national basis, the survey found 77 percent of Australia’s Gen Y wants to save money in 2012 as compared with their elders at 55 percent.

“Gen Ys were keen on saving more compared to older generations,” Westpac spokesman Sinclair Taylor said. “They’re keen to put money away for the future, which I think is a great sign that the younger generation is taking saving seriously.”

Queenslanders are among those determined to save more money come 2012, the Westpac survey found.  The survey showed 43 percent of Queenslanders had made a financial resolution for the New Year.

About 64 percent of Queenslanders wanted to know more about finance, which is higher than the national 60 percent.  Whilst, 38 percent of Queenslanders admit they lacked the knowledge to make an economic decision.

Almost half of Queenslanders had a household budget (48 percent) but most felt they were not equipped to manage their budgets (83 percent).

Ipswich resident Sarema Chong, 22, an artist who also works in retail, said her new year’s resolution was to save $10,000 by September so she can buy her first home.

“My plan is to save $40,000 by September and I already have $30,000 saved,” she said.  ”My parents are matching what I saved so I hope to reach that goal. I’ve been saving since last year. I’m saving about $500 to $600 a week. I work full-time and I also sell paintings as well.”

Meanwhile in Adelaide, Sophie Murray, 22, has moved out of home and plans to save as much as she can next year. She has resolved to save an amount each week, whether it is $5 or $50.

“I have gone back to university and am working casually. I want to save a percentage of what I earn each week,” she said. “I have got two separate bank accounts. I have a spending account and then I have an account that gets money transferred from my pay.”

Westpac’s Taylor said keeping a diary on spending habits was a good way to try and kick-start a healthy financial situation in the New Year.

“Keeping a diary is a great way to reinforce where your spending is,” he said. “The big-ticket items like your mortgage or rent, most people are aware of that coming out of their account. It’s those smaller transactions and often the cash ones where we don’t get a receipt … that add up fairly quickly.”

In Tasmania, nearly two-thirds of respondents have a goal of saving money in 2012.  Although, the Westpac survey also found that 45 percent of respondents to the survey did not have a household budget.

Westpac Tasmanian general manager David Fagan said that setting financial goals and starting a budget were two of the most basic steps, and should be a good start for the 64.7 percent of the Tasmanians surveyed who wanted to save more.

The Westpac survey backs up findings in a worldwide survey by ING Direct that found 34 percent of Australians wanted to save more this year. It also found one-in-four wanted to reduce personal debt.

Anglicare senior financial counsellor Anthony Plisek believes this is due to an increasing awareness of the pitfalls of credit where accruing interests can lead to a debt pit.

“The catch cry now is to save now and buy later rather than as it was in the past; buy now and pay later,” he said.

Plisek, who has a team of 10 financial counsellors around Tasmania, confirms that Gen Y was much keener to manage its money and not just live for today.

He offers a savings tip where money plans and budgets were critical to savings. “What the budget does is show where you are at financially and shows the income and outgoings,” he said. “People should have a realistic savings plan and have the discipline to stick to those goals. Avoid the high cost of credit by saving now and buying later.”

Plisek also laments that many of Anglicare’s 2011 clients were struggling to cover living expenses due to a lack of money plans and budgets.

Co-ordinator of the NILS (no interest loans scheme) Network of Tasmania Inc, Rick Tipping, offers an out-of-the-box savings tip. He said a savings circle with a few friends proved to be a successful formula in low-income areas.

“You need a secure, agreed bank account to put the savings in and you need to keep a record of how much each person saves,” he said. “You decide on a pay-out date and then simply save as much or as little as you can. You receive only what you have saved. It is amazing how a little each week or fortnight can mount up.”

Tipping also pointed to matched schemes savings as a good way to start saving. These schemes, available through NAB (the AddsUP program) and ANZ (SaverPlus), may yield up to $500 in dollar-for-dollar matching of savings for eligible people.

It’s one financial goal that has become a social phenomenon what with the growth of game shows, lotteries and casinos enticing the common man to make $1 million the easy way.

While the sensible man’s search for $1 million spurred the growth of professions that help the common man become financially savvy or be business oriented.

Psychologically, having access to $1 million can provide a sense of financial stability and freedom even if it does not guarantee financial success for life.

Saving $1 per day of course is not enough.  Without interest, $1 a day would take 1 million days to reach a $1 million. 1 million days or 2,739 years is too long to save for $1 million.

Financial planning specialist Colin Williams believes that having simple and realistic financial strategies in life can help would be millionaires achieve this goal.

“These tips obviously don’t take into account the effect of tax, or recommend one investment asset over another,” he points out. “They simply break down the facts to give you a practical guide of reaching the magic $1 million mark.”

Opening a savings account in Australia is easy and convenient; one can even open a savings account online.

Always remember that for a savings plan to succeed one must commit to increase the bank balance at a regular pace weather adding weekly, fortnightly or monthly to the initial deposit.

The initial deposit can be as low as $100, $500, $1000 or worth much more. Whatever the original balance, the commitment to regularly add to the savings is what is important.

Understand the benefit of interest on interest, which is compounding interest.

“It works like this,” Williams explains. “You start with a lump sum of say $100 and earn 10% interest, which equals $10 in interest to you. Your new total is $110. You now invest the new amount ($110) and earn another 10%, earning $11 ($110 at 10% = $11). This keeps repeating itself and creates a snowballing effect.”

Understand one’s risk profile

Failing to understand one’s risk profile can cost a savings plan to fail.  Know that chasing higher earnings which can result to bigger profits for an account balance means taking on greater risks.

“We have all seen where that can lead to, with some share and property asset values collapsing in recent years,” Williams says. “As a rule of thumb, the longer the time frame you have without needing access to your savings, the more risk you can afford to take with assets like shares and property.”

Settle on a level of risk that is comfortable, it may take a little longer to reach the $1 million mark but it’s better than quitting on a goal because of stress and anxiety. Inflation can be good and bad

Inflation will impact the purchasing power of money and the actual worth of $1 million.  It may also have the impact of increasing one’s income and thus hastening the arrival of a seven figure savings even sooner.

An inflation rate of 3% gives an average annual income of $50,000 increase by around $1,500 in one year. That is $1,500 extra money in the bank earning interest.

Don’t put your eggs in one basket

It’s an age old adage, but how many out there are actually heeding it?

“Diversifying investments into different asset sectors by having a mix of shares, property and cash investments can reduce your overall investment risk,” Williams says.

Slow and steady wins the race

Get rich quick programs are generally scams, but many still fall for it.

“While warnings about scams are constantly in the news, people still keep falling for them and losing their hard earned savings,” Williams says. “Remember these two things: one, if you don’t understand it, don’t do it, and two, if it sounds too good to be true, it probably is.”

As many of us know, banks exist to make a profit. To that end, they’ll do, say and advertise just about anything to get you in the door and putting your money in one of their accounts. It is for this reason that it’s wise that you make sure you know exactly what you’re getting, especially when you’re looking at savings deposit accounts such as high interest savings or term deposits.

Banks will often advertise a very high interest rate for their savings accounts – but what they don’t advertise is that it’s only for a limited time. Another thing they’ll do is advertise that high rate, but not tell you that there are conditions that should be met. These can both cost you more than they make you, so you should be on the lookout.

Introductory Rates

If you’ve ever used a credit card, you’re probably no stranger to the world of introductory rates. With credit cards, the introductory rate is a very low rate, usually around 12 or 13% with credit cards. In the world of savings accounts and term deposits, it’s instead a very high rate. The advertised rate could be 4% to 5% or even more. These rates are used to lure you in, then you find in the terms that they’re actually introductory rates, and will only last for a year, sometimes less!

While these rates can be great for the year that you have them, you should probably consider that a red flag and start looking for other conditions that could affect your interest rates. These can include things like…

Minimum Balances

A minimum balance is required on many accounts with high interest rates. In order to earn the full 4% or 5%, you have to keep an amount such as $2,000 in your account. Granted, the interest on that $2,000 is going to be between $80 to $100 at that rate, but the catch is simple. If your balance is $1,999.99 or lower at any point during the month, you’ve given up your interest rate, even if you immediately deposit more money into the account. Your interest rate will revert to a lower rate, or worse, you could be charged an “account keeping” fee.  And while we’re talking about weird conditions…

Maximum Withdrawals

Some of these accounts will only allow you to withdraw so much per month, despite your account’s balance. Another variation of this is that you can only make a certain number of withdrawals in a given time period such as a month. If you go above the amount you’re allowed to withdraw, or withdraw more times than you’re allowed, you’re no longer going to qualify for your high rate, and you could even be charged a fee, depending on the account’s terms and conditions.

