However, the decision to retire early from your job comes with a cost. You need to plan and plan well to ensure that your life in retirement is secure. If you are thinking of early retirement, we have a handy retirement guide for you. We have rounded up some of the things you should do an ideal early retirement.  

1. Define Your Early retirement 

The first and most important thing is defining your early retirement. Every early retirement plan is different depending on what you are planning to do with your retirement life. If you are planning to exit the workforce to travel the world, then your early retirement plan will be different from a person planning to venture into another career. So, you need to understand and define the reason for your early retirement first. From there, it will be easy to create a perfect plan that factors all aspects of your dream retirement. 

2. Create A Retirement Plan 

After defining your early retirement, the second thing should be creating a retirement plan. A good plan should enable you to save up enough money to take care of you for the rest of your life. There are several things that you need to consider when it comes to creating a perfect retirement plan. First, the plan must consider the target retirement age. If you want to retire at 45, you need a different plan from someone retiring at 55 years. Your estimated life expectancy is also an important factor to consider when creating a retirement plan. Consider checking retirement age Australia calculator to help you estimate a perfect plan for your early retirement.

3. Reduce Your Spending 

For your early retirement plans to be successful, then you need to save extra money. The best way to achieve this is to buy cutting your expenses to the lowest figure possible. Living below your means will help achieve your saving goals faster. You may not need to buy the latest car model in the market since the current model is cheaper and still doing fine. You can also opt to live in an inexpensive neighbourhood so that you can achieve your saving goals. Make sure that you are always adjusting your budget to remove unnecessary spending and put this money towards saving. 

4. Find Ways Boost Your Income 

If you are planning to exit the workforce early, maybe at the age of 45, then your current job may not be enough to provide saving that you need for your retirement life. That’s why looking for other revenue sources to boost your income is a brilliant idea. There are a number of ways that you can achieve this. First, you can work overtime if your job allows it. The second thing you can do is taking up gigs during your free time. You might also look for a better paying employer. Last but not least, start a side hustle. 

5. Pay Off Debt 

The biggest mistake you can make when planning an early retirement Australia is failing to pay off debts. Debts eat into your income and thus making it impossible to maximise your savings. If you go to retirement with debts, then that becomes a huge problem as you will be servicing debts using your retirement saving. So, pay off all high-interest credit card debts if you have any to help you save more money for retirement. Try the best you can to live below your means to help you avoid getting into debts. 

6. Pay off the Mortgage 

The other things you need to take seriously is the issue of the mortgage. If you have a mortgage, you need to find a way that you can clear it before retiring. You can’t afford to go to retirement if you still have some debts to pay. Besides, you need your own home, not rentals when on retirement because anything can happen. Your money might get depleted faster than you had expected. If you get yourself in such situations, then you need to have at least a home where you can be in peace. So, pay off your mortgage before exiting gainful employment. 

7. Invest! Invest! Invest! 

There are many investment plans that you can exploit in Australia. The trick is to put your money where it is safe, and interests are a guarantee. Otherwise, you might lose your money and have your early retirement plans collapse. For instance, you can put your money in government bonds. This is one of the smartest and safest investment ideas since income is a guarantee. You can also invest in shares for established companies as well as corporate bonds for promising projects. However, seek expert advice when planning to invest for early retirement purposes. 

8. Make a Backup Plan 

It is always wise to a back plan for your early retirement. Not all plans come to fruition since things can go wrong along the way. What if you lose your job? Or what would happen if the employer winds up the company? These are factors that are sometimes beyond our control. So, check the worst-case scenarios and provide a backup plan. 

9. Review Your Retirement Plan 

You must keep reviewing your early retirement plan from time to time. Things change, and thus you need to keep adjusting the plan where necessary if you want to get the most out of your early retirement. If your side hustle is doing well, you might need to add more money into the saving account. You need a financial expert to help you review your early retirement plan.  

10. Work Hard and Be Disciplined 

Last but not least, is working hard and be disciplined. You must work hard to achieve your early retirement goals. Make as much money as you can in between the period that you are active in the workforce. However, you must also develop a strong financial discipline to get the most out of your plan. 

If you are planning for an early retirement Australia, these are ten things that you need to put into consideration. You need to know what you want in your retirement and save up enough money to meet your needs. We recommend that you work closely with a financial expert to make your early retirement plan is a success. 

The post Things You Should Do For An Early Retirement appeared first on Financial Planning Magazine.

