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How to Manage your Finances without Worries

Managing your finances can be hard in the beginning. In fact, many people suffer from anxiety and stress because of financial instability. Money management is not about being frugal with your spending. In a nutshell, financial management is learning how, when and what to spend on. For starters, here are 3 simple ways to manage your finances and be worry-free at the same time.

Spend Less than You Earn

Majority of people have gotten used to the habit of overspending. A lifestyle of maxing out credit cards and draining out cash at the same time, will soon leave you in massive debts. You will get stuck paying off the principal amount, hefty interest rates and late fees. This state definitely brings tremendous stress in one’s life. More so, this may also affect your relationship with the people around you. If spending more than you earn is the path that you are on, then it’s about time we take a detour.

Investing may not be a get-rich-in-an-instant scheme but it’s all about moderate growth in value for your money. Investing, may come as a risk but with time, your investment will soon grow. The more investments you have, the more income you’ll soon receive.

Talk to an Expert

If there are doctors to cure a disease, a lawyer to initiate legal proceedings, then there are also Brokers and Financial advisors who can guide and help you with your finances. Brokers can be your instrument to getting better deals on mortgages and other bank products that you wish to use. Their expertise includes providing you financial options that suits your lifestyle. They will also be there to assist you throughout the process. In general, they do the work for you while you can simply just sit and wait. Worry-free indeed!

Be Grateful

This may not be significantly about financial management but this practice affects your total well being. The art of gratitude is merely about finding something to be grateful for everyday. It could be about anything and it could be as simple as being grateful for waking up another day. Practicing gratitude does not only attract positivity in life but it also bring realizations that money can’t buy happiness. Hence, it creates a chain that will change your spending habits to a better outcome.

There is really no shortcut in dealing with finances. Especially in this fast-paced economy that were in, there is a social pressure to spend even for the things that you don’t need. Regardless of the direction you pursue, living a quality life is always the goal. Your finances play a vital role in maintaining quality in your life. Managing your money while making it prosper at the same time is key to a better way of living.

How Could The New Federal Budget Impact You?

The 2017 Federal Budget has dished up some significant changes for the property market, with both sweet treats and some savory surprises thrown into the mix.

The goal of these changes is easing housing affordability issues in major cities, and this is being tackled on several fronts.

New regulations aim to slow down the main instigators of the demand which causes the ongoing increase in housing prices. These are foreign investors and property investors. Additional measures have been introduced to assist first home buyers to get a foot in the door. Here is a breakdown of the changes.

Of most significance in the proposed changes is the suggested amendments to Tax Depreciation for plant and equipment in residential properties.

There are two suggested changes that could have a significant impact on property investors. The effect of the first is that only outlays incurred by real estate property investors themselves will be able to incur depreciation deductions. The second amendment acts to restrict property owners who purchase after 9th May from claiming deductions from any Plant and Equipment purchased by the previous owner of the property. These items include things like blinds and carpets, as well as heating and cooling systems.

Regardless of these changes, it is still advisable to prepare a Tax Depreciation Schedule as depreciation deductions on items that come under the description of Capital Works, such as those fixtures contributing to the structure of buildings, will not be affected.

First home buyers may soon be able to contribute up to $15,000 per year of tax free earning into superannuation funds, then access that money to put a deposit on your first home. Whilst this measure aims to assist with effective saving, there are some clear holes in its design which have the potential to render it impractical. Most people who are looking at getting into the property market are focused on achieving their saving goals as quickly as possible, so as to invest at the earliest opportunity. With this mindset, moving $15,000 a year into super for the purpose of saving seems a somewhat unnecessary extra step in the saving process. Comparing this $15,000 a year to the sum most people want to achieve renders this change counterproductive. This being the case, it is difficult to conclude that this new measure, which presents a long-term approach to saving, will be helpful to many first home buyers.

Developers have a shiny new cap on the percentage of developments they can sell to foreign investors, 50% to be exact. This isn’t all the bad news for foreign investors, with what was previously a 10% withholding tax on properties worth over $2 million being increased to 12.5%, and the threshold dropping to include all properties worth more than $750,000.

An attractive new initiative for downsizing houses hopes to result in more properties becoming available within the market. Anyone who downsizes will now be able to contribute up to $300,000 made from the sale directly into superannuation as a non-concessional contribution. This means that the tax consequence of selling is significantly more attractive.
On paper, these changes look significant, but for now, all amendments proposed by the budget are still being debated and must be passed through Senate before they come into effect.

New Regulations For Interest Only Home Loans

The body that regulates the Australian finance industry, the Australian Prudential Regulation Authority announced some significant changes to interest-only home loan regulations recently. A new cap at 30% of all new residential mortgages has been established for interest-only lending.

So, why is this important? What impact does it have on you? Here’s a quick breakdown of some of the key elements of this announcement that might shed a little light on exactly how this news could affect you.

What is an interest-only mortgage loan?

An interest-only mortgage loan is fundamentally self-explanatory. The repayments you make cover just the interest on the loan, rather than both principal and interest.

This type of loan tends to be favoured by property investors, as it allows mortgage repayments to be minimised, while your property asset continues growing in value over time.

So, what’s the catch then?

The risk of interest-only mortgage loans is that you don’t make any headway on paying your mortgage principal, and if property prices happen to take a tumble, you could end up out of pocket. Interest-only loans have higher interest rates, and your payments will increase after the interest only period ends as you will then be paying the principal over a shorter timeframe. This means that interest-only loans are higher risk than other loans.

How do the new rules fit into this?

The new rules are being implemented with the goal of reinforcing sound residential mortgage lending practices in an environment of heightened risks. They are designed with the intent of protecting the financial well-being of the Australian community. The heightened risk refers to the ongoing price rise of the property market.

Why does this matter?

The essential relevance of all this is that this new regulation presents a very ‘one size fits all’ sort of approach, which may not in fact fit the aforementioned ‘all’. Small businesses are likely to be negatively impacted as it will now be harder for them to access appropriately styled debt for their size and business. Property investors may still see the advantage of interest only loans regarding their current cash flow and personal investment decisions.

2017 Better Business Summit

In Financial Team members Janine, Jill and Debbie took a road trip down to Sydney to attend the 2017 Better Business Summit and awards night.

While there, they heard from an exciting variety of speakers, including fitness guru Michelle Bridges and economic visionary Stephen Koukoulas.

After the conference, Debbie, Janine and Jill walked the red carpet into the award ceremony. While we didn’t win any awards, our team were finalists in four categories. There were 560 top brokers in attendance, so In Financial Services was thrilled to receive so many nominations.

We’d like to offer our congratulations to all the award winners and nominees, and thank all our clients who have supported us this year.

First Home Buyers

There is a lot of talk these days about young people and how hard it is for them to get a home loan.

If you are thinking of purchasing your first home or know someone that is getting ready to purchase, it is well worth your while to come in and speak to our specialists.

We can discuss your current financial position, what your position needs to be in order for you to buy, and what you need to do to get there. This may be devising a savings plan, consolidating personal debt, or looking at family guarantee options.

Just because the media says you can’t, doesn’t mean that’s the way it has to be.