Any time that you’re considering a new high interest savings account or term deposit, keep an eye out for these:

• What are the terms for the bonus rate?
• Are there any balance requirements?
• What are your withdrawal limitations?
• What are the transfer times?
• Do they require linked accounts?
• Are there restrictions for clients from other banks/institutions?

AMP understands that people will want to find transaction accounts with different benefits. Some will want to find something that is affordable to work with. Others will want something that features high rates. The First Account from AMP is an account that will provide you with both of these features.

This is a unique type of account that will allow you to get a higher interest rate on your money. It will also allow you to get as many transactions as you want in one month for one low charge. This is a type of account that can be found through AMP, one of Australia’s top financial services companies.

Your account can work with as many transactions as needed. It will also work with one of the best rates that you could find in a transaction account. The fact that you can get a consistent rate regardless of the amount of money that you have in the First Account will help you to earn money.

How You Can Get More

The First Account will feature a higher rate than what you might get out of other investments. A variable rate at 4.65% will be used in this account. This can be nearly 1% higher than what you might get out of an online savings account. It will also be much higher than the 0.25% or so that you might get out of a typical transaction account.

In fact, this 4.65% rate will be the standard regardless of how much money you have. It can work for you when you are getting either $1,000 in your account or $10,000.

The Fee Is Easy To Afford

You will have to pay a monthly fee of $5 on your account. This is actually a very affordable account for two reasons. The first is that it can be a small fraction of what you have in your account. The second is that the $5 fee will allow you to get as many transactions as you want out of your account.

The $5 fee will give you unlimited access to all sorts of transactions. You can use the following types of transactions:

• ATM; this will work for all rediATM network machines
• Cheque
• BPAY
• Online payments
• Phone payments
• EFTPOS
• Australia Post payments

Also, you will not have to pay any additional fees unless you deal with unique types of services. These include services for getting duplicate copies or taking care of cheques that have not been able to go through the first time around.

How To Deposit And Withdraw Money

You can also handle the money in your First Account with ease. You can do this with online banking. First, you should review how deposits are made. AMP does not have any physical offices or branches. However, you can get deposits handled at an Australia Post outlet. You can find these outlets all around the country.

You can withdraw money from your account at any ATM in the country. You can get as much as $1,000 withdrawn at a rediATM or $990 with an ATM that is not in the rediATM network. You should be able to get to an ATM in the rediATM network. This network covers nearly ninety percent of Australia’s population. You can get a larger amount of money transferred with AMP’s online banking service.

These features can work at varying times of the day. This is because the online services from AMP can work all day long. You might not be able to get some transactions handled until business hours resume in some cases. Be sure to watch for this when getting a transaction covered.

Other Features

There are a number of other points that can allow you to take advantage of what AMP has to offer:

• You can get online assistance at any time. AMP’s Virtual Assistant can help you to solve any concerns that you might have with your investment. You can use this service to help you figure out what you can do and how you can get any concerns handled.
• Your deposits can be guaranteed. A full guarantee will be used by the Australian government. This guarantee will cover all deposits of values up to a million dollars. This can work for free from now to 12 October 2011.
• The interest rate that you will get on the First Account will be an ongoing rate. This means that it is not a promotional rate that might only work for the first few months that you have an account for.

Who It Works For

There are many people who could easily take advantage of this useful account service. For example, you can use the First Account if you are someone who needs to get something that can handle not only your savings needs but also the transactions that you need to get taken care of. It can be convenient to have one account that works with these two functions in mind.

Also, you can use this type of fund if you have a larger number of debts to take care of. The problem with having plenty of transactions in a month is that you could deal with overdraft fees. This problem can be easily avoided if you use a transaction account like this. This is because you will not have to deal with any limits with regards to the number of transactions that could be made in a given period of time.

You can also use this account even if you do not have a good amount of money to use. The same interest rate will be used on all levels of money. Therefore, you can get the same beneficial rate that a wealthier person can get by using just a small amount of money in your account.

These features make this account from AMP one of the best types of accounts that you can use. This account will allow you to save money and get all sorts of different transactions covered. You can use this to handle any expense that you might have without having to worry about incredibly high charges or strict limits on your transactions. Be sure to consider the First Account when finding something you can use.

One can start by clearing out all debt and loans. Almost every household has one. It is not a matter of avoiding it because it just cannot be avoided. It is all about clearing it, in the soonest time possible. If one has a lot of credit card debt with a lot of different card companies, one way around it is to consolidate them. It is clearly more efficient and the interest rate will be so much better. Although the job will only be half done as soon as it is cleared, one must practice restraint since temptation will be around again. Control will play a huge part in saving for the future. Spending only whatever one has wisely is a must.

To criticize one’s self has its benefits, otherwise known as constructive criticism. Accepting one’s failure hurts but is essential in the process of being financially successful. We would all want to believe every strategy we use works but the truth of the matter is they do not. Learning from those errors will help avoid making further mistakes. It will paint an alternative, more fruitful direction.

According to a Stanford University study, thinking gray must be the most unusual way to save. Their studies report that when young adults see an image of themselves, how they will look in 40 or so years time, they would save more. Specifically two times more than those who did not see them. Young people who would want to save need to envision themselves in the future. Taking a look at senior family members and loved ones will help one envision how they would be in their 60s, or 80s. It will act as a push to grab a retirement savings plan. No one would want to picture themselves old and nowhere to go but home; white sands and a beautiful beach will look so much better.

Advice is good but only up to a certain point. Financial advice is much more critical. As much as a ton of advice will come toward one’s way, common sense is just as important. Advice for one may not suit everyone else. Therefore, carefully evaluate if the advice will work in just the right way. Otherwise, move on to the next one. If at first it feels like it works then by all means proceed. One may be offered systems that can be used but no one ever said a particular strategy should be followed. Develop a customized strategy, even if it means mixing up all the tips and pointers on finance. Remember, the objective is to save more to get rid of or avoid debt and head towards a fulfilling, more comfortable financial future.

From an interview with iTWire, the managing director of PayPal Australia, Frerk-Malte was quoted saying: “The perks of having a mobile make available a win-win chance for everybody. The customers have the capabilities to formulate smarter and more convenient purchasing choices, whilst sellers have the chance to take benefit of the phones’ features to intensely connect with customers and steer increase in profits.”

Setting up the trend. Owning a smartphone in Australia is a new trend that has emerged. Studies show that out of 30,000 smartphone owners across a wide array of countries, 80% of Australians who own a smartphone is said to be a newcomer to the technology. One in every three respondents acquired their phones only within the last half of the year.  

Google said the numbers indicate that Australians went from lagging as smartphone users to leading the global smartphone revolution in just over a year.

When it comes to mobile banking, Australians are said to have a 65% more tendency to conduct bank transactions via their smartphones compared to the British and 14% more compared to the Americans.

Colin Manners, an executive of a US-based private investment fund company, said that his iPhone has transformed the process in which he conducts his business. He says he had gained better access to their company’s portfolio, their different accounts, the world market and news all around the globe.  Furthermore, Manners is amazed at the innovation which allows him to instantly relocate funds between different bank accounts anywhere around the globe.

Prospering in business.  Local businesses are the ones who benefit the most from e-commerce transactions through mobile phones according to a study conducted by Google.

People do local searches frequently via their smartphones which enable businesses to be more accessible. The most popular purchases come from entertainment commodities to clothing, cosmetics and other technological gadgets and usually ends with shopping, all via their smartphones.

Myer, one of the nation’s biggest department stores, has an application that fits well with the iPhone. It permits customers to locate the nearest stores, find out the newest catalogues, browse for presents, and receive mobile-only discount recommendations.  

A growing inclination of online purchasing was duly noted by the Australian Retailers Association (ARA). The presences of small businesses on Facebook, with their snapshots of new clothing and footwear, have enticed purchasers to visit the brick-and-mortar stores.   

A growth in the number of businesses is likely to take on mobile-compatible services to improve their positions for the different shopping seasons such as the holidays. Consumers will begin to ask the question whether there is an application for the said business.

Enter Clint Townsend, a 25-year-old entrepreneur from Brooklyn who is building a network of ATMs that dispense cash for free. The only catch is that customers must be willing to watch some advertising while their money is dispensed.