There are many investment plans in Australia where you can put your money in for retirement. However, you need to be very smart in evaluating risks and expected returns on the investment because they vary. In this guide, we have rounded up 10 of the smartest investment plans for retirement.  

1 – Superannuation Plan

One of the best ways to invest for retirement is enrolling in the superannuation plans. However, this plan works for employees only. It is a pension program or company pension plan where funds are deposited in the superannuation account. The account is added by the employer based on the employee’s ordinary time earnings. The money is put in an invested where you earn returns. What makes this plan ideal for most employees is that it has no tax implications until retirement or withdrawal.  

2 – Listed Investment Companies (LICs)

For those looking to invest in a low-rate environment, then listed investment companies is an ideal option. LICs are traded on the Australia Securities Exchange (ASX), and thus, traders can monitor how their money is performing. The payment is made in the form of dividends from the profits that the company makes. You can reinvest your dividends to increase your shareholding. Once you retire, you can opt to sell your shares, which by now would have appreciated. It’s an ideal option investing for retirement. 

3 – Exchange-Traded Funds (EFTs)

EFTs or Income Partnerships is another popular investment plan in the market. It is a type of security that usually includes a collection of securities that closely resembles index funds. Just like the common stock, EFTs can be bought and sold during the day at a profit. What makes them popular is their convenience of stock and diversification at greater transparency and low cost compared to the typical mutual fund. So, return on investment guarantee. 

4 – Annuities

There are many reasons why annuities are some of the most popular investments for most people. One of them is a guaranteed regular income. It does not matter how the investments are performing in the markets and how long you live. You are guaranteed a regular income throughout your life. So, once you have put your money in these investments, you will start earning returns on it. It is one of the best investments that guarantees steady income even after retirement. However, the amount of income you receive is equal to the size of your investment.  

5 – Corporate Bonds

Corporate bonds are raised by companies to fund their business activities. The bonds are sold to the investors with the promise to pay interests at regular intervals when the bond matures. The amount of interest you get depends on the size of the investment. So, buying corporate bonds can be one of the investments that guarantee a steady source of income even after retirement. However, the paid interest depends on the ability of the project to generate revenue. Therefore, they are a bit high risk but offer higher interests. 

6 – Government Bonds

If high-risk corporate bonds scare you, then you can go for the government bonds. These are bonds issued to fund government spending and more so funding projects. They are considered low-risk because the interest is a guarantee. Unlike companies that can get bankrupt, governments never die. So, the interest on these bonds, though lower, is a guarantee. The payment can be periodic or what is called coupon payments or annual.  

7 – Real Estate Investment Trusts (REITs)

REITs is another lucrative investment that you should consider for your retirement. It’s a form of investment designed to exploits the real estate industry. In such investments, a management company collects money from shareholders to set up a real estate project. It could be building or buying rental properties in the market. Then, the management will collect rent, pay expenses, and collect a management fee. The rest of the money is shared among the shareholders based on their contributions.  

8 – Mutual Funds

As the name suggests, a mutual fund is a type of financial investment where a pool of money is collected from many investors and is invested in securities such as money market instruments, stocks, and bonds, amongst other assets. The fund is operated by a market manager who attempts to produce capital gains or income of the investors. Every investor has shares equal to their contribution, and that’s the percentage of the earned interest they receive. You can easily redeem your share after retirement or opt to continue receiving periodic interests. 

9 – Mortgage Funds

A mortgage fund is a type of financial investment where investors pool money together for mortgage investments. The collected money, which is the mortgage fund, is managed by a professional fund manager. It is either lent out as mortgage to borrowers or invested on the other mortgage-related projects such as other mortgage funds. The net interest earned from the fund is shared among the shareholder periodically. Your shares will also appreciate with time. 

10 – Rental Real Estate

Rental properties provide a perfect investment for retirement. If you have enough money or can secure a loan to buy or build rental properties, then this would be a perfect investment. With the rentals, you win in a couple of ways. First, you will be getting monthly income from rent. Second, the property will continue to appreciate every year. So, when you retire, your investment will have grown in several folds plus guaranteed monthly income. 

Conclusion 

Building sufficient resources that guaranteed a comfortable retirement is increasingly becoming a struggle for many people. However, there are small steps that you can start making from an early age to assure a worry-free retirement. Try one or multiple retirement investment plans that we have listed above to secure a comfortable retirement. If you are still having problem planning for your retirement, seek the assistance of a certified planner for your financial planning needs. They will help you pick a retirement plan that works for you. 

