• Has your lender reviewed your mortgage or financial position recently?
• How long since you have checked to see if you have the best deal deal for your circumstances?
• Do you think your lender is likely to suggest a better, cheaper way  to structure deal with them?
• Do you think they would be objective in their offering when they only represent one brand, Theirs?

If you think the answers to any of the above is ‘No’, then HAVE YOU CONSIDERED A FINANCE BROKER?

• They will have access to numerous lenders in addition to major banks!
• being able to provide options that would take you hours to research. There are always ‘Specials’ being run by lenders , which can change weekly.
• Can advise of costs & pricing & provide various options
• Assist with developing a strategy to meet your goals like reducing number of payts & amount
• In a lot instances, present options for lower interest rates and costs
• Generally free to you as in most cases they are paid by the lender that you choose
• Brokers must be licenced

Australians should use their tax return to reduce debt rather than spending it frivolously, the nation’s largest credit union says.

Credit Union Australia (CUA) acting chief executive Rob Nicholls said consumers should repay existing debt in the current economic climate or invest the tax return for future growth.

“While those shoes or new pair of jeans may be a `must have’ today, there are better ways to spend a tax return that could provide you with an endless shoe or jeans collection in years to come,” Mr Nicholls said.

There were obvious ways for Australians to use their tax return including to reduce debt, Mr Nicholls said.

“It’s amazing how peacefully you will sleep when you don’t have a $5,000 credit card debt hanging over your head,” he said.

Recent data from the Reserve Bank of Australia (RBA) confirm consumers have increased their restraint with spending and subsequent levels of debt.

The total balances outstanding on credit and charge cards fell one per cent in March, while the average balance on a credit card, $3119 in March, grew by one per cent over the past year, RBA data revealed.

This was the slowest annual rate of growth in credit card balances since records started 14 years ago.

Repay any interest free loans, particularly those offering 12-month interest free terms when buying furniture or whitegoods, Mr Nicholls said.

“Some people are unaware that once this term has expired a large interest rate is usually applied to the loan, which can end up costing an individual much more than the original cost of the item,” he said.

Mr Nicholls said consumers should open an online savings or cash management account to take advantage of the higher interest rates on offer.

“Such accounts are great because they allow you access to your funds whenever you like,” he said.

Buy only essential items and avoid spending the tax return on conspicuous consumption, Mr Nicholls said.
“Tax returns can come in handy for necessities such as dentist bills, school or uniform fees, a car registration or car service,” he said.

“Alternately you could use it to start your Christmas shopping early.”

AAP

The recent drop in variable home loan interest rates can see some customers saving up to $100 each month on mortgage payments ( dependant upon loan balance & interest rate) however there are other ways to maximise savings!

1.  Advance repay- use the savings to pay off debts sooner by making additional repayments on the mortgage or other debts.

2. Consolidate - amalgamate debts into one simple & easy loan facility. This could potentially reduce monthly repayments.

3. Budget - establish a budget for each pay period to plan on how to use your money. While ensuring savings for holdiadys or christmas.

4. Make it regular - set up a Direct Debit payment that co-insides a day after your pay period. This helps to ensure no late fees.

5. Plan & Research major purchases - investigate and compare prices on major purchases. The Internet may help you research.

6. Buy Pre-loved - purchasing preloved or second hand can save a great amount on money. For example according to www.buyingadvice.com a new vehicle will depreciate by 15-20% in the first year alone!

7. Invest in high interest savings

8. Use rewards card - use store rewards casrd to save money on groceries or petrol.

Mtge & Finance Brief Oct 2008

Chartered Accountant and registered tax agent Jo Kelab of australianbiz.com.au says income taxs laws on the provision of fringe benefits to employees, their associates and clients are complex, especially at Christmas.

Holding a Christmas party is fraught with tax requirements, so its best to run any ideas past your accountant. Again, it all get back to the planning. “Christmas parties consitute ‘entertainment benefits’ and as such are subject to fringe benefit tax (FBT) unless specifically exempt, or they are subject to the ‘minor benefits’ exemption,” explains Kaleb.