Townsend launched the first of his free ATMs in November 2011 picking a live music venue The Knitting Factory for the location. The first client to advertise on the machine was Domino Brooklyn, an entertainment app for Brooklyn residents.

The ATM advertisements last no longer than it takes for the banks to process your transaction, says Townsend. Each machine displays five different advertisements, in addition to an advertisement for the business hosting the ATM itself.

There’s just one drawback: Townsend can’t do anything about the fee your own bank might charge you for using an out-of-network ATM. “We can’t control what your bank does,” he says.

Nevertheless, the idea has a “Why didn’t I think of that?” feel to it. Most banks, after all, already use their own ATM screens to pitch mortgages and home loans while you wait for your withdrawals.

Townsend’s company FANYC currently charges $60 per month, per advertiser, per location. Advertisers can also buy a vinyl wrap that covers the machine itself. The Knitting Factory machine is used about 100 times per week, Townsend says.

The concept isn’t new. It just has not caught on in the US.  During the 2006 World Cup, ATM users on High streets in England were treated to public service announcements that touted responsible drinking.  The advertisements, displayed during every transaction and printed on receipts, were sponsored by the Leicestershire, England police department.

Throughout England, ATMs have become a valuable source of mass communication for retailers and regional governments, and an additional revenue source for financial institutions.

The question is will third-party ATM advertising find mainstream acceptance in Australia?

One thing leading the third-party ATM-advertising charge in the United Kingdom is the number of financial institutions in the region that own ATMs. The U.K’s approximately 50,000 ATMs are owned by a small number of operators, mainly financial institutions.

In contrast only 43% of ATMs in Australia are owned by banks. But still not as diluted as compared to the estimated 20,000 U.S. credit unions and community banks that own an estimated 40 percent of the country’s nearly 450,000 ATMs.

The numbers of financial institutions that own ATMs in the U.K. make it easy for advertisers to reach a national audience because one financial institution could have ATMs across the region. While, in the U.S., financial institution owned ATMs are more regionalized, thus U.S. banks advertisements are limited to direct-marketing campaigns.

A change in technology could sway Australian banks to consider third-party ATM-advertising as upgrading to Windows-based ATMs can lead to better handling of advanced advertising functions.

After all, studies have shown that the consumer is more receptive to advertising at point of sale, and ATMs are no exception.  At point of sale it is possible to advertise a business or service on some outdoor machines, an opportunity that is ATM specific.

The end of ATM fees can be real once financial institutions and advertisers understand that the advertising opportunity is endless.

One company that specializes in ATM advertising, atmAd identified four impact areas for advertising:

Impact 1 – Attract

A high impact 10 second loop, which plays video, animation or stills and is broadcast between transactions ensuring that advertiser’s message is visible as consumers approach the ATM and insert their card.

Impact 2 – In transaction

A five-second loop that plays video, animation or stills as consumers concentrates on the delivery of their cash.  This loop plays a number of times, thus the perfect opportunity to deliver the advertiser’s core message.

Impact 3 – Thank You

This screen is a static message shown at the end of every transaction, as the consumer takes their cash and card.  Advertisers use this screen to reinforce their message or call to action, before the consumer takes their advice slip.

Optimise campaign longevity by branding the form of every ATM receipt.  atmAd dynamically prints each receipt with the advertiser’s message: a call to action, contact details or even a bar code voucher; the perfect take-home reminder for an ad campaign.

Australian banks, independent ATM operators and advertisers would be wise to take advantage of the technology as Townsend puts it: “The people want this and the people need this.”

Some would invest their savings in the share market but it has been volatile for some time now and even when a lot are convincing would-be investors that now is the right time to throw in their money in stocks, investors still see this as a turn-off. Certainty and stability are major factors that investors look for.

Those who fear the share market often resort to the highest earning investment amongst the safest — term deposits. Nonetheless, investors and savers should realise that these two are not the only ways that one can maximise the potential of their money.

For instance, paying down debts. Debts eat up a big chunk of one’s finances especially with soaring interest rates. Juxtapose the interest rates of a savings account and an unpaid credit card bill or mortgage. Numbers will show that it evens out or in some mortgage cases, the interest rates are higher. This being so, paying debts is the reasonable choice. Besides, repaying mortgages sooner not only allows savings on interests but also avoids interests on possible arrears.

Granting debts are paid or well-managed, financial advisers have several investment options for their clients. Options include straightforward interest-bearing cash management account, buying gold or government bonds, hybrids, and term deposits. These choices offer different returns and will, therefore, suit different types of investors.

A Quick Guide:

1. Interest-Bearing Cash Management Account - is designed as a short-term facility which gives the client instant access to their money. Naturally, with its functionality, this type of account pays lower interest rates. If an investor intends to put their money in the market for a longer period of time, then this is not the best option for them.
2. Government Bonds - are bought directly from the Reserve Bank of Australia (RBA) and some state governments in retail-sized lots. There is no market trading on this and its yields are quoted. The market is $300 billion in size and is highly liquid. This is the safest choice for cautious wealthy people who prefer low-risk investments over banks.
3. Corporate Bonds - is a $200 billion market traded between major financial institutions wherein small investors have no stake in new bonds. Nonetheless, financial institutions still offer an array of packages to retail clients.
4. Hybrids - is a more complicated investment market. It offers a higher yield over bank accounts and banks but its volatility can be scary for those who are not familiar with this type of investment. Check out the listing of the hybrid market at marcustoday.com.au.
5. Term Deposits - is the most logical low-risk investment. It is easy to understand and uncomplicated. Its returns are higher than cash management accounts but the investments have longer lock-in period. Nevertheless to maximise the earnings of the term deposit, it is important not to break the lock-in period or any clause which might result in penalties.

Others may also think of gold as an investment but fact of the matter is that it has no returns and very hard to liquidate. It is not an alternative to cash and is simply over-publicised. So with all these options, weigh in all the benefits and add on the benefit of waking up from a good night’s sleep with no qualms over risky financial investments.

You might think it’s superficial but the simple “Instant Latte Factor” money saving strategy clears the cobwebs. Created and popularized by David Bach, the instant latte factor calculator can help you see how much you could have or save if you cut down on those small expenses, whether it is your habitual store-bought early morning cup of coffee or expenses you didn’t really think might pile up like ATM fees.

To have a clearer picture on how the calculator works, here is a sample: First, you need to choose from a category (ATM fees, lattes, fast food) then choose an amount you usually spend on the chosen category. Say, let us start with an ATM fee of $2. The amount of 2 dollars at this point might seem irrelevant to you and your savings but wait until the Instant Latte Factor calculates how much you can actually save in the coming years.

The two dollar you usually spend on ATM fees, in a year’s time (with the usual 3 percent interest) will amount to $751.90, $1228.1 in 10 years, $8076.98 in 40 years and so on. And this can happen simply by switching to a bank that reimburses ATM fees and then investing the reimbursed amount to a savings account.

Same is true when it comes to other expenses like fast food. If you will just stop for a while and calculate how much of your pay goes to these unhealthy food chains, you might be surprised. Home-cooked meals can be time-consuming but at least you are sure that what you are eating will not cause you future health woes but instead add a sum to your savings.

Other stuff you can think of cutting back are expensive cleaning agents and disinfectants that claim to give you dramatic results when in fact a simple baking soda + vinegar solution can actually do the same trick. Aside from that, let us all be reminded that post-paid cellular phone subscriptions can be a waste of money especially if we are not able to use all credits left but are still obliged to pay for it.

Let’s not forget though that tackling your biggest expenses first will give you the most progress on financial and saving goals. There is also a need to take the time to evaluate which things/expenses you can actually apply the latte factor method. This is to make sure that you are not cutting back on the small things that really matter to your everyday happiness but rather on the things that you can actually live without. Seeing in cold hard numbers how little changes like skipping the usual  store-bought cup of latte can really add up is enough to motivate you to cut out small stuff that, after some pondering, is really a waste of money.

An offset account is a type of a savings account where the principal investor or depositor forgoes direct interest earnings from the offset account itself by means of having the interest earned offset against principal of the loan account. Through this, the offset savings account is able to reduce the loan interest when calculations are made.

Offset accounts are also highly recommended to borrowers with big savings and want to access their accounts when their situation calls for it. Aside from that, an offset account can also be a valuable tool for business people who are in the constant need to deposit and withdraw large funds at different times for business purposes.

The reason why offset accounts are linked to business people and big-time savers are due to the difference in percentages of interest rates between an offset account and a normal savings account.