The post 10 Best Investments for Retirement appeared first on Financial Planning Magazine.

However, there are a few things that you need to put into consideration. Considering that you have the all the time to travel, you need to be very smart to get the most out of these travels without exhausting your finances. Here are 10 tips on how to travel upon retirement. 

1. Proper Budgeting 

The most important thing when travelling upon retirement is a realistic budget. You must be operating on a stringent financial plan to protect yourself from misusing your retirement perks. Don’t be tempted by the thousands of dollars in their bank account. If you are no longer in gainful employment, and thus it’s easy to get into financial instability. So, if you want to travel after retirement, you need to create a financial plan to help you spend your money diligently. You can create the plan yourself or hire a certified financial planner in Australia. 

2. Set Goals 

The biggest mistake senior travelers can make is failing to set travel goals. Where do you want to visit, and how long are you planning to stay? How much are you planning to spend? These are crucial questions that will help you set goals. Therefore, you need to make a bucket list for all your dream destinations. Then you need to plan when you want to travel each of the listed destinations. It is also important to take into consideration whether you are going with your spouse or fellow retirees. Lastly, is why you want to travel? These questions will help you set realistic goals. 

3. Pick Wildly New Destinations 

Travelling after retirement gives you all the time you need in the world. So, don’t limit yourself to the so-called true destinations. There are many other new places that you put in your bucket list. The trick is to be wildly adventurous. Pick destinations that are new and fresh and enjoy their unique beauty. There are hundreds of wondrous destinations, but very little information is known about them. These are the destination you need to visit. However, don’t compromise your safety in the process. 

4. Tap on Hotel and Airfare Discounts 

You will be surprised to learn that some of the popular hotels as well as airlines offer discounts to their senior customers. Therefore, if you are planning to tour the world after retirement, then you need to try to benefit from such perks. A discount of 10-20% is pretty cool, especially if you are planning to travel more often. You can easily find these hotels and airlines by searching the internet. Similarly, you can ask friends and family about them. However, contact them to confirm these perks. 

5. Forgo Hotels 

Be a bit adventurous and at the same time, reduce the cost of travel by forgoing hotel accommodation. There are many exciting accommodation options that you can select from without compromising your security and safety. The Airbnb and VRBO are some of the most popular options since you can rent a condo, treehouse, apartment or even a houseboat. Home Exchange and hostels are also a great option for people looking to spend less. All these options are cheaper than hotels and somehow more adventurous.  

6. Rent Out Your Home 

If you live in a tourist rich place in Australia, why not rent out your home. There are many tourists, especially families, who are looking for such accommodation. So, you can put up for rent for the period you will be away. This is one of the smartest tricks to supplement your travel costs. You will also be making extra money on your retirement. So, put your home on Airbnb, VRBO and Home Exchange, amongst other platforms. 

7. Capitalise On Last-Minute Deals 

When travelling after retirement, you have all the time to capitalise of the last-minute deals to your desired destination. During the off-peak months of the year, most hotels and airline offer incredible discounts to attract customers. Some of the hotels offer up to 70% discounts on accommodation. For example, if you desire to travel to Sunshine Coast, Queensland, you can capitalise last-minute deal and opportunities. At this time, you can afford the best hotels in this region due to discounts. There are several apps and website can help track these deals. 

8. Slow Travel 

Slow travel or extended visits works great for retirees. These are kind of travels that value for money. First, you will be able to fully exploit the beauty of your dream destination since you have all the time in the world. Second, it will cost you less in the long run. Longer accommodation packages are cheaper, and the cost of transport is usually lower. You will also avoid tourist traps and learn more about the destination. 

9. RVing 

Investing in a recreational vehicle is a perfect way to drive around Australia, especially the national parks. RVing works great for people who love adventures and more so touring the many eco-tourism destinations this country offers. It is an exciting experience, especially for those travelling with spouses or with friends. You can also generate some income in retirement by hiring your RV when you are not travelling. 

10. Take Travel Insurance 

Last but not least is travel insurance. Travelling upon retirement is exciting but a bit risky. You are travelling on your retirement package, and probably, you don’t have another income-generating activity. That’s why you should think about travel insurance and more so medical travel insurance. You are visiting new places, and this might expose you to serious illnesses. That is why medical insurance is one of the crucial covers for travelling retirees.  

