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What is Passive Income?: How to Boost your Earning Power

What is passive income, balance between time and money

Our time and energy are limited, and spending our spare hours on things that matter most is key to a balanced and rewarding life. Thankfully, with passive income streams, working Australians can balance their productive and restful hours whilst still bolstering their earning power.

Making money through our assets and skills via streamlined or automated income streams is an effective way to strengthen our finances without burning the candle at both ends. This is what we call passive income – making money from money, or money from assets we don’t need for ourselves.

For many, the hard part is saving and accumulating the sum or asset itself, but once you do have something that can generate passive income, knowing how to establish and optimise that income stream is key to maximising your passive income. It doesn’t matter where you place yourself on the wealth ladder or what your primary source of income is – increasing your revenue streams is helpful for and most importantly accessible to everyone, from the unemployed to those budgeting for an apartment or house.

At Best Financial Planners, we often see clients with assets and skills going unused, and with a little effort and planning, they could generate a steady and consistent passive income.

What is passive income?

Passive income is a way to generate money without your active involvement, like working for it regularly. It can involve optimising your assets, ongoing sales from something you created, renting something of yours and much more.

Passive income requires some upfront work to set up the income channel and make sure it’s best positioned to earn you money, but it’s classified as a way to make money inactively. For those looking to grow their income streams and their savings or retirement fund, any way you can create passive income is especially helpful because they don’t demand your time and energy.

how to make passive income online

How to make passive income

As passive income relies on having some form of asset or investment to begin with, the best place to start is to look at your current situation, portfolio or skills. You might have a car space you don’t use, a growing savings account, an eye for good graphic design or a passion for writing, for example, that can be utilised towards creating passive income.

Expanding your perception on how you can earn money can help you reach your savings goals faster, get out of the paycheque-to-paycheque cycle, and even overcome the barriers to proactive retirement planning. So, here are some common ways you can generate passive income:

Savings interest

We’ll start with something every reader should have: a savings account. You may or may not have a large sum of money in your savings account, but this account generates passive income for you through interest. The bank pays a percentage of interest on the sum of money in your account, as compensation for you storing your money with them, and giving them the chance to use those finances for their own services.

If you have significant savings that you want to use to generate passive income, it’s well worth exploring the bank market and comparing which savings account will offer the best interest returns. A competitive savings account will yield around 4-5% interest, while transaction or everyday accounts can offer as little as 0.1% interest rates. So make sure you’re storing your savings in a high-yield savings account to generate the most passive income and keep your money compounding on itself.

Dividends on stocks

Another, often more worthwhile, platform to generate money from your money is through investing in shares of ETFs. When you invest in stocks in a business, many, but not all, will offer you dividends on your equity. The ATO has stated that the average dividend yield for the All Ordinaries Index is 3.65%. This means that if you were to invest $10,000 in a large corporate company that offered a 3.65% dividend yield, you would receive a passive income of $365 over the course of the year.

While this rate is lower than the high-yield interest rates, share investment is considered a better wealth management avenue because your equity grows with the company’s value. If the same large corporate company you invested in follows a typical growth path, your base investment will inflate, so when you want to sell your stocks, they will be worth more, and you’ll still receive passive income from the investment.

Rental income

If you own a property, you’re likely already aware of the rental income opportunities available to you. Often, when people rent out their property, the money from the rent goes towards the mortgage repayments, but if you don’t have a mortgage, this can become immediate passive income for you.

What many people don’t consider are the countless other ways to generate rental income. These days, there are modern platforms that allow you to list and rent all kinds of assets from cars, car parking spaces, bikes, furniture, clothes, textbooks, tools, cameras and even artwork. In these instances, you’ll be lending your assets and possessions that people find valuable for a specific event or task, and you’ll earn money that you don’t have to actively work for.

Sales and royalties

If you have no assets to get a rental income from or funds to put into high-yield savings or shares, you can create something that generates passive income over time. Consider how authors and artists make money from their book and song sales indefinitely. You don’t have to be an award-winning artist to do the same. Lean into your creative qualities, technical skills and unique perspective to discover what you can give to the world.

Digital products are a great example of a modern way to earn passive income from an asset you create. These refer to graphics or artwork that you can post on marketplace sites, and people can purchase the digital file and print the graphic for themself. The money comes in like royalties without the artist having to do anything once listed, and anyone who can use a design platform can create these assets to generate passive income.

Other ways to generate passive sales and royalties income are through technical guides, ‘how-to’ books, selling your photography or creating an app and other types of valuable resources.

best savings account Australia for passive income earnings

How to choose the right passive income ideas for you

The goal with passive income is for it to cause as few interruptions and demand as little energy and attention from you as possible. After all, you’ve probably still got your main income stream occupying most of your time and attention. Choosing a passive income stream that already matches your skills, interests and asset base is the best approach for success. Here are some criteria to assess your situation and help you identify how you can make passive income:

What resources do you have?

If you have a car that you don’t use often, rent it out. If you have a few thousand dollars sitting around, invest it or store it in a high-yield savings account. Maybe your rental has a car space, but you don’t have a car, or you’ve got some fantastic formal clothes that people would love to borrow – all of these are passive income opportunities.

Assess your skills

Stand back and take an objective look at your skills, interests and strengths. If you love cooking, DIY, art or photography, you can lean into any of these interests and create resources for people to buy.

Understand your financial goals

Maybe you’re preparing financially for a divorce, wanting to put extra money into your super or take a holiday that your budget just won’t allow. When you define what you want to achieve financially, you’ll understand how much work you need to put into generating passive income streams initially.

If you’re just trying to optimise what you already have, you can do that with some tweaks in where you store your money, but if you’re looking to build wealth, you will be better suited to investments.

Consider your time capacity

Some passive income ideas require a little more maintenance or upfront work than others. Writing an ebook is more suited to someone who has a significant amount of spare time, whereas creating simple graphics that take under an hour is better for someone working full time. Or if you’re really time–poor due to work or family commitments, see what assets you can rent out in and around your home.

Think big, but start small when planning for passive income

When all the opportunities to create a second or third income are listed out like this, you might be eager to jump in and get started with as many as possible. That’s great. But be careful not to overwhelm yourself too soon and get frustrated if that payoff takes a while to come in. You’re better off starting small, assessing your resources, trying a few different options and growing your passive income streams over time. This way, your streams are more sustainable as you’re able to maintain your involvement once the initial enthusiasm wears off.

Once your passive income starts coming in, it might be less exciting, but it is always a better financial decision to reinvest this money by placing it in high-yield savings or shares. If you consider your passive income as a wealth generator and continue living within the means you had previously done, this money will grow over time and the whole process will become even more rewarding.

For financial advice on organising your assets for passive income or wealth generation, contact us to find expert guidance in your local area from the team here at Best Financial Planners. We’ll help you choose a financial advisor or point you towards some invaluable resources for your financial journey.

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Australia’s Barriers to Proactive Retirement Planning

Barriers to retirement planning featured image

Avocado on toast, as it turns out, is not what’s causing Australians to feel more worried about their financial future than ever before.

We have a growing cohort of the population heading into retirement over the next five years who have to wait longer to be paid a pension, and fears within the younger workforce that they will be working longer than their predecessors while being increasingly put in charge of managing their own retirement funds. Financial shifts like these are a result of years of economic movements, and there is little point in blaming the moon for the tide.

However, only 27% of Australians have ever received financial advice. This is not because we’re educated on financial concepts throughout our lives or that we’re given the toolkit to manage finances. In fact, data shows that we score lower on financial literacy than comparable countries and that many more see the value in financial advice. But there are Australian-specific barriers to engaging with financial consultancy that can counter the disadvantages many younger Australians face.

Australia’s low financial literacy rates (the understanding of financial concepts and how they play out in the real world) are one barrier to better retirement planning and aged care. Women and lower socio-economic classes are at a steeper disadvantage with gender and class gaps further reducing their financial literacy rates and affecting their ability to counter the disadvantages. Alongside this, Australia’s stigma around personal finances inhibits the free flow of knowledge that can help us optimise our money, early and intentionally.