It is a sad fact that although offset accounts can be one of the most useful investment tools an investor can ever invest upon, only a handful really understands them. Take for instance the case of investor A who deposited his money in a normal savings account; the amount he deposited surely will earn a maximum of 2% per annum but he will also lose nearly half of the total amount in tax. Whereas, if investor A opted to deposit his money in an offset account, the big difference is that, the notional interest credited to his deposited money is in leverage as that charged on his housing loan.

The perks of investing in an offset account do not stop there though, instead of it being credited to your account and leaving you drowning in tax debt, it will, instead take off the interest in your non deductible home loan. In totality, the funds in your offset account earn you the equivalent of the loan rate (more or less 7%) after tax. That means having 12% before tax on an interest bearing deposit.

Another way to maximise the benefits of an offset account is to invest in it if you intend to change residences and retain your old one. To further understand, think about two neighbours who both started with a housing loan of $300,000 a few years back. Neighbour A used all his resources with the goal of reducing the loan while Neighbour B decided to put all his savings to an offset account. As of present time, Neighbour A only owes $80,000 on his loan while Neighbour B has a debt of $290,000 with $210,000 in his offset account. Both decided to move to another residence but kept their old homes and rented it out. Neighbour B can simply withdraw his $210,000 from his offset account for tax purposes and deposit it to his new home leaving a deductible debt of $290,000 on the existing one. On the other hand, Neighbour A will end up paying for tax on rents from his original property aside from a huge non-deductible debt he has incurred for his new home.

Citibank revived its Citibank Plus Transaction Account with additional fee-free features. It scrapped out the service fees of cheque issuance, cheque dishonour, extra statement fees, overseas ATM withdrawals, fund transfers and point-of-sale (POS) transactions. Citibank also offers free access to a system of 3000 ATMs nationwide. “We have removed absolutely everything. We claim to have the only fully free account in Australia,” according to Citibank’s Head of Retail Banking, David Mouille.

In addition to these savings, Citibank treats its transaction account clients with a dining partnership program that was initially designed for its credit card business. Account holders are entitled to a free bottle of wine when they dine at any of the 300 participating restaurants.

Similar programs have been launched by rival banks. HSBC introduced in June its Day to Day Account with waived account-keeping fees and a $10 monthly fee rebate for customers who deposit at least $2000 into their account every month. At the same time, ING Direct gives back $0.50 into an Orange Everyday Account customer every time the account holder takes out more than $200 in cash during a debit transaction.

While other banks pointed out that there is no need to scrap out or decrease monthly account fees because account holders were only particular about exception fees (overdrawn account, overlimit credit card spending, late payment and other surcharges), the National Australia Bank (NAB) announced in 2009 that it will ditch all its transaction banking fees and went further with its exception fees. John Salamito, Executive General Manager of NAB’s Consumer Product Solutions, explained that NAB knew that customers loathed monthly fees as much as exception fees.  ” We could see a competitive advantage in getting rid of all fees on our transaction account,” he said.

Brett Morgan, ING Direct’s Executive Director of Savings, concurs and said ”People do care about the monthly fee.” Citibank must have recognised this concern. Thus, removing its fees for overseas transactions which includes ATM withdrawals or POS terminal transactions. ”A significan’t part of Citibank’s customers come from abroad and still have family outside Australia. They travel a lot,” David Mouille says. ”The globally oriented people in the community are growing all the time,” he added.

Mouille explained Citibank’s agreement with Visa regarding transaction processes. Visa handles the transaction processes and forwards the charges to the bank instead of passing it to the customers.

Despite the stiff competition between banks, there are still banks charging fees such as account-keeping charges. These banks include Commonwealth Bank, Westpac and ANZ. Some fees these banks charge are $5 a month for ANZ’s Access Advantage Account, $6 a month for Commonwealth’s Complete Access and $4 for Commonwealth’s Smart Access, $5 a month for Westpac’s Choice Account, and $10 monthly fee for NAB Gold Banking. Nevertheless, these banks have also set certain conditions to waive its fees such as required monthly minimum deposits or age benefits for students and retirees.

Could this aggressiveness in gaining a chunk of the debit card market be the cause for a teenager to use debit card banking systems to run a $200,000 banking scam?

The boy, who cannot be named for legal reasons, opened bank accounts with the Commonwealth Bank, ANZ, Westpac and NAB when he was 14 years old.

He started his scam in 2007 when he made more than $6000 a day on eBay by selling products that did not exist.

When his mother stumbled on the scam, she says she repeatedly warned the banks he was a minor sourcing funds illegally. She alleges the banks ignored her or refused to discuss the matter for privacy reasons.

When the banks did not listen to her, she approached the police. Police eventually pounced on the boy in school after many of the frauds were linked to an IP address attached to a classroom computer.

However, the teenager had already devised another bank-related scam.

His mother said: ”He began placing small amounts of cash on his many debit cards, followed by instant large withdrawals. The flaw in the system is that you can go $1500 overdrawn before they shut down the account. He didn’t care. The moment one got closed, it was his cue to open another. It became an addiction.”

The boy has been in and out of juvenile and adult detention centres for the charge of obtaining money by deception.  The boy is now 19 and has just left Silverwater Correctional Facility.

Westpac and the Commonwealth Bank have so far refused to comment on their security policy.

While, NAB and ANZ spokesmen say their policies were conservative and appropriate, neither would elaborate how exactly their policies stopped anyone under the age of 18 from applying for a debit card without a guardian.

A search through online application forms for the four major banks shows that NAB, ANZ and Westpac stipulate that customers have to be 18 to apply for a Visa or Mastercard debit card.  While, the Commonwealth Bank states anyone over 16 can apply for a debit Mastercard.

But the boy’s mother insists these protections were not sufficient.

“You can just tick a box and say you are over 18,” she said. “I’m his legal guardian and he should not have had those cards at all. I told the banks and they should have closed the accounts down. There is just not enough scrutiny.”

The mother is suing the big four banks in the Supreme Court for their alleged role in the $200,000 money laundering scam. The claim is for damages, loss of income and disruption to her life, after she repeatedly warned the banks about what her son was doing and they did not act.

“I’ve had to move, I’ve had bricks thrown through my windows. People wonder what kind of a mother would put her kid in jail, but I had no choice.”

She insists she is not making excuses for her son, and she is not money hungry.

“There just needs to be more scrutiny and banks have to take responsibility.”

The mother found an ally in Barrister Charles Sweeney, QC, who contacted her and said he would represent her. An experienced banking, consumer and competition law barrister, Sweeney represented victims of the collapse of stockbroking firm Opes Prime.

The Bendigo SmartStart Super also has a life-stage default fund that is ideal for those who want to set up a super fund and sit on it until its maturity. It is designed to continuously reduce the risks and returns of investments as the investor ages. This type of fund is also best for those who want to avoid paying for insurance and commissions of a financial advisor.

Richard Morice, the Head of Funds Management at Bendigo Wealth, explains that SmartStart Super’s age-based defaults are categorised into three risk profiles connected to an investor’s age. If a member opts for this choice, savings will be consequently put into the pre-determined asset mix depending on the member’s age.

For instance, the contributions of members under 55 will be put into the growth index fund that prioritises shares and properties. At 55, the contribution will be automatically moved to a balanced index fund and at 60, it will be switched to a conservative index fund. The conservative fund will consist mostly of cash and bonds. Morice clarifies that members can also choose to be more or less engaged with their super in which case they can decide at any time to be in or out of the age-based defaults.

The SmartStart Super only costs $98 a year. This flat administration fee is the same for whatever amount will be invested. There is also a management fee for every type of investment; index funds are only at 0.39 percent to 0.46 percent a year while it costs 0.60 percent to 0.99 percent for actively managed funds. In addition to these low fees, there are no charges for contributions, withdrawals or switching between investments. Members can also seek optional financial advice for a small fixed-rate fee.

Nicole Ross, Research Analyst of SuperRatings (an independent research center on superannuation), conducted a comparison of the fee structure of SmartStart with comparable products for account balances of $5000, $50,000 and $100,000. Ross revealed that the SmartStart Super’s index choices provide a ”good” value for money for small accounts and an ”excellent” value for bigger accounts.

SuperRatings also rated the actively managed fund options as “good” and gave an “excellent” value rating for bigger balances on the defensive and conservative active option. A comparison was also made with the Total and Permanent Disability (TPD) and income-protection insurance against the industry average in terms of coverage per dollar of premiums paid which revealed a good result.  ”It is an improvement on Bendigo’s previous super products and the death and TPD insurance is looking good,” Ross said.

