First Home Owners Super Saver Scheme

Because the thought of trying to save up for your first home is daunting.

So often these days we see kids heading off to study at University, which is GREAT! However….. it means that they are living at home longer as it puts off their ability to work full time, from anywhere between 3 to 10 years.

So how hard is it for our kids to save to buy their first house?

(and yes, all of those $4.50 coffees and smashed avo brunches probably aren’t helping them get into their own home any sooner [shout out to the $10 ‘Retirement Plan’ smashed avo dish!] , but can we all agree, how good do they taste! Well that and I don’t know how you expect anybody to live in Melbourne and NOT drink coffee)

So the government has decided to lend them a helping hand to reduce pressure on housing affordability, in their usual over complicated and maximum effort sort of way.

They have introduced the First Home Super Saver Scheme (let’s call it FHSSS because that is a mouthful and a half)

This scheme now allows people to save for their first home through their Superannuation funds.

Why is this a good thing?

Because it will help first home buyers save faster with the concessional tax treatment of super.

So now you are looking at getting an interest rate of around 7-8%, as opposed to the current 1.5% cash rate (aka. Rate of interest).

You can make contributions at any stage, however can only apply for its release once (and you have to be at least 18). There is also a cap of $30,000 on the voluntary contributions that you can withdraw under this scheme, (but you also get to withdraw all of the interest that comes with it – Cha-Ching!).

It’s a good start to helping our kids get into their own home (and out of ours) faster!

The median house price in Melbourne it currently sitting at somewhere around $900,000.

Now if they were looking at a house valued around $700,000, their 20% deposit is sitting around $140,000 (or 8,000 smashed avos).

And whilst this is a big number, there’s a few things out there to help them achieve it.

We want to teach our kids healthy financial habits, and help them to make one of the biggest investments of their life.

 

 

If you’re a little intrigued (or a little confused) about how it all works, give us a call and we’ll be more than happy to talk about it with you, and have a look at the best steps for implementing an effective savings scheme.

 

 

What Credit Cards do you need?

As children we are forever warned off of using credit cards. Why? Because of the astronomical interest rates where we get sucked into the habit of just spending and spending and spending, however it’s when we start spending money we don’t have do we fall down the rabbit hole.

 

 

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Well here’s the key:

X2 American Express cards

&

X2 Visa/MasterCard cards.

 

 

 

 

 

 

 

 

Why do I need so many cards you ask? Well. Let me explain.

You need two cards (well two of EACH type really).

One for everyday transactions, and one for direct debit accounts.

This means that your direct debit accounts are consistent and function by themselves. If you don’t use these cards for anything except for the purpose of paying bills, rates, etc then there’s a much less likely chance that they will need to be cancelled.

On the other hand your everyday transaction card is used for just that. It will follow you around on your daily routine and be used for any online purchases.

So the bonus of having your cards structured this way?

If you lose your everyday transaction card or it gets hacked you don’t have to cancel and re-fill out all of your information for your direct debit accounts again.

Now why you have two American Express and two Visa/MasterCard cards is because American Express is often very generous with their rewards schemes, so it’s best to use them when you can as you will most likely get more back for your purchases. On the other hand a lot of retailers don’t accept American Express as they have to pay a higher transaction fee to allow you to use it, and you don’t want to be stuck without a card do you?

So by having two of each it allows you to have security, flexibility and benefit from the reward schemes that all of the credit cards offer.

 

And don’t forget to renew them every two years. A little bit of hassle will leave you with a lot of reward.
Not only are more cards often introduced with other benefits and fees, but by changing credit cards you can often encounter other specials and offers such as no fees for the first 6-12 months or a sign up bonus of points.

 

Research!

Also do your research and find out just what your credit card will allow you to do, and just what you can use your points on. Some credit cards allow you to pay certain things with your points.
This can include ATO fees and some insurances.

 

Determine your spending pattern, and what is going to be most advantageous to you.

There are so many options for credit cards, all with differentiating fees, benefits and limits. Comparison is a necessity when weighing up which credit card to go with, and remember, just because you sign up with them does not mean you have to stay with them for eternity!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Why do you need a credit card for your business?

A credit card can be very beneficial, especially to those of you who run a business. Credit cards often offer flexibility and offer numerous incentives and rewards for using their services.

This can often be what entices people in to begin with. The promise of extra cash, of overseas trips, of no interest. But there is no such thing as free money, everything comes at a cost.

 

So here’s your ToDo list:

  1. Establish how much money your income provides you with.
  2. Establish your budget. Just how much do you spend weekly?
  3. Establish what kind of benefits you want to receive.

 

 

 

 

 

 

 

 

Your Need ‘ToDo’ list:

  • Have an accessible account to withdraw from.
  • Have sufficient funds to repay your credit card balance
  • Don’t miss deadlines
  • Don’t over spend or spend outside of your means.

Why is it beneficial for a business?

Credit cards keep and track all transactions. Come tax time this is going to be your best friend! See just what you spent money on and where, and check it off your deductibles list!

And here are what credit cards are good for:

– Track records for your bookkeeper.

  • Your bookkeeper will be LOVINGGGGG you! No more chasing up receipts for this or that, they’re all in one spot.

They’re safe.

  • They are hard to hack and often it’s easier to get your money back from the bank.

They provide insurance.

  • Different credit cards may offer a variety of different insurance types to protect you.

Now lets find your credit card

Comparison websites have just become your new best friend.

They allow you to filter the cards by rewards and type of reward, annual fee and interest rate. This helps to you to determine what your priority is and what you most want to get out of your card, and find the card that best works for you!

 

 

 

 

 

 

Now a credit card can often be beneficial for a business owner? Why? Because your expenditure is usually taken out from your income. The expenditure has to be less in order to run a successful business. This means that you can reliably pay off your credit balance, and henceforth not pay the high interest rates whilst reaping the rewards that a credit card has to offer, for one annual fee.

The bonus to having a credit card as a business owner?

Every time you renew your cards you will granted more rewards points or discounted fees. So yes, there’s that round the world trip in Business Class for you, flights completely covered. When people look at frequent flyer points, the number rarely equates to a financial figure to a lot of people. But I tell you, pay attention, because they can add up, and be worth thousands of dollars. And all this for buying things for your business that you already would!