Melinda Arko

TIPS TO AVOID A DEBT HANGOVER THIS CHRISTMAS!

Christmas is fast-approaching with only 6 weeks to go and it is one of those times of year that we normally throw caution to the wind, and just blow our budget regardless of the consequences.

 The Christmas New Year period means increasing spending for many of us.  We often get caught up in the spirit of Christmas spending on gifts, holidays and food. More often than not Australian’s turn to their credit cards as a means of meeting these extra costs!

 

Unsettling facts from the Australian Bureau of Statistics show that over 14 million Australians are paying off over $40 billion in credit card debt and in 2008, spent $36.95 billion dollars during the Christmas season at retail stores with two in ten relying solely on credit for their Christmas Spending. One in five Australians are still paying for last year's Christmas only six weeks before this festive season, and by Christmas day almost 17% will not have totally cleared last year's debt.  Consider this for every $1000 spent on a credit card paying the minimum payments will take you 5 years to pay off.

The biggest tip is to put the credit card away for a rainy day and celebrate Christmas without dragging home a sack load of debt disguised as presents. Remember that spending less at Christmas doesn’t mean you have less fun.

Here are some tips to help you get through the Christmas New Year season without a debt hangover!

• Start Saving Early
• • Open a Christmas savings account. 
  • If you committed to saving just $20 per week of 50 weeks you will have saved $1000.

• Budget for Christmas early
• • Create a budget.
  • List all the people you need to buy gifts for and write down a specific amount for each person.
  • When shopping for each person stick to your allocated budget.

• Start Shopping Early
• • Consider shopping throughout the year. The closer it gets to Christmas the more expensive items can get.
  • When shopping leave your credit card at home.
  • Make a list of what you will need for your food menus.
  • Withdraw enough cash as per your budget to complete your shopping.
  • Take advantage of lay-by.
  • Start buying extra bottled and tin foods now. Prices increase the closer Christmas gets.

• Be Creative with your Gift Giving
• • Try and make a few personalised gifts yourself.
  • The internet is full of creative ideas.Homemade cooking makes for a great gift.

•  For Large Families, draw a name from a hat
• • This will reduce the number of gifts you need to purchase.

• Shop online
• • You can find some great bargains shopping online but ensure that you are using secure sites and keep a copy of your transactions.

Don’t fall into the debt trap over Christmas!

Christmas is about spending time with family and friends remember spending less at Christmas doesn’t mean that you will have less fun!

Sticking to your planned budget will ensure that you place yourself in a great position to start 2010.

Download Tips to avoiding a debt hangover at Christmas 2009

Julie and Julia

I went to see Julie and Julia the movie today. It really was a great movie. I have always been a fan of Julia Child and have her cookbook "Mastering the Art of French Cooking" and her biography. Those of you who know me one of my passions is cooking I just love creating food for friends and family to enjoy and share. Cooking is also an escape for me from the hustle and bustle of the busy day!

What was interesting to me about this movie was the purpose behind the project Julie embarked upon. It was an interesting way for her to express herself and was quite a challenge. During the movie we were informed that Julia Child did not meet with Julie and did not endorse what she was doing. This is what intreged me, why was this becasue Julia Child loved food and loved imparting her passion to other people. I starting to dig and read Julie's blog when it struck me between the eyes that the blog was not necessarily about the food and the impact the food was having on her nor was it about the journey or the challenge of cooking the food but merely a personal challenge and was very Julie centred with her own agenda. Julie did not really stand for what Julia represented - a passionate woman who adored food and hence the two collided. It would appear that Juila did not agree with the purpose and intent and therefore was not going to endorse the project.

Having said that the movie really did show off the real Julia Child that we all adore through her cook books and well you really can not blame Julie for doing the project for her own future gain. She always wanted to be a writer and because of the project this became a reality. She was a women who challenged herself through cooking to break through some obsticales she was having and you can't blame her for that.

One final thing that struck me about this movie was the loyal support both ladies received from their husbands. During all failures and triumphs they stood by their partners in the pursuit of their dreams - so refreshing to see.

Good on you Julie for challenging yourself to be yourself on the path to achieving your dreams.

Julia you have touched the hearts of so many foodies we will alwasy adore you and your passion lives on in so many of us home cooks.

It is a movie worth seeing and if you have not cooked a Julia Child recipe yet - get the book and try a few!

Are we going mad!

A recent article published in CNNMoney.com caught my attention. It is titled "My 12 year old got a credit card offer". As the title implies a 12 year old girl in the US received a credit card offer from one of the banks. While it would be impossible for this 12 year old to actually apply for the credit card because of her age the fact that she got the offer in the first place and the source of where her name came from is very interesting.