There are noticeable differences in value for money for both men and women of different backgrounds. For instance, the SmartStart’s death and TPD coverage provides above-average value for older members. It also provides above-average value on income protection for members in their early to mid-20s. For older members, it offers below-average value for women and only average value for men.

”SmartStart is suited to those who are cost-conscious and want something that is inexpensive, simple and transparen’t,” Morice says. ”Our ready-made diversified funds offer that with comprehensive insurance.”

Overall, SmartStart is ideal for people aged 20-50 who want to start or consolidate their super fund into one simple and low-cost fund. It is a forthright product with product disclosure statements that are very easy to understand. Although the investment choices are limited and restricted only to managed funds, this drawback reduces costs and makes the product line very competitive.

One of Australia’s largest super funds, AustralianSuper, is launching a range of term deposits as an alternative to cash options. AustralianSuper will start offering three, six and 12-month terms from the end of November 2011 with National Australia Bank and ME Bank as providers.

AustralianSuper is following a trend that has seen a number of super funds introduce or expand term-deposit offerings in their funds during the past year.

The combination of reasonable returns and a government guarantee makes term deposits extremely popular with investors since the global financial crisis. Super funds want to get in on the act and the banks are very happy to oblige.

In September of this year, ANZ put a range of term deposits on the super and non-super investment platforms of its wealth management division, OnePath.

Even much earlier, in April 2011, Commonwealth Bank launched a hybrid term deposit on Colonial’s First Choice platform. The investment matures in 2017 and has a rate that is reset as the Reserve Bank changes rates, paying 1 percentage point more than the cash rate.

The Frontrunner

Westpac should be credit with starting the trend when it started selling about 12 months ago a range of products called Retirement Deposits, which have a degree of sophistication not usually associated with term deposits.

One of the products, Coupon Select, allows investors to pick terms up to 10 years, to pick fixed or floating rates, or a combination of the two, to switch from floating rates to fixed rates and to opt for a return of capital with the interest payments.

Another product, CPI Plus, offers a fixed base rate (currently 3.5 per cent) and the annual rate of inflation on top of that. If inflation is 3 per cent, CPI Plus will pay 6.5 per cent.

Now it is AustralianSuper’s turn to get in on the act.

AustralianSuper’s term deposit offering will be available to members who use its Member Direct investment platform. In addition to the standard administration fee of $1.50 a week, members pay $180 a year for access to Member Direct.

The chief executive of the fund, Ian Silk, says: ”The key criterion for selecting NAB and ME Bank was that they could offer sustainably competitive rates, rather than just short-term introductory specials,” he says.

A Word of Caution

Members should make sure that they are comparing apples with apples when considering moving from a cash option to a term deposit.

At a glance, a term deposit rate of 5.5 per cent or more for 12 months looks like a good return when compared with the median return of 4.4 per cent for cash options in the SuperRatings survey.

However, the SuperRatings returns are quoted after tax and fees. Super funds assume that 15 per cent tax has been paid on the cash account. To compare like with like, a 5.5 per cent term-deposit rate comes down to 4.7 per cent after tax.

As for the issue of fees, the fund’s administration fee is the same, whether the member chooses cash or term deposits. Banks do not charge management fees on term deposits since their margin is built into the rate.

Hidden fees, trailing and upfront commissions that come along with investment products have been weighing down investors for years now. Categorized under financial advice, these fees can take as much as 1.5% or $15,000 each year if, for example, an investor has $1 million in the market. It does not matter whether or not an investor is getting the “financial advice” he has consciously or unconsciously paid for, he is still up to pay for $15,000 each year.

One of the reasons why these unwanted fees are able to “eat-up” on investor’s savings is the fact that financial statements from investment funds and super held administration charges which are supposed to pay for financial advice. Note though that an investor is not given a choice whether to opt for it or not as the fee is automatically deducted. On the other hand, in cases where a financial adviser opts to end their relationship with the client, trail commission then goes to the product provider.

In April 2011, Bill Shorten, Assistant Treasurer and Minister of Superannuation, announced the Federal Government’s Future of Financial Advice reforms that aim to put stop to the fee drain. The said reforms stated that starting July 1 of 2012, both product advisers and providers will be banned from charging volume-based payments and commissions across super, margin loans and managed investments (excluding insurance held within super and risk insurance products). Trailing and upfront commissions will be a burden no more, advisers will only be allowed to charge a fee for the advice they can actually provide to investors.

By next year, investors are then advised to find time and consider the following:

1. The actual amount being paid to trailing commission for investment and super product which includes margin loans
2. After much deliberation, investors should also aim not only to reduce but possibly eliminate these so-called unwanted fees from their accounts
3. Check for any hidden fees in their mortgage, car and home insurance. Although the ban excludes insurance policies, it does not mean that investors should still be paying extra charges especially if they have already invested in a rebate service.
4. Maximize the perks of having a financial adviser. If the relationship between investor and financial adviser is successful, there is nothing wrong with keeping the said relationship and benefiting from it. Keep in mind though that financial advice will still incur a fee.
5. If an investor feels that he/she does not need a financial adviser, then opting for a rebate service proves to be a smart move. Rebate services like Dixon Advisory, iRefund, Infocus and YouMoneyBack allows investors to nominate them as recipient of the commission and in exhcange, the rebate goes to them. But investors should remember that the services of these organisations are not for free, they also need funds to keep them going and they usually charge a fixed percentage of the commission.

For investors who are thinking of switching investment products, it is best to wait until July next year when all the regulatory changes can be applied.

First Home Saver Accounts were first introduced in 2008 but were unpopular with clients who saw them as very inflexible.

Recent changes made by the government have made the product more attractive to first-home buyers.  Current statistics from the Australian Prudential Regulation Authority show as much as 31,000 accounts were opened by June 2011 with savings up to $230 million, an increase of 56 per cent on March and up 95 per cent from September last year.

Annette Sampson, of the Sydney Morning Herald, identifies two main benefits of the First Home Saver Accounts, which are special accounts open only to people saving for their first home.

First, any interest earned on the account is only taxed at 15 per cent, so if the account earns more than $37,000 the first-home buyer saves at least half the tax otherwise paid on a normal savings account.

Second, the government adds 17 per cent of any deposits made up to $5500 a year. So if first-home buyer deposits the full $5500 in one financial year, he receives another $935 from the government. Both amounts are indexed.

Sampson also expounds on the conditions for the first-home buyer to meet in order to earn these benefits.

First, the first-home buyer needs to save at least $1000 each year for four financial years before he can get his money out.

These four years need not be consecutive and the first-home buyer could get his money back after two years and two days if he opened the account on June 30 and closed it on July 1.

Second, once the account balance hits $85,000 (indexed) the first-home buyer cannot make any more contributions, but interest will still be credited to his account.

Third, as the name suggests, the money has to be used for one’s first home. The first-home buyer can’t change his mind and withdraw it to travel or buy a new car.

If one does not buy a home, the savings will be added to his super where it will remain until he retires.

Fourth, partial withdrawals are also not allowed; the first-home buyer must withdraw the full amount and close his account.

Fifth, the house must be a principal place of residence, not an investment property. To meet the requirements one has to live in it continuously for at least six months within a year of settlement on the property or completion of construction.

On the other hand, if the first-home buyer already owns an investment property he can still open a First Home Saver Account, as long as you he never lived in the investment property.

Sampson likewise answers a few details on the finer points of the First Home Saver Account.

One of the sticking points with the original scheme was what happens if the first-home buyer wants to buy the house before the four years are up.

“The government now allows you to have your account balance paid into your mortgage when the four years are up rather than having to wait to buy or having the money transferred into super. But you’ll still have to find the money from elsewhere to fund your deposit. You also have to notify your account provider within 30 days of buying the house,” she explains.

As for a couple or partners buying a house, assuming neither have owned a house before, both are eligible to open an account.

Sampson explains “That effectively doubles the value of the potential government contributions. If you buy a house together, it also means that when one of you has met the four-year savings mark, you can both take your money out to fund the purchase.”

There is good news also for young adults whose paren’ts want to contribute to the account.

“There is no requirement that the savings have to be all your own. Contributions from other people are also eligible for the government’s 17 per cent, up to the total $5500 limit,” she clarifies.

For more information on the First Home Saver Account, Sampson encourages people to contact the Australian Tax Office.