Over the years, policymakers have leveraged Australia’s self-sufficient attitude to many aspects of life and livelihood to drive self-efficacy in retirement planning, yet they have not filled in the knowledge gaps for the workforce. This culture of self-efficacy leaves Aussies with a lack of awareness of assistance programs, not knowing where to go for help and not knowing who to trust. It needs to change in order for us to become a nation that can deliver the income needed for a comfortable retirement after a career of hard work.

Isolated in confusion

From a cultural standpoint, Australia is conservative about personal money matters, and there is a negative class stigma that inhibits Aussie consumers and households from asking for help. We’re encouraged to achieve the nuclear family with picket-fence housing, and homeownership is a life goal for over half of Australians, no matter how long it takes to pay it off.

With such high financial goals, it would make sense for it to be a hot topic of discussion. But 28% of Australians don’t like talking about their finances openly with others, the topic comes only second most uncomfortable after sex. 96% of Australians have experienced financial hardship, and as the topic comes with shame for many, Australians are isolated in managing their finances, paying off their mortgage and planning for their retirement.

Breaking down financial literacy

Before we get any further into breaking down the impact of illiteracy rates on Australian retirement funds, let’s directly break down the stigma.

In a study of Financial Literacy and Retirement Planning in Australia, Agnew et al. implemented a survey to measure financial literacy in a range of countries and relate it to retirement planning. Their benchmark for financial literacy is measured against consumer understanding of three tenets: inflation, interest and risk diversification. Below, we’ll briefly explore these tenets and how they impact money management.

Inflation

Inflation is the rate of increase in goods and services over time. It won’t tell you the exact increase rate of eggs over the last year, it should be looked at as more of a broad measure of the rise in the cost of living in a country. It’s considered to be positive for the economy and is caused by a matrix of factors. Without knowing inflation rates, the workforce is financially worse off in many ways, one example is that workers aren’t motivated to negotiate higher wages and salaries to combat inflation.

Interest

Interest is the money it costs to borrow money or the money earned in lending money. Banks pay interest when you hold money in an account with them because they technically have access to this money to lend to others. This can sound like a good deal, but your interest rates are competing with inflation where $10 yesterday means more than $10 today. This is why many financial advisors would encourage you to invest instead of save because investing in the economy itself means your money grows with inflation. Of course, it’s not that simple when you’re investing in the growth of one company, which introduces the concept of risk diversification.

Risk diversification

Risk diversification refers to the splitting of your investment portfolio across different companies and industries. By diversifying your investments, you mitigate the impact of when a company or industry you’ve invested in regresses because the remainder of your portfolio should increase enough to more than cover the losses.

Learning these concepts is foundational to Australian consumers being able to make their money work for them and for the economy.

Australians are among the least knowledgeable in financial literacy and retirement planning

By default, we exist within our economic system. There isn’t a step to take that leverages us into the merry-go-round, we’re either actively involved or passively. It should follow then, that financial literacy and education should be an inherent part of education, so we can all take active steps to optimise our income early and live comfortably in retirement. While that makes logical sense, it’s not the reality.

So where does Australia place in Agnew et al.’s study against the three tenets of financial literacy?

Their data shows that the average Australian’s financial literacy is the equivalent of “the young, least educated, unemployed and those not in the labour force most at risk, of comparable countries”. While their knowledge of inflation and interest is on par with that of other surveyed countries, they fall behind in risk diversification knowledge.

Financial literacy survey results by age infographic
Results of surveyed Australians answering questions within three categories of financial literacy, separated by age: Agnew, Julie & Bateman, Hazel & Thorp, Susan. (2012).

What Australia’s age literacy rates tell us

Australians start behind comparable countries, but the trend line in the graph above shows that our knowledge increases with age. The over 65 category scores close to other countries, with over half of this cohort answering correctly in all three categories. As Australians approach retirement age, their growth in financial education may stem from the pressure of saving for retirement, just as their years earning an employment income that could have had a powerful impact on their retirement come to an end.

For younger Australians, more than half of those aged under 35 showed a lack of understanding in one or two of the three categories. Young Australians without a proper understanding of financial concepts are working within an economy that has seen inflation rates over the past three years at three times the average and a wage price index far below. With this financial illiteracy, there is little opportunity to counter the economic conditions other than use their savings to pay their bills, leaving increasingly less left over to invest in their future at a time in their lives when it will produce the biggest retirement dividends.

Male v Female financial literacy survey results infographic
Results of surveyed Australians answering questions within three categories of financial literacy, separated by gender: Agnew, Julie & Bateman, Hazel & Thorp, Susan. (2012).

Women have lower literacy rates which impacts their retirement funds

There is also a dramatic difference in financial literacy in the gender category. Around 34% of women demonstrated an overall understanding of interest rates, inflation and risk diversification as the three tenets of financial literacy. During retirement, the ABS tells us that this gender gap continues, with superannuation contributing to 33% of income for men and 21% for women.

Yet, Australians are increasingly pushed to take responsibility for their finances and retirement

Australia’s culture has long been known for its pull-yourself-up-from-your-bootstraps mentality and valuing self-sufficiency. This lack of interpersonal dependence and community values plays into the culture of you-can’t-talk-about-money, and it has also paved the way for policies moving away from retirement plans and pensions and Australians being increasingly pushed to manage their own retirement.

In The Australian Journal of Management’s study, the authors state that “ there has been a push to make [you] responsible for [your] own financial retirement planning in an environment of greatly increased longevity, a declining number of employer pension plans and defined benefit pensions (Holzmann, 2013) and an increasingly complex financial services industry.”

The average age of retirement for Australians is 56.9 years old. In 2017, the minimum age to qualify for a pension increased to 67 years old. This means that there are 10 years that retirees need to live off their superannuation on average, which is the longevity the researchers are talking about. If you’re currently in employment, it’s hard to visualise and estimate how much money you will need to retire and live comfortably in ten years, but anywhere between a couple of hundred thousand to just under a million dollars constitutes a comfortable retirement. It’s no wonder only around 30% of retirees have enough for the retirement they had planned for.

Avg age of retirement infographic

Experts are also estimating a retirement surge in the near future, with a spike in the number of people set to retire in the next five years. For younger people, the sentiment seems to be that the pension age will increase further “unless the government can meet the financial requirements of the growing cohort of retirees.”

These factors increase the need for workers to seek professional financial advice. Yet financial illiteracy itself is a barrier to engaging with financial advice. Many people want to hold on to as much savings as they can, which, for many, is misguided financial management, as they could be seeking advice, investing or contributing to their superannuation.

How illiteracy affects retirement planning in Australia today

Aussies are putting off our retirement plans

75% of Australians find the retirement system complex, fueling a lack of confidence in having enough income during their retirement to live comfortably. Retirement literacy is directly related to financial literacy, and with this literacy, Aussies could turn to better retirement planning measures. Instead, they are planning to retire later in life than ever before, as the workforce believes they have to earn more lifetime income instead of optimising their money and are anxious that the retirement age will increase again before they reach that age.

We had an open-source experiment on the attitude towards retirement funds recently when the government enabled early access to superannuation during COVID-19. While this was necessary for some to pay bills, financial illiteracy may have caused others to access it without knowing the risk to their retirement fund as 12.5% of people who made deposits put it in their savings account.

Even more recently, the approved First Home Super Saver Scheme has allowed aspiring home buyers to withdraw from their voluntary contributions in their superannuation to help pay for their home. However, anyone is free to make voluntary contributions to their superannuation, so all that this scheme does is incentivise Australians to contribute to their superannuation so that the money is invested into the Australian economy. While early contributions to superannuation are a powerful way to grow retirement funds, as the scheme only allows you to withdraw it for a mortgage, it leaves younger Australians locked into a, sometimes life-long, debt.