Other travel coverage you can take include trip cancellation, evacuation, baggage and personal item loss, and life insurance, amongst others. 

Conclusion 

If you are planning to travel after retirement, this is definitely a smart decision. You have all the time in the world and money to travel to your dream destinations and enjoy an extended stay. However, you need to be smart to get the most out of your retirement travels. With these 10 tips, you have everything you need to get the most out of your retirement travels. We also recommend that you hire a financial planner to help you manage your finances. 

The post 10 Tips For Ideal Retirement Travel appeared first on Financial Planning Magazine.

So, which are the most effective saving habits you can do? Well, there are many money-saving habits that have been tried and found to work extremely well. If you have been trying to save money in vain, this guide is for you. We have rounded up 10 most effective money-saving habits you can do: 

1. Open a Savings Account 

The first step to saving money is opening a savings account. The mistakes that most people make is keeping their ‘savings’ in their current account. Some have their homes as their saving accounts. Start by opening a savings account. Having a saving account helps you to avoid temptations of withdrawing the saved money or using when things get tough. In some cases, the bank provides a specific period when you can get access to your money. That’s one of the best strategies to start a saving plan. 

2. Have a saving Goal 

Don’t save for the purpose of having some savings in the account. You need to have very elaborate saving goals. What do you want to do with the money you are saving? Do you want to buy a house or a car? Are you saving on advancing your education or travel tour? The trick is to have a convincing saving goal. The goal should motivate you to save more money into the savings account. If you don’t have a goal, then you will not have the motivation to keep setting aside more money for savings. 

3. Start Small 

One of the biggest mistakes that people make is thinking that they can save a huge chunk of their monthly income. That is wrong and does not work. Such an approach will get you disappointed. Starting small as you build your saving capacity is the best strategy. If you get paid on a weekly or monthly basis, save something small off your income. Even if it is 2% of your net income, you are saving something. Be consistent and keep adding more money into the account as you adjust your expenses. 

4. Try Automatic Transfer 

The most difficult part for most people, especially those saving for the first time, is depositing money into the savings account. So, the best trick is to set up automatic transfers. It allows your bank to send money to your savings account automatically. You can set up automatic a weekly or monthly transfer depending on your payment schedule. What you will be receiving is your net income, which makes it easy to manage your finances. This is a strategy that everyone having problems reaching their saving goals should try. 

5. Budget Your Saving 

If you want to avoid automated transfers and take control of your spending, then budgeting your savings is a perfect strategy. Budget saving includes putting savings as part of your budget. What you need is to prioritise savings. Have it as the normal bills such as the energy bill and make sure that have deposited it into your saving account as among the first bills. So, make sure that you have written saving on the priority list of your budget.  

6. Plan Non-Spending Days 

Another money-saving habits you can do is to set aside non-spending days in a week. If you usually take coffee and snacks every day, then you can skip such spending for two days a week. If you spend most of your evening drink, then you can have two days of walking in the park or watching a movie every week. Put the money that you have saved into the savings account. It is a money-saving habit that can make a huge difference. 

7. Save On Everyday Items 

Saving on every item you buy every day can make a huge difference in your savings account. For example, you can make a huge saving in the long run if you save on groceries. Using coupons or buy one get one deal saves a lot of money in groceries. Do you know that if you can save $10 per day on items, the figure would translate to $520 savings in a year? Well, that’s the kind of difference you can make. 

8. Save Extra Money 

If you get extra money from your work, act like you received nothing and put it in savings. If you get a promotion at work or your salary is raised, don’t adjust your life by making it more expensive. A promotion makes people go for bigger cars or move to more expensive neighbourhoods. So, you can make a huge impact on your savings account by saving the extra money you receive. 

9. Avoid Paying For Services You Can Get at Home 

By paying for services you can get at home, you are wasting money. Why would you eat out when you can cook at home? Do you know that you can save more than 50% on your food budget if you start cooking at home and packing lunch? You can also save a lot of money of your brew at home and bring some coffee to work in a thermos. In addition to that, you can forgo gym membership and start running or exercising at home. 

10. Retirement Account 

For all the kinds of saving that you are doing, a good saver must always have a retirement account. This is one of the key saving tips that most people ignore until it’s late. Most people, especially the young ones, forget that they will get old and lose gainful employment. So, whether you are saving to buy a car or house, don’t forget to open a retirement account where you will be putting a small percentage of your monthly income.  