The threat of another global financial crisis and a double-dip recession in the US and Europe have gravely affected superannuation account balances. Shorten explained that workers due to retire soon were prone to a 35 percent loss in the value of shares since 2008. The sad fact that a lot of soon-to-be retirees have not saved enough money to live a comfortable retirement makes the situation even worse.

“Thank goodness we have compulsory superannuation,” Shorten told an interview. He is even supporting the move on increasing the compulsory contribution from 9 percent to 12 percent. “Nine percent is not adequate for people to retire on in the future,” he added.

In South Australia, the government also supports the increase in superannuation contributions of almost 500,000 South Australians. According to the latest data released by the Treasury Department, there are 480,900 Aussies in SA, and around 8 million Aussies across the nation who receive less than 12 percent in super contributions from their employer. The Government has promised to raise the employer superannuation guarantee from 9 percent to 12 percent to take effect by 2019 to 2020.

This proposal comes as an incidental program as the very controversial mining tax is set to be discussed in the Parliament. Shorten anticipates a boost in super savings with the raise in contribution guarantee, which at the moment amounts to more than $1.4 trillion.

“Given life expectancy is increasing and retirement is becoming more an experience of decades rather than a few years, 9 percent superannuation is simply not enough,” he said. “This is especially the case for women, who have child-raising breaks in their career and have a longer life expectancy than men,” he added.

Shorten also explained that it is about time to increase the superannuation guarantee since it has been 20 years since it was announced by the Hawke Government. At the same time, conditions and parameters on which the 9 percent was based on have changed as well. The Treasury Department said that the raise to 12 percent would save the government an extra $2.6 billion on pensions by 2030 to 2031.

The Association of Superannuation Funds of Australia (ASFA) commissioned an independent organisation and reported that an increase in the employer contribution would actually boost the economy. The forecast said it will lead to an increase of 0.33 percent in real gross domestic product by 2025. However, the Opposition remarked that this increase will eventually be paid by the employees.

Nonetheless, the Government is looking into other options to increase the income of future retirees upon retirement. The Government has delegated an Advisory Panel on the Economic potential of Senior Australians (EPSA) to look into possible working opportunities for older Australians. The panel was organised to search for ways of keeping senior Australians working.

As the Government starts to prepare every Australian for a more comfortable retirement, it is about time for Aussies to see the value of individual savings as an imperative solution for a truly comfortable retirement.

Who wants to start the new year with more debt than they had the year before?

The popular Teachers Credit Union has come up with a novel way of saving for the holidays, and an even cleverer way of ensuring we don’t spend the money we’ve put away before the decorations go up. Introducing the Teachers Credit Union Christmas Savings Account.

What Do You Need To Know?

No minimum balance- Unlike many short term savings plans of this type there is no minimum opening balance requirement. If you only have a dollar in your pocket but want to get your savings plan up and running then no problem. $1 gets your account open!

No monthly fees- The Teachers Credit Union Christmas Savings Account ensures you receive every cent you put away by doing away with any account keeping charges. This account is completely free to open and maintain.

Internet banking facilities- In the old days of saving when you had to  visit a branch to deposit your fund, it was quite easy to spend the money you were going to save before you had the chance to get to your nearest branch.

The Teachers Union gives you full Internet banking capabilities so you can transfer money directly from your bank account the moment you get paid. That way the temptation to spend money meant for savings is removed!

Interest rate of 1.37% per annum (Currently)- Not only does this account ensure you get every dollar you put away back, but it also pays you a little interest on top. You won’t be able to retire on the additional money, but at this time of year every little helps!

Set up direct payments- If you want you can arrange for a set amount of money to be transferred into this account from your wages each week/month. That way a regular amount will be going towards your Christmas fund, and with the money being taken automatically you won’t have to lift a finger.

Christmas Access Only!

It’s all well and good setting up a Christmas savings fund, but it’s normally far to easy to access the money whenever you need it, and that generally means when December comes there won’t be half the money you expect left in the account.

The Teachers Union Christmas Savings Account has a very sensible and innovative access policy for this product. Savers can only access their money between the 1st November and the 31st January each year. Right when you’ll need to start stocking up on those festive goodies!

It really does make it far easier to budget and save for the holidays, without the temptation of digging into your extra funds. With the security of the popular credit union behind you, you’ll also sleep easy knowing your money is in a safe place!

There’s no time like the present, so make sure you’re on Santa’s good list next year and start your Christmas savings plan today.

In a dramatic move to help more first time buyers onto the market, the government has helped create a savings account that they will contribute to in the form of additional funds, and tax relief.

If you haven’t heard about the Teachers Credit Union First Home Saver Account then you need to pin back your ears for a while!

An Additional 17%

One of the biggest problems new would-be home owners are having is saving for a deposit. With very few high loan-to-value home loans available it’s now virtually impossible to get a mortgage without at least 10% deposit (and often more) put away.

In order to help people build up a deposit quicker the government will add 17% onto whatever money you save yourself each year. The amount they’ll give you is capped at $935 per annum but even so, the additional funds can shave a great deal of time off your deposit gathering period.

The other major benefit of this particular home savers account is that the provider The Teachers Credit Union will automatically pay 15% tax on your interest each year to the tax office. This means there’s no need to declare any profits earned in interest from this account on your tax return.

Another headache you won’t have to worry about!

A Good Rate Of Return

At time of print the interest rate on this First Home Saver account was 4.46% per annum because of the way the Teachers Union pay tax on your behalf. Certainly not a bad rate of return, especially during a time when interest rates are far from inspiring.

Save On Fees

The last thing you want to see is your hard earned savings being swallowed up in fees, and with The Teachers Credit Union this won’t happen because the account is totally fee free. There are no account keeping fees to worry about, and the online banking facilities are free to use as well.

You’ll be pleased to hear that another area you’ll make savings with this product is deposits. You can make as many deposits as you wish with no charges, EVER!

In order to access your money you need to have put away at least $1000 a year in four separate years, or be about to buy a property. It means your money is accessible but only for the right reason. This money is to help you buy a house, not a new car or summer wardrobe after all!

With a nice rate of interest, and an extra 17% added to your savings by the government, those fighting to get their foot on the property ladder would be hard pushed to find a better savings solution anywhere, home or abroad.

The award-winning Teachers Credit Union Everyday account lets you access your money whenever you need it. You’re not limited to a set number of transactions and you don’t have the worry of exorbitant bank fees eating away at your cash.

When it comes to finding the right transaction account to suit your financial needs, you obviously want the best. This is why opting only for an account that boasts a Canstar Cannex 5-Star rating is always a good idea. Any account with such a high rating is sure to offer outstanding value.

However, the Teachers Credit Union Everyday Account rates this highly across three categories.

Enjoy Unlimited Transactions

The Teachers Credit Union Everyday transaction account allows you to enjoy an unlimited number of transactions on your account. You won’t be penalised for withdrawing your own cash more than a couple of times, and you won’t receive steep fees for going over your allocation.

Instead, you’re encouraged to withdraw your cash, pay for purchases, or deposit money whenever you want. In fact, you can do these things an unlimited number of times through any month without incurring any penalties.

Accessing Your Account

The Teachers Credit Union makes it very easy for you to access your account. You can make withdrawals using your rediCARD or your Visa debit card from any NAB ATM across the country. You’re also able to use the rediATM network to withdraw money when you want it.

Use either of your cards to pay for EFTPOS purchases, or use your Visa debit card to pay for online purchases using cash from your Everyday account.

You’re also able to log into the secure online banking website at any time and pay bills using BPAY. You can pay other people, too, using the electronic funds transfer option online. The Internet banking facility also lets you view your account balances and your statements whenever you want.

If you have regular payments to make, such as a personal loan or a mortgage or even monthly insurance premiums, you can easily set up direct debit payments to come directly out of your account. Your employer can also deposit your salary directly into your account.

Link a cheque book to your Everyday Account, if you wish, or deposit cheques into your account over the counter at any Teachers Credit Union Branch, or any NAB branch.

You can use as many of these transactions each month as you want. You’ll still only pay the same low monthly fee.

Those of you who happen to be over 50 prepare to be amazed. Your age is actually an advantage to you at The Teachers credit Union. The more mature members of the union can apply for the Edvest Cash Management Account where the interest rates are much better.

Fee Free

The other major attraction of these cash management accounts is the fee structure. There are no fees whatsoever!

$0 account keeping fees, no fees for using Internet and phone banking, and no fees for making withdrawals. No matter how many you make in a month.

Access to your money is easy with The Teachers Union Cash Management Accounts too. You don’t need to give any notice when you want to make a withdrawal, and you have a number of ways you can get to your funds.