Over 5 million Australians have struggled to make their loan and debt repayments. When we consider this volume of people and the sheer size of mortgage debt, we can see how loans are irresponsibly pushed beyond people’s capabilities. And with enforced self-efficacy and stigma around money matters, Aussies aren’t asking for help. This scheme leverages the self-efficacy in personal finances that Aussies are bound by while harnessing financial illiteracy to take from their retirement funds and invest in a multiple-decade debt that will rule their working life.

Financial illiteracy in men vs. women

The gender financial literacy gap affects many women in retirement. However, the gender gap in other areas contributes to a less prosperous retirement for women on average, too. Many cultural and policy factors contribute to women earning a lower lifetime income, and as proportional salary contributions are currently the only compulsory funnel into superannuation, it leads to a lower income for women in retirement.

Some examples of how the gender gaps cause a lower lifetime income for women include:

With an even lower rate of understanding concepts like compounding interest and risk diversification in investments than men, there is little motivation to prioritise superannuation, even if their income allows them to make contributions, which is a markedly lower possibility for women. On top of this, the average woman in Australia is less likely to seek out advice due to gender bias. This is why women financial planners and advisors are critical.

Barriers to financial literacy and advice

We don’t know what we don’t know. Socrates’ phrase echoes through the financial realm, where the wealthy benefit from the lack of understanding of the remainder of the population. Without knowing where your money is best placed and why, you default to giving it to someone else to grow it for themselves like your bank using your deposits for their own lending power. Thus, financial illiteracy itself is a primary barrier to expanding your financial literacy.

Beyond this, many Australians distrust financial institutions. They know these institutions are making money from them, so they’d prefer to keep their distance. This mistrust is amplified through media-lead fear-mongering where scandals, as you would see across any industry, are emphasised, knowing personal finances are a sore and triggering point for viewers and readers. This has compounded the ‘Us vs. Them’ situation between the finance sector and the rest of Australia. When all of this is mixed in with a lack of financial education in the schooling system, Australians are in a bind where they remain uninformed and have a distrust holding them back from acquiring the knowledge that will help them live a prosperous retirement.

Boost your financial literacy to prepare for Australia’s cultural shift on all things money management and retirement planning

As Australians, we need to create a shift in culture. If we are thrust into self-efficacy to build a retirement fund, then continuing the narrative that supports money stigma and financial illiteracy is doing us all a disservice. Instead, we can work together to share knowledge and educate ourselves, removing the remnants of media-lead distrust and seeking advice for the benefit of yourself and your well-being in retirement.

On an individual level, illiteracy like not understanding risk diversification indicates that Aussie consumers may struggle with the concept of superannuation and the safety it offers in investment diversification. Realising that financial illiteracy may be holding you back from seeking advice and education and keeping you in a financial cycle that you can’t leverage your way out of can be enough to dismantle the barrier. From here, you can start to bolster your financial literacy by seeking advice that will benefit your retirement and optimise your money as early as possible so you have the means to manage your retirement responsibility proficiently.

Ultimately, Australians do want to engage with and see value in financial advice, but distrust is the main barrier. The best step you can take is to begin educating yourself and finding the right support. Get started with your own learning today with our Hints & Tips or you can explore our suggested books or podcasts to financially upskill and optimise your money for retirement.

For anything else, contact our team at Best Financial Planners and we’ll be in touch with more information.

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Are Financial Advisors Fees Tax Deductible?

Are Financial Advisors Fees Tax Deductible

It’s tax season once more, but knowing what you may deduct can be difficult, especially when it comes to expenses for financial advice.

Financial advisors may also recommend tax-related advice to their clients. This is likely the case and occasionally inevitable given that we are dealing with financial problems.

Whether the price of financial advice is tax-deductible, however, is not that clear-cut. Financial advising costs are subject to the general deductibility rules.

This is because there are no special rules governing their deductibility. Which can make filing your tax returns a bit of a headache.

So, are financial advisors fees tax deductible? In this article, we are going to discuss which financial advisor fees are deductible and which fees aren’t.

How Do You Know When A Financial Advisor Fee Is Tax Deductible?

Advice fees are not subject to any special regulations regarding their deductibility. Thus, they are covered by the standard deductibility rules for other expenses.

According to these regulations, you are entitled to a tax deduction for any costs incurred in acquiring or producing income that is subject to taxation (officially referred to as “assessable income”).

With the exception of expenses that are made for capital, private, or domestic purposes.

In general, you can deduct the costs connected with investment advice from your taxes. As long as the advice you receive results in an investment that generates assessable income or is closely linked to one.

Additionally, fees that are not connected to a specific investment that generates assessable income are not deductible.

For example, the cost of a conference you attended to learn how to invest would not qualify as a tax deduction.

However, it is tax-deductible if you go to the conference to enhance your present investing portfolio.

Which Fees Are Not Tax Deductible?

The advisor fees are not tax-deductible if the goal of the financial advice is to create a plan, or if the advice is unrelated to assets or investments that currently provide taxable income.

Due to their lack of connection to the production of assessable revenue, the following fees are not tax-deductible:

  • Upfront Fees
  • Financial Plan Preparation
  • General Financial Advice
  • Non-Assemble Pension
  • Income Advice
  • Initial Investment Advice

This is due to the fact that the aforementioned costs have not yet increased your taxable income (annual taxable income).

These charges may be exempt from tax, if you obtain advice to modify an established investment portfolio that produces taxable income as a portion of your continuous portfolio management.

Are Financial Advisors Fees Tax Deductible

Common Financial Advisor Fees

Below are some of the more common financial advisor fees you may come across, and whether these fees are tax-deductible or not.

Investment Loan Arranging Fees

This is regarded as a borrowing expense, thus it is deductible from income tax over the course of 5 years or of the loan’s term.

The goal of this loan must, however, be to generate income, which would then be taxable.

Advice On Managing An Existing Investment Portfolio

Tax deductions are available for the cost of financial advice related to managing an existing investment portfolio.

The fees must, however, be connected to generating income in order to be fully deductible.

This means that only a portion of the costs will be deductible if the advice also refers to some goods that don’t generate an income.

This includes insurance premiums, managing pension funds, or private loans.

You could occasionally get suggestions to change the combination of investments you own.

These expenses will be deducted if managing your investments includes them as a necessary component.

However, if the expenses are related to creating an investment plan, they are not deductible.

Establishing An Financial Plan/Investment Portfolio

As a capital expense, this cannot be deducted from taxes. The Australian Taxation Office (ATO) issued a Tax Determination (TD 95/60) on this topic back in 1995, however this topic is currently under review so may be changed soon.

It claimed that there is insufficient correlation between making investments and profiting from such investments.

The expenses related to creating a financial plan also comes under this topic as well.

Advice On Cash Flow And Other Areas

Any advisor costs that have to do with management of cash flow or other matters, for example, like the need for insurance.

These are not related to producing assessable income for tax purposes and cannot be deducted as a business expense.

Financial Advisor Fees

Your financial advisor should ideally break down their fees.

This is so you have some supporting documentation for what may and cannot be declared as a tax deduction.

The ATO will approve a reasonable approximation, if your financial advisor isn’t able to offer you a complete breakdown.

For instance, 15% of your advisor’s fees would be tax-deductible, if they spent 15% of their time analysing your present income-producing investments.

The financial advising sector has been advocating for tax deductibility of all advice fees, including commissions, for over 30 years.

All of this appeal has so far gone unanswered by the government. Although, as mentioned above, the ATO is currently reviewing some of its regulations, so changes may be coming.

Are Financial Advisors Fees Tax Deductible - Final Thoughts

Unfortunately, it isn’t clear which fees are and aren’t exempt from tax. However, we have mentioned some of the most common financial advisor fees above, and discussed whether they are tax-deductible.

At the end of the day, if your financial advisor fee is related to ongoing advice for an existing portfolio or for an investment that is generating assessable income, then it is tax-deductible.

It is important that you have a clear breakdown of all the fees of all the work your financial advisor has completed.

This will help you to understand how much tax you may be able to deduct. Otherwise, you are allowed to provide a rough yet reasonable estimate.

