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Look in Your Financial Mirror to Get Out of Debt

October 22, 2006

Look in Your Financial Mirror and Get Out Of Debt!

Debt management is the key component to getting out of debt and your beginning your financial recovery. An analysis of your debt will help you to save hundreds, and perhaps thousands of dollars in interest charges alone. If you consolidate your debts, and/or consolidate credit card debt, along with other unsecured bills, you will be able to get out of debt as quickly as possible.

Just a few of the benefits of getting out of debt are allowing you to: save money on interest and/or late fees, stop creditor harassment, regain your good credit rating by helping to repair bad credit or negatives on your credit report.

Debt management techniques can reduce your monthly payments, interest charges, penalties and possibly even the reducing your repayment period. Even if you think bankruptcy is your only solution, there may be other alternatives. Filing bankruptcy may cost you for many years to come. Divorce, loss of a job, uncontrolled credit card spending and medical emergencies among the top reasons for debt problems. Bankruptcy can be avoided if you get help soon enough.

A red flag that you are heading for bankruptcy is a ratio of unsecured debt to annual income of 40-50% percent or more. To protect yourself from getting to this point, at the very least, keep your debts below 40% of your income. For example if your annual income is $10,000, your annual debts should be below $4,000 in order to avoid the threat of bankruptcy. Aim for a “safe” debt load of 36% or lower. So if your debts are in the 40-50% range, it’s time to get help and get out of debt, or at least use debt management techniques to lower your debt ratio.

So if you analyze your debts, reduce your debt ratio, and consolidate your debts, you will soon be able to get out of debt.

by Suzanne Webb-Brikas

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First time buyer: find your dream home now

October 12, 2006

In the present time, being a first time buyer is pretty disheartening. House prices are going high and putting properties out of reach for a common man. This has increased the level of borrowing to get on the ladder. As a result, many lenders are now offering mortgage loans at competitive interest rates to help people in making their dream a real truth.

Mortgage lenders always willingly offer first time buyer mortgage to the borrowers as they get a chance to make a long term relationship with the borrowers. They look at your capabilities as how much you can pay as mortgage repayments. Many mortgage lenders also look at your bank statements to make sure of your capability to repay the first time buyer mortgage on time. If you cannot repay then, you may find it difficult to repay the loan.

First time buyer means you are ready to buy your dream home and want to get rid of the land lords. It’s a big investment that one bears to become a homeowner. Therefore, you need to make sure that you are not paying more in terms of the interest rates. For that you will have to shop around for different mortgage lenders. Some of the deals are more expensive and you need to compare different mortgage deals to get one of the best first time buyer mortgage deals.

Being a first time buyer, you should know how much you can spend for your dream home. If the budget is out of reach, don’t take large loan as it will have a negative impact on your repayments and other related problems. Therefore, consider all the aspects before buying a home of your own.

Therefore, come forward and get on the ladder and feel the freedom of being a homeowner.

by Jake Nathan

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Choosing a financial planner

October 2, 2006

Choosing a financial planner

A financial planner can help you make the most of your money and decide where to invest it. But how do you pick a good planner and avoid being ripped off?

We’ve sourced some useful info from the Australian Securities and Investments Commission (ASIC) to help you in your search for the right financial planner.

Do I need a financial planner?
At the end of the day, it’s entirely up you! If you have money to invest or you’re looking to create wealth it might be worth speaking to a financial planner.

A planner takes into account your personal financial situation and your financial objectives to help you decide how to structure your investment eg. how much to invest in shares or property, cash or fixed interest etc. They’ll also be able to tell you how much insurance you need to make sure you’re covered, and what the tax implications will be.

Where do I go to find a good financial planner?
Talking to people you know at work or friends and family is a good way to find a planner. Ask your bank manager or contact your superannuation fund. Alternatively you can contact the Financial Planning Association (FPA) to find reputable, certified financial planners.

How do I make sure the planner is legit?
- Make sure they are licensed with ASIC.
- Don’t be afraid to ask questions. Find out how they are paid. Many are paid on a commission basis.
- Look at what services they offer and question them to find out their specialty. That may be handy if for example you are a public servant as public service super schemes are different from the private sector.
How much will a financial planner cost me?
There’s no prescribed amounts that planners can charge. Most reputable financial planners offer the initial consultation for free, so you have a chance to see if you like the planner and trust their expertise.

Planners can then charge an hourly rate, a fixed amount, a commission on the products they sell (the industry standard is between 1.5 per cent and 3 per cent). It may cost between $1,000 - $2,000 to begin with. However, these fees should be negotiable.

What paperwork should I get?
At your first consultation you should get a Financial Services Guide (FSG), which sets out who the advisor is, what services they offer, and what you can do if there’s a problem later on.

Once you commit to go ahead, you’ll get a Statement Of Advice (SOA) - advice specific to your situation and the planner’s reasons for believing the advice is suitable.

How do you avoid getting ripped off?
- Only ever use a licensed financial planner.
- Read all the info they give you, don’t be shy and ask plenty of questions. If the language is confusing it could be because it’s a scam.
- Always be careful of high returns, ’sure bets’ or secret deals.
- Ask your planner up front what happens if things go wrong later on. If they are unwilling or unable to outline their dispute resolution process, this could also be an indication that something is not right.

by Ryan Waston

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