You can go online and make deposits and transfers using Internet banking, you could also use the telephone banking facilities available to switch money into one of your other accounts, or if you prefer to do things in person you could drop into the Homebush or Rooty Hill offices and have the cash in your hands within minutes.

If you’re a regular saver and looking to put away more than $5000 then a cash management account from The Teachers Credit Union is a very sensible choice. Remember if you’re over 50 make sure you apply for the Edvest account instead so you can benefit from the higher interest rates, and lower savings threshold.

Whatever it is the world throws at Australians, they can manage, they can handle it. According to the Australian Bureau of Statistics (ABS), with 11.5 percent of income being stockpiled by the average household, Australians are able to save more than ever before. It is the highest figure recorded in the past quarter of a century, which is good because the ideal percentage of income to be put aside for emergency cases is 10 percent.

Australia’s estimated growth domestic product (GDP) this year is 24 percent, which puts them under the low debt category unlike Greece and the United States, with 152 percent and 100 percent respectively. These were estimates done by the International Monetary Fund (IMF). The budget deficit of Greece and US is set to dip down to -2.8 percent, from -5.9 percent. Britain and Japan are tied at -9 percent, and the United States at -10 percent. Clearly, the Australian Government has the luxury to spend to avert another crisis.

One way of increasing one’s cash savings is to save on other known fixed costs. Things like making longest distance phone calls using Voice Over Internet Protocol (VoIP), meaning from one computer to another, will cost one almost nothing. A home phone will not be necessary with all sorts of mobile deals made available for a small monthly fee. Review the post-paid service you are subscribed to and compare with current deals offered by the utility company.

Safeguarding one’s future can also be done by re-examining investments. They should be spread out both across assets and within. Protecting one’s wealth means spreading stocks through a range of sectors, even countries. It is better to be wise than sorry.

Switching to better deals when it comes to insurances will also help save. Though expensive, income-protection insurance is tax deductible. Acquiring an adequate life insurance will also help, due to the fact that it will pay early to assist the benefactors when the beneficiary is faced with a terminal illness.

A big chunk can also be cut off from one’s mortgage. Choosing the best package or deal that offers the lowest interest rate will save home owners a lot of money. Home owners can also save money by speeding up their repayments. Although early or over repayments are permitted by most home loan lenders, early or over repayments do not give the home owners a leeway, unless specified in the lending agreement, should they run into financial trouble later on.

Interest rates on home loan repayments can be tricky. Some think that a 1 percentage point is such a little amount that they could not care less but little do they know that it can definitely make a big difference. For instance, a 1 percentage point on a $300,000 loan will approximately save a home owner $214 a month and around $64,000 over the next 25 years. This will definitely save you a lot of cash.

Investors whose optimism are currently weighed down by concerns over the European debt crisis, the US debt levels, carbon tax, a patchy economy and volatile shares market find comfort in the stability of term deposits.

According to research and ratings company Canstar Cannex, in the 12 month leading to May, money in term deposits has grown by $30 billion. Over the past two years, term deposits have grown more than $50 billion.

These figures may reflect investor sentiment wherein after the global financial crisis of 2008 diversifying into a guaranteed investment with a fixed rate of return is a sound strategy.

Term deposit rates of more than 6% a year are available, and deposits are guaranteed by the government up to $1 million.

A growing number of investment platforms now offer term deposits as a superannuation option, many investors have found security combined with a known rate of return an option too attractive to pass up.

But like all other investments, reading the fine print helps ensure one gets the best for his money.

Canstar Cannex says Australian banks using attractive lead-in term deposit rates to lure more cash into banks may not apply it again when it is time to roll over into a new term deposit.

A bank may give a special rate of 6% for six months. Most investors however, will simply roll into another six-month term deposit at end of term. But in six months’ time, the bank might no longer be offering a “special” on six-month deposits.

It may be offering just 4% or 5% on six-month deposits and moved its “specials” to three-month or nine-month terms. Prudence says always ask to be rolled over for a different term so as not to miss out on the best rate.

This practice, widely used by financial institutions, is called dual pricing and, while frowned on by the Australian Securities and Investments Commission, is not regulated.

Banks, as a business, want to hold onto to an investor’s money as long as they could.  A normal practice of banks is requiring investors to open an associated savings account to access their term deposits. Another practice is charge an interest “penalty” for early withdrawals, meaning you can lose much of your interest, while some don’t allow early withdrawals at all.

All these add to hassle when switching to other banks and accessing money that’s locked in.  But these are small deterrents when one knows how to take advantage of term deposits.  Putting a little extra time can add to ones savings.

Suave term deposit investors practice “laddering” to minimise the risk from fixed interest and take advantage of banks. “Laddering” is having several different term deposits at any one time, with different terms and therefore different interest rates.

If an investor has $60,000 to invest and would not need it for three years, the investor could “ladder” the investment by putting $20,000 in a 12-month term deposit at 6.4%; $20,000 in a 24-month deposit at 6.7%; and the last $20,000 away for three years at 6.75%.

If interest rates go higher at the end of the first year term deposit the investor can reinvest the $20,000 at a higher rate. Should rates fall in the next 12 months, $40,000 of the total investment is locked away at higher rates, giving the investor protection.

It may not be the best investment instrument but with term deposits investors know exactly what they are get, and a savvy investor should learn to diversify his portfolio and invest in term deposits.

These banks admitted through an official press release that free and low cost cheques with very few users will only make the process too expensive for banking institutions to cover.

According to an ANZ representative, “Today, for a payer, cheques are an inexpensive, if not free, payment method. The majority of costs are absorbed by the payee’s financial institution. This model will become unsustainable at some point as cheque volumes decrease”.

ANZ and CBA, Australia’s fourth and second largest bank respectively, computed that cheque based non-cash payments dropped by 35% since 1995. The drop puts cheque production and issuance as “unsustainable”, particularly with the sudden rise of electronic based banking transactions.

The introduction of internet banking is most likely the best bet in mapping the cause for cheque usage’s sudden decline over the past decade. ANZ and CBA urge cheque- issued consumers to continue using cheques as a preferred mode of payment because it has advantages incommensurate to the benefits offered by electronic banking.

Since its first issuance in banking history, cheques remain the most secure of all non-cash transactions. Unlike electronic based transactions, cheques are free from the hassles of faulty websites, system failure and hacking. As a result, legal disputes over cheque-based transactions are resolved easier when compared to disputes over electronic transactions.

Another cheque security feature is its dependency on the signatory of the cheque. One chequebook is exclusively given to one person or one institution making the cheque unacceptable if the signatory is tampered or changed. The signature requirement also empowers consumers with full control over their accounts, not a cent can be withdrawn without the proper signature. With the signatory and the amount specified, banking institutions can guarantee their clients that their accounts will be deducted according to their specified amounts, nothing more, nothing less.

ANZ and CBA mentioned that these advantages might as well be the underlying reasons for the continuous cheque usage of some Aussie communities. These communities, regardless of the convenience of electronic banking, show none to negligibly low decreases in cheque issuance.

Believing that the culture and practice of using cheques can still be promoted and practiced, ANZ pledged that the adjustments set for implementation will be carefully studied through the perspectives of its users. ANZ and CBA both submitted separate proposals to the Reserve Bank of Australia regarding the planned changes.

ANZ assures that its proposal focuses on, ”Introducing a pricing model that would better reflect the distribution of costs associated with cheques, while providing better signals to users, would be a logical move”. CBA also assures its cheque consumers that the bank knows that it would be impossible for clients to shoulder the full AUD 4.30 cost of issuing cheques. Both banks assure that the realignments will balance consumer needs with the total costs of issuing cheques.

The proposals are still being reviewed and yet to be decided by RBA.  

Learning from others is also an option, others who are way ahead in financial expertise. Learn simple things like what can be done and what should not be done. Now, that does not mean that one has to tag along. One way of surviving out there is to learn to say “No” and move on.

Starting a business is no joke. Change is endless in that aspect because nothing is certain. Business owners have to be the one to adjust to everything around them – their business partners, customers and even their suppliers. Business owners have to maintain a certain financial status. If they are not careful, they may not have a financial status left to fix.

Investing is another fragile piece of glass one can handle. Sustainability is the key word. For as long as one can handle it and manage, they should do just fine.

The choice of product one consumes also matters. Products tested on animals, pollute the environment and manufactured using child labor should be avoided because they are not sustainable from the financial, environmental and social perspectives.