We hope this article has been informative. Hopefully, you now have a clear understanding and can answer the question: are  financial advisors fees tax-deductible?

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Does Refinancing A Car Hurt Your Credit

Does Refinancing A Car Hurt Your Credit

There are many reasons why someone might refinance their car.

Finding a better deal, needing more stability, or entering into a better financial situation is the most common.

However, just because you can refinance your car, doesn’t mean you should. We will explain all the details, and break down the process of car refinancing and answer the key question: does refinancing a car hurt your credit?

What Is Car Refinancing?

Car refinancing is when you switch or change your current financing contract. When you buy a car you can either purchase the vehicle out right, or you take out a loan.

These loans are called car finances, and they allow you to buy the car by paying for it monthly instead of all at once.

As with any loan, you will receive interest fees for the length of time you borrow money.

Refinancing is when you swap your current contract for a new one.

This normally means changing providers, but you can also refinance your car with your current provider but on a different contract.

The second contract “buys” the first contract, allowing you to move from one agreement to the next.

Why Refinance Your Car?

The most common reason to refinance your car is to get a cheaper deal. You may have started the contract with a poor credit score, and after a couple of years found yourself in a better financial situation.

With a better credit score, you could use a new provider with a cheaper APR or interest rate.

Others refinance their car to consolidate their loans as part of a new financial planning and management scheme by a financial advisor.

Instead of having multiple little loans, they take out one large loan which pays the little ones off. This is cheaper overall, as you won’t have to pay a flat fee from multiple lenders.

It also makes budgeting easier as you can see exactly how much you have left to pay, by looking at a single account.

Another reason to refinance your car could be due to financial issues.

If your income has lowered, and you cannot afford your current contract, you could reduce the monthly payments and increase the term or length of your agreement.

This is usually more expensive in the long run but allows you to keep your car.

Does-Refinancing-A-Car-Hurt-Your-Credit-2

Does Refinancing a Car Hurt your Credit?

Most people refinance due to payment changes. However before you agree to a new loan, you should consider how it affects your credit score.

Initial Decrease - Due To Hard Enquiry

Whenever you apply for credit, your credit score will automatically dip. This is because the lender will carry out a Hard Enquiry in the AU Market.

This enquiry allows the lenders to see your detailed credit history. However, it also lets other lenders know that you’re in need of money and are therefore a risk.

Requiring credit suggests you are in financial difficulty.

Because of this initial dip, you shouldn’t apply for more than one loan at a time.

Even if you’re attempting to gather comparative prices, allowing the lenders to create Hard Inquiries will create multiple dips in your credit score.

If a lender agrees to your refinancing plans, you can start paying off the loan as normal.

After a month or two of consistent payments (correct amounts and on time), your credit score will return to its previous figure.

Because of this, you shouldn’t be worried about the initial decrease. Instead, you should be aware of it, and restrain yourself from applying to too many lenders.

Initial Decrease - Due To Borrowing Amount

The amount you borrow will also affect your credit score.

Normally, your score will dip to reflect the new borrowing amount, however as you are refinancing you’re unlikely to borrow more than your previous agreement. This means the dip shouldn’t be big.

However, if you’re refinancing due to financial difficulties, and need to borrow a larger amount, you will see a large drop in your credit score.

Either way, the score will rise again in a month or two, as long as you stick to the payment plan.

Ability To Pay On Time

In your new contract, you will be told the recurring monthly payment plan.

This will include the day you need to pay before each month and the amount you need to pay. If you fail to make these payments correctly, your credit score will decrease and you will be fined.

This decrease will not go away after a month or two. Instead, it will stay on your credit history as a late payment and will remain there for 2 years.

This is the most significant impact your new loan will have on your credit report. However, the impact would be just the same on any loan. Late payments and underpayments have serious consequences.

How To Reduce Negative Impacts

The most important way to avoid negative marks on your credit report is to pay on time and pay the correct amount.

If you get this information wrong, you will be left with a 2-year permanent mark against your credit history.

Because you may forget about the loan, and therefore forget about making the payments, we recommend setting up a direct debit. 

This way your bank will make the same payment on the same day every month, automatically. It’s a simple fix for a big problem.

The second way to reduce negative impacts is to only allow Soft Inquiries into your credit history until you are ready to settle with one lender. Soft Inquiries are usually free and quick.

They don’t look into the details of your credit history but can gauge enough information to give you an estimated interest rate.

Using that data, you can figure out the best deal on the market, and allow that lender to make a Hard Inquiry. With just one Hard Inquiry in process, your credit score will not dip dramatically.

Summary

So, does refinancing a car hurt your credit? The short answer is no, refinancing your car will not affect your credit score dramatically. You can expect a small dip at the beginning of the process, but the figure will return to normal after a month or two.

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What Increases Your Total Loan Balance?

What Increases Your Total Loan Balance

When you take out a loan, regardless of whether it is a government loan, a private loan, or a traditional loan, you will be subject to the accumulation of interest over a certain amount of time which is one of the factors that impact your total loan balance.

Many other things can impact this though, and it’s important to know what increases your total loan balance.

Paying less than the requested amount, making late payments, missing payments, deferment, having high credit card balances, having taxable income, having a high debt-to-income ratio, having a poor credit profile, and selecting an extended repayment period are some of the factors that can lead to an increase in the total loan balance. 

If you are considering taking out a loan, whether it be for your studies, your company or a home pool, you must have a fundamental understanding of loans and the process of repaying them.

This will allow you to reduce your outstanding loan balance to an amount that is within your means of repayment.

Here’s a more in-depth look at the many things that can affect your loan balance. 

Why Do My Loan Balances Keep Getting Higher?

In general, the balance on a loan could increase because of many reasons.

All borrowers would prefer to pay a minimal amount of interest on any loans they take out.

The amount of interest that a borrower is required to pay is determined not only by the rate the lending institution or the bank applies to the loan but also by the type of interest that is specified in the loan agreement.

Here are examples of some of the most typical causes that can lead to an increase in a loan’s outstanding balance:

Delayed Repayment 

One of the reasons why your loan balance keeps growing is because of delayed repayments.

Defaulted loans/ non-repayment of loans are typically met with repercussions from the lending institution, be it a bank or another lender. 

There are always significant penalties that harm your credit ratings if you take out a loan, fail to pay it back when it is due or make payments later than they should be.

You Have An Extended Payment Plan 

An extended contract will increase the outstanding balance of a loan.

Both selecting longer payback periods and selecting shorter ones come with their own set of benefits and drawbacks. 

With an extended payment plan, your monthly payments will be reduced to a more manageable amount over a longer time.

This means that the influence of the loan repayment won’t have any further effect on you.

Also, most debtors have access to a plan that allows for an extended payback period.

Given that an extended repayment plan is an option for all types of loans, this suggests that practically everybody could be eligible for such a plan.

The cumulative balance of the loan will go up if the repayment schedule is stretched out over a longer time.

If you opt for a longer payback period, you will pay more overall for the loan than if you opted for a shorter repayment period, as there will be more interest due overall. 

If you take out a loan for $1,000 to pay it back in just six months, for example, you will end up paying less overall than someone who has a repayment period of two years.

Most people, particularly those who are paid through an employer, would like to have a longer repayment period so they only pay a little amount each month.

This would allow them to have something reasonable left over after the loans have been withdrawn.

This is a benefit in the short term, but in the long run, you will end up paying more than you would have if you had opted for a shorter repayment period.

Making A Payment That’s Less Than What’s Requested

What Increases Your Total Loan Balance (1)

When you make a payment that’s less than the amount that is required, this results in a higher loan balance, which will reflect the total amount that you have repaid. 

If you’re supposed to pay an interest rate of 10%, but you only end up paying 5% on the first year in addition to the principal payments, then the 5% interest that you have not paid will be added to the principal amount of your loan. 

It’s extremely important to be aware of this when you make your repayments, and be sure that you pay the full amount that is due.

This will ensure that you don’t accrue any interest on the principal amount of your loan balance.