I believe that banks really do need to be accountable for those letters of offer or limit increases that we get regularly in the mail as this marketing strategy is one reason why so many Australians are suffering from credit card debt - it is way too easy to get a credit card!

But now with the advent of internet marketing young kids who get excited about the potential of winning a free iPhone find themselves clicking on pop up marketing adds online to enter the draw and they also find themselves listed on multiple databases for large coroporations and financial institutions to use.

As a parent it has made me more aware of teaching my son the importance of being responsible while they are online and also being responsible with their money and finances. If parents are not proactive in this area they will find that events such as mentioned in this artcicle will occur more and more.

Some of my younger clients now find themselves in credit card debt because they were cleverly marketed to by financial institutions and they felt it would be a good way to get a credit rating. I am often asked  "how do I improve my credit rating or even get a credit rating?"

Here are some ways to get a good credit history without the need for a credit card:

• Pay all your bills on time
• If you are renting a house pay on time
• Open savings accounts and maintain your accounts properly
• Do not overdraw on any of your bank accounts
• Pay your mobile bill on time
• mobile internet access as long as you pay your bills on time

There is a common thread - pay bills on time - is the key to getting and protecting your credit history.

I will have more a credit history in up coming posts.

Read the full article at CNNMoney.com

Fevola a LION!

Well it is now official that Fevola will now be a Brisbane Lion! Those of you who know me would know that I am a huge Lions fan and the news of Fevola coming to Brisbane was not that well received! I am not a big fan of his but I have to give him credit - he is a great forward.

I was not impressed when the news came that Brandshaw was going to be the potential trade - Braddy is such a great player and I am so glad he is staying.

Now lets think about the new look Lions forward line - Brown, Bradshaw and Fevola - wow this would be the envy of the league - what an awesome forward line.

Lets hope Fevola keeps his off ground antics in check!

Go the mightly Lions!

First Home Owners Update

This is just a quick reminder for those seeking to get the full First Home Owners Bonus Grant that after September, those entering the market will only be eligible for half the boost until the end of the year.

First-home owners entering contracts between July 1 and September 30 will continue to receive the boost and will get a total of $14,000 when they buy established homes and $21,000 for new homes.

The boost will halve for those entering into new contracts from October 1 until December 31, with those buying established homes receiving a total of $10,500 and $14,000 for new homes.

So if you are wanting to take advantage of the Grant call us now 1300 771 358 or email enquiries@respinsiblelenders.net.au

Are You Financially Unfit?

Have you ever been on a fitness and diet program where for a couple of weeks you are highly motivate and it goes brilliantly but then slowly those old habits start to creep in again and you often give up on the program?

Well managing your cash flow is not all that different from being on a diet and exercise program! We start off motivated but often end up giving up.

Budgets often fail because like a diet we don’t like being deprived of the things we love and we often have unrealistic goals and projections on what we want to achieve. It is important to set realistic goals and control the amount we spend instead of getting rid of that expense completely! If you love shopping and you eliminated this expense from you budget it is destined to fail.

Financially Fit Shopping Tips:

• Write a List!

Look in your wardrobe and work out what you need rather than want!

• Set a Spending Limit

Set yourself a spending limit and stick to it.

• No Credit Cards!

If you have allowed $150 as your spending limit then take that in cash and leave your credit cards at home. This will stop impulse buying!

• Stick to the List

Take the list with you and remember to stick to it. Only buy what you need.

• Take a shopping buddy

Show your friend your list and ask them to keep you accountable to the list.

• Buy your clothes at the right time

Know when the sales are on and go shopping then. For example August is a great time to buy all your winter clothes for next year because all the winter sales are on.

• Know what looks good on you and buy items you can mix and match

• Shop at Fashion Warehouses and Outlets Shops

Shopping at the outlets can do two positive things for you. One, you can save money and two; you can buy a lot of things for the price of one regular store item.

• Become a member of store databases

This will ensure you receive information from your favourite stores regarding specials they are running.

• Shop Online

Shopping online can result in large discounts but you need to ensure that the store has a liberal returns policy in case you don’t like the item or it doesn’t fit.

• Exchange with Friends and Family Members

Great Websites to Visit:

http://www.dealsdirect.com.au - great online shopping site that features all kinds of products.

www.myshopping.com.au – Helps you to compare the prices of items online.

www.closeddoorsales.com.au - Lists retail days for a range of wholesalers.

www.strawberrynet.com – Great site for perfume, cosmetics and skincare items.

www.clothingexchange.com.au  - Organises monthly My Sister’s Wardrobe frock swaps.

www.missyconfidential.com.au – Tells you when the Fashion Warehouse sales are on.

