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Do you have the budget blues?

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The 6 letter word that makes you duck for cover. We all know we should have one but how many of us actually do? Are you living pay day to pay day counting down the days until the next instalment? Credit cards spiralling out of control as you struggle to make ends meet? or, do you simply have no idea how you are going and just flying on a wing and a prayer hoping that it will all just work out?

If you answered yes to any of these than a budget can quite simply change your life. Even if you are making more than you spend a budget can make a huge difference to your overall financial health by putting your hard earned cash to work for you rather than throwing it away on the latest shiny new ‘thing’.

So why do you need a budget? Let me count the ways . . .

 

1. It will ensure that you don’t spend money you simply don’t have 

After my last blog I think we all familiar with Generation X’s love affair with debt so this point may be hitting home for many. The problem with plastic is that many people aren’t even aware what they are overspending on their cards until they are literally drowning in debt. The good news is that if you create and stick to a budget, you’ll never find yourself in this precarious position. You’ll know exactly how much money you earn, how much you can spend and how much you need to save – Perfect!! I know that keeping track of a budget isn’t nearly as much fun as going on a shopping spree with your Visa Card. But would you rather be going on that dream holiday or putting a deposit down on that home you’ve been saving for or making an appointment with a debt counsellor this time next year? l know which one I prefer. 

2. It will help you identify your ‘bad’ spending habits

Are you guilty of throwing your hard earned cash away? Building a budget forces you to take a really close look at your spending habits. When you do this you may notice that you’re spending money on things you simply don’t need. If you are really honest with yourself, do you honestly watch all the channels on your Foxtel subscription? and, do you honestly need that new pair of shoes? Budgeting allows you to rethink your spending habits and re-focus on your financial goals.

3. It will help you prepare for emergencies

Life is filled with surprises, some better than others. If you lose your job or become sick or injured it can lead to some serious financial stress. Often these emergencies arise at the worst possible time – when you’re already strapped for cash. This is exactly why everyone needs an emergency fund of at least 3-6 months of living expenses.

This extra money coupled with income protection insurance will ensure that you don’t spiral into the depths of debt after a life crisis. To get started set yourself realistic goals and start small. Even if you can only save as little as $10 – $30 each week, your emergency fund will slowly build up. You just need to start.

4. It sure beats counting sheep

Are you tossing and turning at night worrying about how you are going to pay the bills? Following a budget will give you back some control, see a way out and give you more of that blissful sleep you are yearning for.

 

Some pretty compelling reasons to get started don’t you think? But where do you start? The first step is to put aside an hour of your time to work out where exactly your money is going right now. You will need the following to help you with this part:

  • A budget planner
  • Bank Statements (personal accounts and credit cards)
  • The last copies of your bills (if you don’t pay them online)

Given that our salaries go straight into our bank accounts and the ease of paying bills on line, its easy to get all the information we need from our bank statements. Keep in mind that some bills are quarterly so you may need to go back 3 months to see how much you are paying for gas for example. If you are a cash is king kind of person then you may also need copies of your bills that are paid for in cash as well to build your budget.

There is a great simple budget planner available on the Money Smart website which can be found here:

https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/budget-planner

If you are like me and like to be able to customise your input then I also have an excel spreadsheet that I have developed just for you. Send me an email and I’ll be sure to get it to you: info@oxleybridge.com.au

Once you are up and running its important to then keep track of your day to day expenses to ensure that you stay on track, there are lots of apps out there that you can use such as Good Budget and Track my Spend which are available on both iphone and android. Try them out and see which one suits you best.

And lastly, be sure to follow me on my Facebook site Oxley Bridge Advice. Like the page and you’ll be sure to never miss any of my financial tips.

https://www.facebook.com/pages/Oxley-Bridge-Advice/1399426776988526?ref=hl

Tammy

 

 

 

 

 

 

Talkin bout my generation

British Band 'The Who'

I know what you are all thinking, “Great song!!” released by The Who in 1965 right on the cusp of Gen X and a true classic. When I think about my generation – Gen X, I think of records, VHS, Donkey Kong, microwave ovens, spiral perms and Hyper Colour T-shirts.

Growing up in the 70’s and 80’s I also vividly remember the recession. It hit in the late 80’s resulting in high unemployment, 17.00% mortgage rates and a falling property market. There is no denying that times were tough, really tough.

So what do the experts say about Gen X? Well, they often refer to us as the lost generation. Lost because more often than not, both parents were working to make ends meet. Long day care centres were full to the brim and many children (from very early ages) were coming home from school to an empty home. With the financial pressures placed on families divorce was also on the up so there were many single parent families.

Toady we are characterised as being incredibly sceptical with a ‘what’s in it for me’ attitude and some say that we had the worst music ever of which I totally disagree. On a positive note we were the best-educated generation at that time with 29% of us obtaining a bachelors degree or higher.

So what does all this mean for Gen X from a financial perspective? Well, the greatest issues facing Gen X is debt and as a result a lack of savings. According to a survey by RaboDirect, Australians aged 30-50 are the least financially secure and are struggling under a mountain of debt. When you also consider that Gen X makes up 40% of the Australian population this is a huge problem.