Missing Or Deferring Payments

Do not fall behind on your payments, as this is another example of what increases your total loan balance.

In the same way that delaying the repayment of your loan will increase the total amount that you will have to pay back, missing a payment, deferring (postponing the repayment), or simply not making a payment when it’s due will also affect the total amount of the loan that you will have to pay back.

Banks don’t like taking risks, and so if you miss a payment, you’re likely to get penalised, and if you have collateral security for the loan, you may end up losing the assets that you have tied as security for the loan.

When you miss/defer payment, the interest will keep rising, which also adds to the principal amount of your loan, depending on the type of loan, as that happens to most loan types.

This will affect your loan balance, and in the long run, your loan will become more expensive.

Summary of What Increases Your Total Loan Balance

These are just a few of the ways that your loan balance can increase. When you take out a loan, you need to carefully look at your financial plan to make sure that you’re able to make every payment on time. If you need some help, you might benefit from some advice from a financial planner, or increase you own financial literacy with some finance books or podcasts.

Timely payments are the best way to stop the interest building up which would cost you more in the long run. This also stops the lender from penalising you, which again will make those costs add up.

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How To Survive Financially As A Single Mum

How To Survive Financially As A Single Mum

Being a single mother is tough. You will likely have less emotional and financial support than you would if you had a partner.

As a result, you may begin to worry about how you will survive financially as a single mum.

As a single mum, you may be primarily responsible for the welfare of your child. Depending on their age, this may mean that they are unable to work.

Though this will mean that you get to spend quality time with your little one, it can leave you financially weak. Research has found that 300,000 single mothers in Australia are living below the poverty line.

The good news is that you aren’t destined to experience financial turmoil just because you’re a single mother.

If you’re a struggling single parent, here are some terrific tips that will make your financial situation less stressful!

How To Survive Financially As A Single Mum

1. Split Your Finances From Your Former Partner

When you were dating an ex-partner, you may have set up a joint account so that you could both access finances.

However, if you’ve split up from your partner, you may need to close this joint account. This is particularly true if you are not sharing joint responsibility for the financing of child care.

To achieve financial freedom, you should move your money to a separate account.

You can continue to use this joint account with the other parent of your child if they are willing to contribute towards child care.

2. Child Care Subsidy

In Australia, single mothers can apply for the Child Care Subsidy, which is a great help to survive financially as a single mum.

The Australian Government created this financial support scheme to aid families that are experiencing financial difficulty, including single parents.

Just bear in mind that there are certain stipulations that you must meet before you can get this subsidy.

For instance, you will have to be responsible for paying for child care, which must be provided through an approved service.

Moreover, the child must be under the age of 13 and they must not be attending secondary school.

Not to mention, your entitlement will depend on a range of different factors, including your income. Other important factors include the number of children that you have and their ages.

If you are interested in applying for the Australian Government’s Child Care Subsidy (CCS), be sure to visit the website.

To apply for this subsidy, you will need to fill in a simple form.

How To Survive Financially As A Single Mom

3. Adjust Your Mindset

There is a certain social stigma surrounding single mothers that can be quite harmful.

Many people assume that single mums are destined to a life of financial destitution. If you’re a single mother, this can be an unhealthy mindset.

You shouldn’t fear your financial situation. Instead, you should search for opportunities to improve it. Take control of your situation and improve your financially literacy with the help of some financial books or finance podcasts.

This is a much more proactive way of seeing yourself as a single mother and a key step to survive as a single mum.

4. Get Insurance

Insurance is an effective method that allows you to protect your family. Insurance lets you prepare for worst-case scenarios.

If these scenarios occur, you can be left in a financially difficult spot if you don’t have insurance.

In particular, single parents should consider applying for health and life insurance.

Many single mothers assume that insurance will be too costly, but you can easily find a plan that works for you!

5. Boost Your Income

Improving your income is easier said than done. Yet, the most simplistic method of improving your finances as a single mother is to increase your earnings.

Here are some of the ways to earn more money so that they can survive financially as a single mum:

  • Consider getting a second job: of course, this will make it difficult for you to find time to raise your children and so may not be appropriate for all mothers.
  • Increase your hours: likewise, this might not work for every mother due to time constraints. But if you’re working part-time, it may be worth working extra hours. In particular, you can work extra shifts while your children are in school.
  • Request a salary increase: it can be intimidating to ask your boss for a salary increase, but it can be worth it! This method will work particularly well for employees who have been on the job for a long time and have a good performance history.
  • Try a side hustle: single mums can make additional cash through side hustles. For instance, if you have a passion for crafting, you can sell your goods through online platforms, such as Etsy.
  • Sell second-hand items: though sites like Facebook Marketplace and eBay, you can make extra cash by selling second-hand items that you no longer use.
  • Look for a different job: if your current job isn’t paying enough, it may be worth looking for an alternative job with higher pay.

6. Parenting Payments

Our final tip is to look into Parenting Payments. This is another scheme devised by the Australian Government that is designed to help families pay for child care.

This scheme is only suitable for parents with children under a certain age. For couples, the child must be under the age of 6.

However, for single parents, the child must be under 8 years old for you to receive this aid.

Provided that you meet the criteria, such as being under a certain income limit, single mums can receive significant Parenting Payments from the government.

Frequently Asked Questions

What Do Single Mums Struggle With Most?

Aside from financial difficulty, depression and loneliness can be common among single mums. Ensuring that you have emotional support from friends and family helps you to overcome this.

Do Single Mums Struggle Financially?

Yes, research has found that a significant number of single mums struggle with finances.

Final Thoughts

If you’re a single mother who is struggling with finances, you should take solace in that you are not alone. Many other single mums are finding it difficult to care for their children whilst also earning a decent income.

We hope this guide has provided some ideas on how to survive financially as a single mum. As we highlight, there are lots of different options for improving your financial situation. As a result, you can focus on being the best mum that you can be!

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How To Prepare Financially For A Divorce

How To Prepare Financially For A Divorce

A marriage coming to a final end is never easy. There are so many things to think about when you and your partner separate, from housing to bills.

One of the most challenging parts of a divorce is separating your finances. It requires a lot of organising but you can take a few steps to prepare financially for a divorce.

In this article, we explain what you can do to get your finances sorted for your divorce.

Practical Ways To Prepare Financially For A Divorce

Separating your finances from the finances of your spouse can be a challenge but there are a few practical steps that you can take to get your financial status ready for your divorce.

Gather All Your Financial Information

First, you will need to have a good understanding of your current financial situation and financial position.

Gather any bills, paperwork and important financial documents that refer to you and your spouse.

It’s a good idea to make copies of these documents, so you and your partner can have access to them easily.

While the majority of financial documents may be online, such as your online bank account or on emails, you may also receive physical paperwork to your home address.

Gather all these documents and keep them in a safe place. You may also want to speak to a lawyer to find out what financial documents you need for the divorce.

It’s worth pointing out here that you shouldn’t hide any documents or assets that belong to you and/or your former spouse.

It’s a legal requirement to disclose all assets, including your financial position.

Organise Your Paperwork And Bills

There is a great variety of financial documents that you will need to gather and organise, including birth certificate, marriage certificate, all insurance policies, bank account statements, tax records, loan statements, mortgage statements, car registration and utility bills.

You will also need to keep your passport safe as well as any government benefits documents.

In addition to all the official documents, it’s also a good idea to make a note of any important dates, such as the date you separated.

This is important as you can only apply for a divorce in Australia when you and your partner have been separated for more than a year.

Your divorce lawyer will likely also ask you for a family profile which includes full names and contact details of your ex, your family and your employer.

Make sure that you have all these documents and notes stored safely. They should be accessible for you to hand over to your lawyer.

Update All Your Accounts

Once you have all your documents together, you know exactly what accounts need to be changed.

This could be your email account, bank accounts, mortgage, bills and any other accounts with your name.

You will need to cancel any overdraft facilities and close joint bank accounts. Update any super and ensure that any payouts go to your specified person.