Loans or debts are unavoidable, but picking the right kind of debt is also critical. Car loans, credit cards and personal loans should be avoided as much as possible. Investment debt in the form of home equity and margin lending can be considered, not because of tax deductible interests, but for concrete sustainable wealth.

Insurance is often ignored, most especially by young people, but this is where the irony lies. There is no better time to get insurance cover than when one is still financially able to pay for it. When one is still young, it is when insurance like life cover and income protection is most essential. To be financially independent by the time you retire is the Mount Everest of financial security. It may seem like you will never get there, but retirement will be knocking on your doorstep before you even know it.

The bottom-line is, take risks. It is a must in creating and solidifying one’s financial status. It may seem like it is almost impossible to achieve this but it can be done. The rewards will be clearer as time goes by, in the long run it will all work out. Do not ignore a “saving for your future” advise especially while you are young. Skip out on planning to buy a new car or going on a luxurious around the world trip for now. Instead, create a strategy and start working on your solid financial future.

Financial planners classify a future investor’s comfort zone as their “risk profile”. This is used to assess an investor’s reception on the volatility of the share market and the possible outcome of one’s investments. Even though seasoned investors might say that the shares with higher risks are the ones getting the bigger returns, some investors may still shy away from the share market. You can check your risk profile at www.debtman.com.au

Future investors should never think of the share market as gambling. Although by definition the investment in share market is somewhat similar to gambling, it is best to keep one’s investments to a minimum if monetary concerns are not flexible. Besides, starter investors should learn the ropes first before plunging into the share market. A lot of people from the X and Y generations exercise the necessary precautions but are perceived to be risk-takers as well. This is what youth brings – boldness.

Generation X and Y investors have more money to risk since retirement is quite far-fetched at this stage of their lives and this accounts for their bold moves. Nonetheless, this does not mean that they are rash nor does this mean that Baby Boomers and Retirees shy away from risk. There are simply different short-term and long-term goals for every generation which gives them various comfort zones and priorities.

Financial planners ask investors questions to assess their risk profile and help them choose which investments suit their needs. Plainly, there are two simple questions an investor should ask themselves: how much money are you investing and for how long. If you are willing to invest your money for a short or long period of time will ultimately ascertain which investment portfolios might be be suitable for you.

If you are borrowing to invest, remember to get low risk investments. High risk investments might cause you sleepless nights especially when the money used for the investment is loaned or borrowed. In this situation, an investor should calculate the cost of the loan and the possible return of investment. This way an investor could weigh the cost of the loan versus the projected outcome of the investment and make sure that the latter is always bigger than the former. If you find yourself as a bold and daring investor gearing towards big returns then it is advisable to seek the services of a licensed financial adviser. They will find the best investment for you given the parameters of your situation.

One must remember that whatever generation you are from, investing should be fun and exciting and not stressful and nerve wracking. Earning profit is definitely something fun. If you are spending sleepless nights on an investment then maybe you should just put your money in a savings account or a time deposit.

Start with getting a job during the Holiday Season. There are a lot of retail stores out there needing an extra hand and would be glad to employ casual staff. This should give one the chance to make extra cash. One’s resume should be printed right away and distributed amongst the stores in one’s local area.

Whilst one is looking for work, selling some items can be taken into consideration. Do a garage sale or advertise some items on eBay. They say Australians have a lot of unwanted items lying around worth approximately $3000, so start selling and turn them into cash and make extra space at home in the process.

Unwanted jewelry is also another option. A number of friends may be interested, otherwise go to a place that buys jewelries.

Another idea would be, if one has room to spare whether on a short or long term basis, they can rent out that extra space. Do not let that extra space go to waste –  backyards included. Put up an ad and make cold cash out of that backyard. It can function as a storage area for either a car or a boat. There are a lot of people downgrading their homes, so extra space for lease may just be something attractive to them.

There are really a number of things one can do to gather up cash in time for Christmas. Except for simply selling and renting, there are also services one can offer. An example would be house-caring services. Get paid for watching over people’s home while they are out of town. Probably do some gardening, look after pets or receive mail. Ask for the help of friends and family to market this kind of service that you intend to offer.

Moreover, more options are available for tech-savvy people. They can make the best of the internet and do online surveys. Known companies reward those who complete their questionnaires with points which in turn, once accumulated, can be redeemed for cash. All one has to do is get to know the payment system.

Making the best of one’s skills will come in handy as well. Bake brownies and muffins that can be sold at the Sunday Market. Sew or stitch something together; utilize those arts and craft skills by either painting or making fashion jewelries.

There is no other way to prepare for a Merry Christmas but by saving up for it. Having enough cash around can be a form of security which gives options – a whole number of options. Enjoy a guilt-free Holiday Season by being ready. Be there for loved ones and people that matter. Do not make them forget the gift of the occasion and the joy it brings for everyone. So get going, distribute those resumes, start marketing those skills and advertising services that can be offered. It will take a bit of an effort, but in the end it will all be worth it. An upcoming happy Christmas and a debt-free New Year should be expected.

Self-awareness is the best start. Get to know the world of finances – invest in one’s strengths and skills on how to manage money. Knowing when to detect that it is already overspending and a debt is beyond the point of no return is a skill everyone has to master. If there is time, attend seminars or classes, talk to those who have done it such as paren’ts, friends, colleagues, or even acquaintances. It would be better if one can get it from financially successful people. The aim is to study and learn.

The next step is for one to have a working goal. Most successful people would say the same thing, one needs to have a goal. It is that goal in mind that will help one to not overspend and feel motivated to get over the overwhelming debt one may already be in. Thinking of one’s future, of being financially free is a huge factor. It will help one stick to the budget. Financial freedom should be the ultimate objective.

Limit spending options. It is no different from a person going on a diet who avoids buffets and picnics. Burn those bridges by not carrying credit cards, or even by deactivating them. This is just the beginning – the easy part. The hard part is not window shopping, avoiding online stores and getting rid of the impulse buyer syndrome. It would help to think it is cheating on one’s budget if the impulsiveness cannot be suppressed. Even carrying debit cards should be avoided. Master the discipline of using only what one carry and what one can use. Do not go the extra mile to purchase something that is not important.

Start carrying just cash moving forward. Use cash for all personal purchases whether it be fuel, clothes or groceries. As soon as one’s budget is all out, waiting for the next salary cycle to start is the only thing that can be done. Self-regulation is taught when using just cash. Yes, that means even for entertainment and hobbies it should be cash as well.

It does not have to be done alone. If everyone else is splurging and one is getting the feeling of being left behind, find a buddy or pal with the same objective. It is imperative that one knows there are others out there with the same plans and dedication, setting financial limits. Talking about it with someone who is in the same shoes can be motivating and makes it all seem so easy, like a walk in the park. Not to mention the fact that in the end, all that dedication and discipline is after all, worth it.

You’ll find that there’s quite a lot of term deposit accounts available on the market. Choosing the right one to suit your needs is essential. The standard term deposit account available from ME Bank is considered to be one of the best. If you don’t know anything about ME then now would be a great time to find out more about the company.

Who Are ME?

ME is a bank with a difference. It was set up properly in 1999 and its goal is to offer value banking. Most financial products come with no annual fees. For the products that do come with a fee, it is typically very low in comparison to the competition.

It has branches all over Australia and the unique thing about the bank is the fact that it treats all of its customers like members. All of the staff are situated in Australia and you are guaranteed a real answer to any of your questions. It is a bank that you can trust, and that isn’t something that you can say about most banks these days!

The ME Standard Term Deposit Account

If you want to benefit from a high interest term deposit then you simply need to open the account with at least $1,000. You can choose a term amount from 1 month to 24 months. Think about what your goals are and then choose a term to suit them.

The account is open to Australian citizens and if you already have an account with the bank then it’s easy to update it. You could even do it over the phone if you would prefer.

There are a number of different term deposit accounts available through ME. The Super Members Term deposit is available for 6 to 12 months.

The great news about the standard term deposit is that anybody who is over the age of 12 can apply. There isn’t a maximum amount of money that you can save. If you expect to have more than $500,000 then you will need to contact ME to find out what the interest rates will be.

You may like more than 1 term account. If so then this isn’t a problem. The standard term deposit account is suitable only for individuals. However there are accounts available for businesses too.

Overall, the ME standard term deposit account is great for those who want to know exactly how much they will get once the investment matures. They give you a strong sense of security and with no fees to worry about, the deposit account from ME is a very sensible choice.