Cash Flow Queen give it to Robin Bailey

Cash flow is so much about the MindSet towards Money - Robin is now working that out!

It's All About Perception!

Do you recognise this person?

Would you stop to listen?

Washington , DC Metro Station on a cold January morning in 2007 The man with a violin played six Bach pieces for about 45 minutes. During that time approx. 2 thousand people went through the station, most of them on their way to work.

After 3 minutes a middle aged man noticed there was a musician playing. He slowed his pace and stopped for a few seconds and then hurried to meet his schedule. 

4 minutes later: 
The violinist received his first dollar: a woman threw the money in the hat and, without stopping, continued to walk. 
  
6 minutes: 
A young man leaned against the wall to listen to him, then looked at his watch and started to walk again. 
  
10 minutes:
A 3-year old boy stopped but his mother tugged him along hurriedly. The kid stopped to look at the violinist again, but the mother pushed hard and the child continued to walk, turning his head all the time. This action was repeated by several other children. Every parent, without exception, forced their children to move on quickly.

45 minutes:
The musician played continuously.  Only 6 people stopped and listened for a short while. About 20 gave money, but continued to walk at their normal pace.  The man collected a total of $32.

1 hour:
He finished playing and silence took over. No one noticed. No one applauded, nor was there any recognition. 

Findings:
No one knew this, but the violinist was Joshua Bell, one of the greatest musicians in the world. He played one of the most intricate pieces ever written, with a violin worth $3.5 million dollars. Two days before Joshua Bell sold out a theater in Boston where the seats averaged $100.

This is a true story. Joshua Bell playing incognito in the Metro Station was organized by the Washington Post as part of a social experiment about perception, taste, and people's priorities. The questions raised: "In a common place environment, at an inappropriate hour, do we perceive beauty? Do we stop to appreciate it? Do we recognize talent in an unexpected context?"

One possible conclusion reached from this experiment could be this:  If we do not have a moment to stop and listen to one of the best musicians in the world, playing some of the finest music ever written, with one of the most beautiful instruments ever made.... How many other things are we missing?

Fixed Rates may be on the move!

I have just received word that one of the majors may be getting ready to increase its fixed interest rates by up to 60 basis points. This is a signifant increase and as you can imagine I am receiving a lot of questions from clients about potentially Rate Locking. So what does all this mean?

I can not answer this question for you, ultimately it is your decision to make but I would like to highlight the positives and negatives of locking into a fixed rate to help you in your decision making process.

Why should I fix my rate:

1. Because interest rates are at historic lows, and given recent RBA hints, they are unlikely to go too much lower.So the question is do you believe we are at the bottom of the rate cycle?
2. Because security is important to you and you get a lot of peace of mind knowing what your repayments will be every month. 
3. Because you have investment properties that currently may be in a positive cash flow position and if the rates where to go back but they may return back to a negative gearing scenario which could then havean impact on your cash flow.
4. The fixed loan market is different from the variable market in terms of how the banks source their funds and price the funds. Banks are trying to get every dollar of profit they can given this there is a high possibility that they will continue to increase the fixed rates.

Why you WOULDN'T LOCK IN Your Rate:

1. If you pay out a fixed interest loan early then there may be penalties which can be costly;
2. The variable rate, which is currently cheaper than most fixed rates, looks to be unchanged for the foreseeable future, so the benefits of locking are questionable given you have to pay a premium to get them

PUBLISHED NEW RATES FOR CBA

1 Year Fixed Rate 5.69%
2 Year Fixed Rate 6.54%
3 Year Fixed Rate 7.14%
4 Year Fixed Rate 7.59%
5 Year Fixed Rate 7.79%
7 Year Fixed Rate 8.29%
10 Year Fixed Rate 8.39%
15 Year Fixed Rate 8.44%

Choosing Your Attitude

Your attitude is the most important factor that influences financial success!

If your atitude towards money and finacne is poor and even if your attitude in general is making you feel bad, then your head and mindset is really not in a good space. Don't let negative thoughts rent a space in your mind! Take and breath and really ask yourself, what attitude would serve me better and what steps can I put nto place to correct my attitude? Then take action to implement the change. Your attitude and mindset is the one place that your have complete and utter control over - if you want to change it you can! If it is finances that are getting you down take some positive steps - identify what behaviours led to your current situation - track your spending to identify behaviour patters - make a change and set a goal. Don't forget get help to assist you with a structured plan of action and the help you stay accountable! You deserve it, your family deserves it and you can do it.

Call the Cash Flow Queen for a no obligation initial consultation on 0413130501 or email me for an appointment.