If you have a lease or rental agreement, then make sure that you update these contracts.

How To Prepare Financially For A Divorce

Sort Out Your Mortgage

One of the biggest financial debts of married couples is the mortgage, which is one of the biggest things that couples need to sort out to prepare financially for a divorce.

Check with your partner how you want to handle any mortgage repayments until the property is either sold or settled.

You will then need to notify your mortgage lender and let them know that you have separated. Then, cancel the redraw and advise your bank of the cancellation.

If your name is not on your home, then it’s important that you speak to your lawyer about how you can protect your potential share of the property.

See A Lawyer And Get Support

One of the biggest mistakes that divorcees make is that they wait too long before they contact a lawyer.

It’s essential that you get legal advice as early as possible to ensure your finances are separated in the right way and you are as financially prepared for divorce as possible.

A good family lawyer with experience in divorce law does not just give you guidance on finances but he/she may also be able to provide advice on your entitlements and legal rights.

Your lawyer will ask you a variety of questions, including about your financial position.

He/she will be able to advise on alternatives to court proceedings and potential outcomes of your separation.

As there are a few time limits when it comes to handing in legal documents, it’s vital that you speak to a lawyer as soon as you decide to separate from your spouse.

Seek Support

Not only do lawyers provide financial support but you can also find more help when you contact your local authorities.

They will be able to give you more details on charities and other organisations that can give you advice before and after your divorce, and to help prepare your finances.

Create A Plan To Repay Any Debts

Once you understand your personal financial situation better, before and after the divorce, you will be able to create a financial plan.

This is a great idea if you want to pay any debt, such as credit card debt or pool financing. Or you want to save for a new car or house, or budget for a new apartment.

After you have organised your finances and finance documents, you may have to watch your money with some financial discipline.

Paying your debts off first before you start saving is the best option to prepare financially for divorce and to start a new financially independent life.

Learn To Live Within Your Means

Another aspect that’s often difficult before and after a divorce is the change of living standards, especially if you have to adjust to surviving financially as a single mum or parent.

A divorce always comes with lifestyle changes for you, your ex, any children and the rest of your family.

You may need to cut down on unnecessary expenses, such as subscription services, and match your lifestyle to your new financial situation.

Final Thoughts

A divorce is a difficult time for everyone involved but you can already get yourself organised before the official divorce proceedings by following the steps above for how to prepare financially for a divorce.

This can help you separate from your partner financially and you can also start building your new life with your own money and new financial goals.

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Best Finance Podcasts in Australia

Best Finance Podcasts Australia (1)

Forget watching videos or reading a book, podcasts are the new and best way to learn new skills, and for very good reason.

In our ever-busy lives, who has time to read an entire book on a particular topic, or watch a whole video series on it?

With podcasts, you can listen and learn as you’re doing other boring tasks, like driving or doing the dishes.

One of the best things about podcasts though is the variety.

No matter what topic or subject you’re interested in, at least one person, but probably many more, has made a podcast about it.

Financial podcasts are becoming super popular these days, as everyone seems to be struggling a bit when it comes to managing their money.

There’s now loads of content available to pick from when it comes to expanding your financial knowledge and improving your financial situation.

Because there’s so much content to choose from, and a lot of it seems to be targeted at a US audience, for anyone outside this area (hello Aussies!) finding the right info can be tough.

That’s why we’ve made this list of the top 19 very best finance podcasts in Australia for you to try out.

These podcasts can teach you vital lessons on budgeting, investing, property, shares, superannuation, tax, and a variety of other topics related to personal finance.

Finance podcasts are like having a financial guide in the palm of your hand since they cover a wide range of topics, from assisting novices through the process of budgeting for an apartment or financing a pool, to providing professional tips and tricks for conquering the stock market.

Whether you’re just starting out with budgeting or are trying to build your investment portfolio, these are the very best podcasts to get started with.

The 19 Best Finance Podcasts in Australia

  1. The Australian Finance Podcast 

Each episode of the Australian Finance Podcast serves as your personal guide to putting your financial situation in order.

Your hosts, Owen and Kate, will provide you with knowledge and techniques that are immediately applicable to your situation and that you can put into action now.

The hosts give a crash course approach to “sorting out your finances”, and explain everything in a simple and easy way so you can quickly apply their advice to your own life.

  1. The Australian Investors Podcast 

Owen Raszkiewicz, the founder of the Rask Group, and the host of the podcast above is also the host of this financial podcast.

In every episode, Owen interviews a different expert in finance and investments.

The guests discuss their perspectives on the market and offer advice to any would-be investor listening.

What’s great about this podcast is that the guests not only discuss their investment expertise but also their personal tales, primarily focusing on how they got started in the industry.

This is one of the aspects that we really enjoy about the show, as this creates a conversation that is not only entertaining but also has multiple layers and helps you to better understand and apply their financial advice. 

  1. My Millennial Money

Glen James, the founder of sortyourmoneyout.com, is the host of the podcast My Millennial Money.

John Pidgeon, an expert in real estate investment, periodically joins James as a co-host for the show.

In each episode, the hosts cover a new topic connected to personal finance, money thinking, or conversations with industry experts and average Australians.

These topics and interviews vary from week to episode.

Personal finance is discussed in a humorous way from the point of view of the millennial hosts.

The podcast features a wide range of speakers discussing current events and provides an even mix of informative financial advice and lighthearted conversation.

What we appreciate most about this finance podcast is that it’s hosted in the format of an open-ended conversation around a table, and the hosts’ goals are to educate, inspire, and, with any luck, entertain you as they share their financial advice.

  1. She’s On The Money 

This popular financial podcast is hosted by Victoria Devine, a millennial money expert and financial adviser, who loves having conversations about money that are approachable, enjoyable, and simple to comprehend.

It’s like having a martini with a very financially stable girlfriend.

The goal of this podcast as Victoria says is to “take the fear out of finance” so that you can gain the confidence you need to make the very best decisions about your financial future.

She’s On The Money has become one of the most popular and best finance podcasts in Australia.

The program covers general investing, but it also delves into other aspects of personal finance, such as creating a budget and understanding the various health insurance options many Aussies struggle to understand.

One of the best parts of this podcast is that it’s by women, for women (although of course, anyone can listen!).

Almost all financial advisors are men, and their tips are geared mainly towards men in finance.

She’s On The Money is helping an entire generation of women become more financially knowledgeable and makes investing and finance, in general, less daunting.

  1. Motley Fool Money

Scott Phillips is joined by Andrew Pag to provide commentary on the Australian stock market, including a discussion of recent market events and an analysis of individual stocks. 

This podcast tries to inform you of what is “actually going on” and what you need to be aware of so you know exactly what you have to do to protect your finances. 

  1. The Property Couch 

When it comes to learning anything and everything related to real estate investing in Australia, Bryce Holdaway and Ben Kingsley are there to help, and they do it in a very informal way making it all very easy to understand.

This podcast provides an insider’s guide to real estate investing, as well as finance and money management.

It offers advice on everything from how to win at auctions to how to select the investment strategy that will work best for you.

  1. How To Money 

The How to Money podcast hosted by Kate Campbell takes listeners on a journey through their financial education, covering topics such as first jobs, superannuation, and credit cards. 

This podcast is helpful for people who have a hard time remembering what school taught us about money, and also gives new helpful tips and tricks to managing your finances. 

  1. The Money Puzzle 

James Kirby, the Wealth Editor for The Australian, and other business and finance professionals discuss a variety of topics, including banking, investment, property, trade, politics, and more.

This podcast will help you make sense of the complex world of finance and have a better understanding of news that investors should be paying attention to.

Alan Kohler, the Editor-in-Chief of the Eureka Report, records a weekly conversation with his co-hosts Stephen Mayne and James Thomson (both of whom are finance journalists), as well as the odd special guest, in which they discuss the most recent events in the world of finance.

This is a great financial podcast as not only will listeners receive a healthy dosage of financial news and insightful insights, but there is also a substantial amount of other content such as general news that everyone should know about.