The survey found that one-third don’t have enough emergency money to last more than 2 months should they lose their income and one-third only just manage to make ends meet payday to payday. A whopping 40% say that their financial situation has worsened during the past year.

Why is this so? Why have we made such a mess of our finances? Experts say that we have quite simply overextended ourselves. A lack of control has resulted in over spending, 40% of Gen X’s said they would use their credit card to purchase an item they otherwise couldn’t afford. A similar amount also said that they would find it difficult to meet their current credit obligations. These competing financial priorities are making it impossible for us to balance our books plunging us further and further into debt.

With this in mind over the coming weeks I will be providing some useful tips and information to ensure that you don’t find yourself in the same predicament or, if you are there now, provide a lifeline to help you get out of it.

Today, I am going to start at the very beginning and talk about credit reports. Last month there were changes made to the way that our credit history is being recorded and reported that everyone needs to be aware of. The changes officially went live on the 12th March but the collection of data actually began in December 2012. The biggest change has to be that under the old regime banks were only required to report late payments that were more than 60 days late; this has now changed to 5 days. In practical terms this means that if you forget to pay your credit card and make the payment 6 days after the due date this will be recorded on your credit report as a payment default and will remain there for 2 years.

Now, when a lender does a credit check on you they will be able to see a lot more information than before. The additional information includes:
• Account open date and close dates
• Type of credit account such as a credit card or personal loan
• Credit limit. This is the maximum amount of credit available to you for an account. If you accept a credit limit increase the new credit limit could be included on your credit history.
• Monthly repayment history on credit accounts such as mortgages and credit cards. This will reflect whether you paid the minimum amount required on your financial commitments each month on time or not.

There has been a lot of talk about how this information may be used when assessing credit applications. It could be that if you have a number of late payments you may be offered a higher interest rate than someone that has a clean credit history. We will have to wait and see.

Here are some tips to ensure that your credit rating doesn’t suffer.
1. Pay your bills on time – If you tend to forget when your bills are due set up direct debits so that you never have to worry.
2. Keep credit to a minimum – Only apply for credit if you really need it.
3. If you are having some financial troubles talk to your lender. You will be surprised with how helpful they can be.
4. Know your credit history – you can get a free copy of your credit report from any credit-reporting agency. I recently got a copy of mine from Veda. Here is the link to the free report http://www.mycreditfile.com.au/home/free-credit-file.dot

This is just the first step to gaining control of your financial situation. Over the coming weeks I will be covering off on more useful tips so stay tuned for more.

Tammy

Introducing Oxley Bridge

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Hi everyone and welcome to my blog,

It is with tremendous pleasure that I introduce to you all a new and innovative boutique financial services company Oxley Bridge Group.

I believe that we differ to other financial services companies out there in that we don’t just focus on one or two areas of your financial health but instead provide a complete service offering to ensure that you are receiving the right advice at the right time throughout every stage of your financial journey.

If you are like most people you have several pieces of your financial plan in place: taxes, investments, some insurance perhaps – maybe even a will? However, it’s likely that these pieces were developed independently and at different stages of your life. Is it any surprise that you wonder whether you are on the right path and making the best possible progress? We can help you address these concerns, at Oxley Bridge we specialise in looking after the needs of Generation X and Generation Y clients that are looking for an ongoing relationship with their adviser or broker and truly want to better their current situation.

To give you an idea about what we do, here is a brief summary of our services:

OB Finance – With access to over 40 lenders in our panel you can rest assured that you will get the right loan for you. Whether you are looking to purchase your first home, an investment property in your SMSF, commercial or industrial real estate, lease a motor vehicle or equipment or fit out a new office. We have all of your finance needs covered.

OB Financial Planning – We will help you to uncover your lifestyle goals and then work closely with you to ensure they are achieved. We help our clients grow their wealth through not only implementing wealth accumulation strategies but also assisting them with their budget. We don’t just set and forget either, once your plan is put into place we provide ongoing monitoring of your expenses including monthly cash flow reports to help you see exactly where your money is going and get you back on track when needed.

OB Insurance – No plan is complete of course unless you have adequate insurance cover in place. All the best laid out plans are worthless if you find yourself unable to earn your valuable income. We will tailor a plan specifically for your needs and review this annually to ensure that you are always adequately covered in the event that any of life’s challenges ever get in your way.

Estate Planning – Many people spend more time planning their holidays than planning what will happen to their estate. Granted, it’s not something we want to think about but the consequences of not having a valid will can be disastrous. Today with an ever-increasing number of blended families, Estate Planning becomes a vital component of any financial plan.

At Oxley Bridge we understand how important estate planning is and have established robust collaborative relationships with a number of specialist legal advisors who work with us to assist our clients in Estate Planning and in the related areas of Conveyancing and Property, Family and Commercial Law.

Accounting – I believe its imperative for every advice firm to have a trusted accounting professional as part of the team. For this reason Oxley Bridge group will also be adding specialist accounting firms to our team that will not only provides personal and business taxation services and advice but also specialist advice in Self Managed Super Fund administration.

I will be blogging on a weekly basis tips that will not only help you take control of your finances but help you build your wealth.

Tammy