A minor benefit is one that is provided to an employee or their associate on an ‘infrequent’ or ‘irregular’ basis, which is not a reward for services, and the cost is less than $300 per benefit inclusive of GST”

He says holding the Christmas party on the business premises on a working day is usually the most tax effective, because expenses such as food & drink are exempt from FBT for employees with no dollar limit, but no tax deduction or GST credit can be claimed.

“Alternatively, Christmas parties held off the business premises are exempmt from FBT where the cost for the employee and their assocaite is each less than $300 inclusive of GST, bit no tax deduction or GST credit can be claimed.”

In regards to gifts, Kaleb says that non enterainment gifts provided to employees are usually exempt from FBT where the total value is less than $300 inclusive of GST. A tax deduction and GST credit can also be claimed. These include flowers, wine, perfumes, gift vouchers and hampers.”

Kaleb recommends keeping these tips in mind:

• Non Entertainment gifts given to clients and suppliers do not fall within the FBT rules as they are not provided to employees. Generally a tax deduction and GST credit can be claimed for these gifts, provided they are not excessive or overly valuable
• The provision of entertainment gifts has different tax implications ( examples include threatre tickets, passes to attend musical, live play, movie, tickets to a sporting event or providing a holiday) Where the cost for the employee and their associate is less than $300 each GST inlcusive, there is no FBT, no tax deduction is allowed and no GST redit can be claimed
• However, if the cost for the employee and their associate is each $300 or more GST inclusive, a tax deduction and GST credit can be claimed, but FBT is payable. The cost of any entertainment gifts provided to clients is not subject to FBT and no tax deductions olr GST credit can be claimed.

Please note: This is not an attempt to scare anyone, more to alude to opportunities to protect your business moving forward in times of financial market flux.

Your banking arrangements have been fantastic over the last 7 years, You’ve made all your payments on time. The Bank has given you most of what you have wanted when you generally wanted it.
When things are good there is little to be worried about from yours or the banks perspective. But for the last 12 months things are not so good!

The Banks and other lending institutions haven’t been able to get money/capital the way they use to. If they are, the cost of obtaining it is going up.
What does this mean going forward?
Well … we all know that:
Interest rates, Fuel and Food have all moved up.  The RBA is suggesting that there is a need for 100,000 jobs to be lost over the coming period. With the reduction in confidence and the slowing of the economy, small business is going to come under some great pressures if it hasn’t already. Debtors starting to stretch – Creditors starting to push.

This being the case, banks are likely to take a position that they ‘need to conserve our reserves’. They are doing what is important for their business and that is reasonable! But the implications for your business may be profound. If not today it will be in 6 to 12 months time.

Consider this:   All your savings, house, super and perhaps one or two other things that you have forgotten, along with Credit Cards, home loan, Business loan, Business account are all with the one Institution. You have met all your payments since Adam was a boy. But the bank changes their approach or assessment of your business. Because the Banks need to conserve their reserves! 

What happens then, the relationship you thought you had along with the good payment history doesn’t count for much. Your effectively left financially hamstrung

What would happen if they used your savings to cover some of the house debt or credit card, because the mortgage I signed has an ‘All Monies’ Clause which allows surplus funds to be utilised to cover other debts. (Usually if you are in default). Or the credit card is behind but everything else is up to date, you could be considered in default on all your borrowings. Guess what happens then?! You’re in a little trouble with not that many options to fix the problem. If you think taking to another bank, you need to think again. They are under the same pressures.

When you are most likely to need some flexibility or assistance from your ‘banking relationship’ there is a strong possiblity your that your bank is not going to be prepared to help you.

Is this the time to consider finance and banking options for you & your business?

Is it time to be protecting your financial flexibility before it’s too late?
Talk with Finance Know how obligation free to determine some options. There are various opportunities that you may not have considered.