Best Finance Podcasts Australia

  1. Equity Mates Investing Podcast

Alex Renehan and Bryce Leske examine the fundamentals of playing the market in the Equity Mates Investing podcast.

Topics include everything from initial public offerings (IPOs) to exchange-traded funds (ETFs) to risk management and investment techniques.

Hosts Bryce and Alec, both of whom have a keen interest in the financial markets, offer an approach to the topic of investing that’s both approachable and enjoyable, keeping it light to make sure you don’t get bored halfway through. 

This is an excellent podcast for people who are just starting out in the investment world since the presenters do a good job of simplifying many difficult and daunting ideas.

  1. Property Investment, Success & Money – Michael Yardney 

Michael Yardney, one of the most respected property critics in Australia, sits down with industry leaders to explore how to achieve greater levels of success in the realms of property and finance.

Yardney is committed to helping you “multiply your wealth” by talking about a variety of topics, including property investment and financial news.

If you’re looking to have more success in property, or if you’re looking to get a better handle on your personal finances, and especially if you’re keen to better understand the mindset and habits of rich and successful people, then listen to Michael Yardney.

He and the other experts will discuss how rich and successful people think and work so you can apply those same ideals to your life. 

While the primary topic of discussion in this podcast is investing in real estate; other aspects of building money and achieving success are also talked about in-depth. 

This podcast is released twice a week and provides an in-depth look into all aspects of the real estate industry in Australia.

Yardney is widely regarded as an authority on the subject of investment properties as a result of his nearly ten years of experience writing about them. 

This podcast is one of the best as it investigates the most in-depth questions and intricate scenarios about the topic of property investment.

  1. My Millennial Money Medical

While the Australian healthcare system is miles ahead of many other countries, understanding health insurance plans and how these fit into your overall finances can be a struggle.

That’s why the hosts of the My Millenial Money have made this side podcast to talk all about this topic in-depth.

This podcast (previously known as Dev Raga Personal Finance) simplifies complex financial concepts and unpacks all aspects of personal finance for busy healthcare professionals.

My Millennial Money Medical is made by SYMO interactive, the same company that is responsible for the very popular my millennial money broadcast and is hosted by Melbourne-based doctor Dev Raga.

  1. The Wealth Collective 

The topic of discussion on Pekada’s podcast, The Wealth Collective, is how to simplify financial matters.

Investing and personal finance are topics that will be discussed on this financial podcast, which is hosted by Zac Masters and Pete Pennicott, both of whom are financial advisers. 

Through this podcast, you can expect to learn valuable insights, tips, and perspectives from industry professionals while also enjoying some good laughs along the way.

  1. Finance And Fury 

Finance and Fury pick up where your official education left off, bringing a unique perspective into the realm of economics, personal finance, and growing wealth with three separate episodes each week.

In the episodes that air on Mondays, the hosts take a straight look at personal finance so that you can begin the week with the ability to act independently and make your own decisions regarding your finances, rather than simply following the crowd.

  1. Shares For Beginners 

In this podcast, host Phil Muscatello talks to people that are already successful in the financial sector so that you can learn what to do, what questions to ask, and hopefully how to avoid losing money. 

Phil Muscatello is in the same boat as you; he wants to profit from the stock market, but he finds the terminology to be difficult to understand.

Like you, he wants to be able to make judgments based on accurate information. Because of this, the goal of this podcast is to educate ourselves together on the basics of Shares for Beginners.

The best part of this podcast is that it’s exactly what its name implies; that is, it is designed for people who are just starting out in the stock market.

It simplifies difficult concepts and themes about investments and presents them in a way that even someone who has never done anything related to investing should be able to understand.

  1. Aussie Firebug

This podcast, which is hosted by a person who only goes by the alias “Firebug,” has a significant emphasis on achieving financial independence, which is accumulating enough money from your investments to basically eliminate the need to work. 

Each edition of the podcast features a new conversation with an individual who has already achieved or is on their path to achieving financial independence.

What we enjoy about this pick of our best financial podcasts is that it gives us a new viewpoint when it comes to finances and makes it more interesting by allowing regular individuals to share their stories on how they become financially independent.

  1. The Richards Report

During the time when host Ted Richards was serving as the Director of Business Development at the investment services company Six Park, he started this podcast in which he discussed the fundamentals of investing.

Even though Ted no longer works at the company and so no new episodes have been released for a while, there is still some useful stuff that can be accessed and listened to on the website.

What we enjoy about it is that Richards was able to conduct interviews with a number of really intriguing people, such as former Australian Football League captain Chris Judd and former Finance Minister Lindsay Tanner.

These people give their unique insights on how they handle their own finances, and how you can become financially stable. 

  1. Your Wealth

This podcast is hosted by Gemma Dale of NAB, and the topics covered include methods and suggestions for accumulating wealth, with a primary focus on investing.

What we appreciate about this podcast is that Dale discusses a new topic every week.

These topics range from the various tools and investment instruments available to discuss the impact that technology has had on investing internationally.

No matter what part of investing you’re interested in or what to learn more about, we almost guarantee that Gemma has done an episode on it. 

  1. ABC’s The Money

Looking for a comprehensive overview of the Australian economy and how it fits into the bigger picture of the world economy?

This is an excellent podcast to start with. 

This broadcast is a superb weekly release that deserves a download or two from every Australian citizen because it debunks economic myths and reports on a wide range of topics, including poverty, import and export, and even population patterns.

  1. The Pineapple Project

Even if the show now covers topics other than financial matters, the first season is still excellent and should not be missed, which is why it’s made it onto our list of the best finance podcasts in Australia

Claire Hooper, the hilarious host of this show, guides you through the dangerous waters of managing your money, from getting out of debt to purchasing your first house and even discussing the relationship between money and relationships. 

The Pineapple Project is a documentary series that is produced by ABC; so, if you are a lover of high-quality reporting and storytelling, you should give this one a try.

Wrapping up

If you’re looking to improve your financial literacy and make smarter decisions about money, then finance podcasts are a great place to start. 

With so many great options out there for Australians, finding the right one can be daunting. That’s why we’ve put together this list of top 19 very best finance podcasts in Australia that cover a wide range of topics from budgeting to investing, superannuation to tax. 

Whether you’re just starting out or an experienced investor these are some of the best financial podcasts available. So grab some headphones and tune into any one (or all) of these fantastic resources – it could really pay off!

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How To Finance A Pool

How To Finance A Pool (1)

Some people in Australia will be able to finance their inground swimming pool with their own savings.

However, most Australians will have to look at other means of financing that substantial purchase, and there are options available.

These can include secured loans, unsecured ones, and Handypay. It is worth noting that an inground swimming pool should increase the value of your home so read on to find out how to finance a pool.

Secured Loans

If you want to use the value of your home to effectively secure a loan then use it as collateral in a secured loan.

That does mean that should you default on that loan, the bank can claim the rights to your home to retrieve their money.

Despite this important factor, a secured loan is the most common and popular option to finance an inground swimming pool as it means homeowners can borrow against their home’s equity.

It is also worth noting that secured loans should have a lower interest rate while the payments are typically spread over a longer period of time as opposed to other types of loans.

Unsecured Loans

Unlike a secured loan, an unsecured one is not attached to collateral like your home which may be a relief.

In fact, unsecured loans are increasingly risky for a lending institution like a bank as the interest rates are comparatively higher with payment terms reduced to a shorter period of time.

You may find out that the majority of lending institutions will refuse to lend out over $30,000 in the form of an unsecured loan though you may find one that will go up to $40,000.

Qualifying For Loans

To find out if you qualify for a loan to finance your inground swimming pool, work out the most up-to-date equity in your home.

That should tell you how much you have available for a secured loan and you can contact a lending institution with that sum in mind.

In turn, the lending institution should have a good idea of the programs and rates that they can offer too.

For an unsecured loan, do your research on those lending institutions that offer them to see if the amount they offer can cover the project.

How To Finance A Pool

Handypay

Various inground swimming pool builders use Handypay as their way of providing swimming pool finance.

Handypay offers a relatively straightforward payment plan which is tailored to your swimming pool project.

Their mantra is ‘swim now, pay later’ which sounds inviting enough so start by selecting what type of pool you want.

Apply to Handypay for their buy now and pay later option then you should be approved swiftly and the vendor will be paid the upfront cost of your swimming pool purchase.

One of the useful elements of using Handypay is how the repayments for your swimming pool will be scheduled conveniently in line with whatever your income is.

They offer a range of flexible payment plans from as little as $2,001 to as much as $75,000 over a period of one to seven years.

Even their repayment options are flexible as they can be weekly, fortnightly, or even monthly. There are some requirements which you would expect from any lending institution.

Applicants simply must be over 18 years of age, be an Australian Citizen or Permanent Resident, must receive an employment income, and the swimming pool has to be for consumer use only.

What may prove reassuring is that Handypay is proudly associated with the Australian Swimming Pool and Spa Association, as well as Master Builders in Queensland and New South Wales.

Handypay also offers a lifetime structural warranty on all of their inground swimming pools so all you need to do is find your local pool builder to get started.

How A Pool Can Increase The Value Of Your Home

However you decide to finance your pool, remember that it should add value to your property. That’s an important factor to consider as most lending institutions will bear that in mind when they are calculating the loan.

If you do decide to sell your home in a few years time, then having an inground swimming pool should help your home’s marketability.

Make sure that your swimming pool is in good condition as one that has seen better days may actually reduce your home’s value.

Final Thoughts on How to Finance a Pool

Before you decide on how to finance a swimming pool, check out your local area to see if you truly need one.

If your local council has a community pool, or has plans to build one, then your own swimming pool may not be as valuable in the future as you imagine.

Sure, having the privacy of a swimming pool in your own backyard is a great thing to have, prospective homebuyers may prefer that space for something else in their backyard.

However, if there is not a pool for miles then deciding to finance and build an inground swimming pool could prove to be a sound investment in the value of your home.

Frequently Asked Questions

How Difficult Is It To Finance An Inground Swimming Pool?

Financing an inground swimming pool should not be more difficult than any type of home improvement project.

You should start by working out the current equity of your home and then work on your own credit score. 

Lending institutions prefer borrowers who have excellent credit and they can borrow at lower interest rates.

You can even improve your credit score by ensuring that your debt payments are on time and you are paying down all of your balances responsibly.

If you feel overwhelmed with how to go about budgeting for or how to finance a pool, than it might be worth working with a financial planner to help you out.

How Much Work Goes Into Maintaining An Inground Swimming Pool?

You may only use your inground swimming pool once or twice a year during summer or the holidays.

However much you use it, you should be putting an effort in each day to look after it.

That could be something simple like emptying the filters or skimming out leaves, and debris but there are other, more meaningful, and time-consuming ways to maintain your pool.

That includes testing the pH level in the water as well as covering it with a sheet, opening, and closing it too.

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How To Budget For An Apartment

How To Budget For An Apartment

It can be difficult to come up with a budget for an apartment, particularly if you’re not experienced with handling your money.

Whether you’re moving into your first place, saving after your first full-time position, or moving after a divorce, it can be a lot thinking about all of the things you will be spending on.

Fortunately, there are steps you can take to budget for your apartment, which are very simple to do!

We’ll cover how to budget for an apartment in this post, including some basic categories you’ll need to consider and how to make a budget worksheet.

Budgeting For Your Apartment

Many individuals try not to think about budgeting, as it can weigh a lot on the mind. (Although, if you’re looking to increase your financial literacy, these books are great resources.)

However, laying out some simple expense categories can help make budgeting easier, even if you’re not that great at maths!

One of the easiest budgeting methods is to produce a worksheet, either online or in a notebook, depending on your preferences.

You’ll be noting down every dollar you spend in this template for one whole month.

The spreadsheet should consist of three columns: the date, expense, and amount that was spent.

Once the month is up, go through the list and separate the expenses into the seven groups below, then calculate the total money spent in every category.

These categories are:

  • Rent: You may pay rent at present, but this might be much less than your desired apartment.
  • Services: These are monthly essentials, like electricity, internet, gas, and cell phone bill
  • Monthly costs: Expenses per month, like gasoline, health insurance, car insurance, or bus fare
  • Loans/Debt: Debt or loans, like student loans, credit cards or car payments
  • Savings: Anything you put into a savings account, like annual expenses, moving costs, car registration fees, etc.
  • Entertainment and social fun: Make sure you set money aside for fun and social activities
  • Food: It’s a good idea to separate home dining and eating out costs.

Making An Apartment Budget Spreadsheet

After you’ve made a spreadsheet with your current expenses, you’ll need to make another one with your projected expenses after you’ve rented an apartment.

You can then look at any budget adjustments required after you’ve moved into a new place.

Align your anticipated budget spreadsheet next to your current one, then go over each category to find any spending regions that need changing.

  • Rent: It’s best to avoid rent which goes over 35% of your take-home income.
  • Services: Your rental contract may need you to pay other utilities, like water or electricity.
  • Monthly costs: Make sure you buy renters insurance along with any other monthly costs.
  • Loans/Debt: As above.
  • Savings: As above.
  • Entertainment and social fun: As above.
  • Food: As above.

You can track your possible expenses with an easier method. Simply create a three-column chart with the categories: necessities, wants, and savings.

Half of your spending costs should be spent on necessities, which cover essentials like rent and utilities.

30% should be spent on wants, which cover features like travel, while the remaining 20% should go into your savings.

Calculating Moving Expenses

How To Budget For An Apartment (1)

A large component of budgeting for an apartment will also go into several one-time fees.

It’s essential to financially prepare for these costs before you move, as this will avoid any extra money worries.

Application Fees

Many landlords charge non-refundable application fees to recognize serious applicants.

Application fees are around $100, so make sure you factor this into your moving expenses.

Security Down Payments

Security deposits are usually around a month’s rent, though your landlord may require your last and first month’s rent.

If there aren’t any damages when you move from the apartment, you should receive your security deposit back.

You can find the conditions for your security deposit in your lease.

Moving Vehicles

If you have lots of large furnishings, or are moving a great distance away, you might need to pay for a moving truck.

Movers

Similarly, if you have lots of heavy fittings or are traveling across the country, you might need to employ movers that can help you move.

Bear in mind that if you’re moving to a place within the same location, you can reduce the moving costs by asking family and friends to help you move.

Budgeting For Apartment Furnishings

You’ll need to consider the cost of furnishings after you’ve chosen your new apartment.

New, unfurnished places will require lots of items, but the cost of these can increase rapidly.

Other than furniture, you’ll need to consider linens, cookware, dishes, and home decor to make your apartment your own.

If you’re on a lower budget, you can reduce the cost of these by opting for used furniture and looking in resale stores.

Friends and family may have additional items which they don’t need anymore, which can be especially helpful if you are a single parent.

You can also opt for a furnished apartment if you don’t want to pay for furnishing expenses.

Saving For An Apartment Tips

Make sure you go over your present monthly expenses. After you move, a large amount of your take-home income will be spent on rent. Think about what are the largest expenses that you spend today, as well as how you can change these expenses.

A great way to save for your new apartment is to act as though you’re currently paying rent.

Place this money into a different savings account, so you aren’t tempted to take the money from your debit card.

If you do this successfully for three months, you’ll have saved a month’s security down payments and a lot of your moving expenses.

You’ll also have become adjusted to living on a budget, so it won’t be much of a shock to move into a new place.

If your budget is still too tight after taking all of these steps, think about getting a roommate to share the expenses.

Final Thoughts on How to Budget for an Apartment

Budgeting for a new apartment can seem difficult, but it’s an important skill that can help you avoid financial problems in the future.

Thinking about your current expenses, projected expenses, moving costs, and furnishing costs can help you navigate the real estate world. We hope that this article has given you some great tips on how to budget for an apartment.

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