Conclusion 

If you have been trying to save money in vain, these are 10 money-saving habits you can do. They have been tried and found to work extremely well. Therefore, you have no reason for not saving money. Try any of these strategies or combine a number of them, and you will see a difference in your savings account. 

The post 10 Most Effective Money Saving Habits You Can Do appeared first on Financial Planning Magazine.

The good news is that there are many ways you can make budgeting fun. If you have been unable to budget consistently because of boredom, this guide is for you. We have put together some of the best ways of making budgeting fun to achieve consistency. Here are 10 ways of making budgeting more fun: 

1. Use Budgeting Apps 

Technology has made almost everything we do much easier. Budgeting is one thing that technology has made easy. There are tons of applications that can help make budgeting fun. What these apps do is organising your finances by offering automated money managed. Some of the apps, such as Mint, comes with tools that track your spending against your budget. Once you have set up the budget, these apps will alert you automatically whenever the spending goes above it. The top budgeting apps are easy to use and make budgeting fun. 

2. Set Your Financial Goals 

The budgeting process must be goal-driven. Otherwise, you cannot go far without getting bored due to a lack of motivation. So, you need motivation to budget consistently. Having financial goals is one of the ways you can add vigour into the budgeting. The goals don’t have to big, but they should be realistic. For starters, you can start with saving a $1, 000 emergency fund. So you will need to have savings as part of the budget. The fund will act as a motivation towards saving. Next, you can start saving to buy a house. 

3. Reward Yourself 

Whether you are budgeting to save money for either a house or car, etc., you need to set milestones. For example, if you need $20,000 to buy a car, then you set four milestones of $5,000. Once you reach every milestone, you reward yourself with something like dinner or new clothes. You can also take a cheap vacation after reaching the next milestone. This will be a big motivation that will keep you in the plan.  

4. Make Budgeting A Family Affair 

If you have a family, then you must bring everyone on board. Every member must participate in the budget process for it to be inclusive. Otherwise, leaving some of the members out will make the process quite difficult and boring for them to implement. For instance, your spouse may not understand why you have suddenly stopped eating out. You should also discuss the goals and agree on what you need as a family. This will make budgeting more fun as everyone will have their eyes on the goal.  

5. Make Budgeting Attractive 

Making the budgeting pretty is another trick that helps to avoid getting bored. Imagine writing your budgeting in an old book. Well, it will not last for long because there is nothing attractive about that budget. The best way to go about it is making the budget as pretty as possible. If you are writing it down, use a colourful and engaging book. You can also use budget spreadsheets which are bright and easy to use. There are also many worksheets that you get on the internet that will help make budgeting pretty. 

6. Make Budgeting Easy 

One of the common mistakes that people make when budgeting is complicating it. A budget should be easy and simple but must capture all the relevant details. It should not be stressful or else; you will get bored really quick. Some of the key elements that make budgeting easy is having a schedule. The schedule should be easy to incorporate into your everyday life. Make it simple by having fewer categories. If you have it on your computer, create a new folder for it. 

7. Change Your Perception 

You need a positive mindset when it comes to budgeting. Most people that lack consistency in their budgeting usually have the wrong mindset about the whole thing. They do not really believe that they will successfully commit to the budget. So, if you have this kind of thinking, then you will definitely have a problem achieving your budgeting goals. Therefore, you need to change your negative perception of budgeting. See the reasons why you need it and more so the goals you have set. 

8. Don’t Punish Yourself 

Regardless of the financial achievements that you are looking for, don’t punish yourself in the process. That’s another big mistake that most people make. Because you are saving to buy a home does not that you start denying yourself some of the good things. For example, you should not stop going out for dinner with our spouse or family completely. What you need to reduces the number of times you eat out to save money. Similarly, you should stop drinking but reduce the number of times as well as the number of beers. 

9. Make it Predictable 

If you want to budget successfully, then you must make it predictable. It should not be something that comes up on any day of the month. This is a critical point, especially if you are bringing every member of the family on board. For example, if your budget monthly, then everyone must know when the day the budgeting is done. If you budget on the last day of every month, make sure that you have stuck to that. With that, you will ensure that everyone is psychologically ready for it. 

10. Join A Community 

Last but not least, is joining a community. Everything becomes fun when you are many. If you have friends whom you share the same budgeting goals, then you can form a budgeting group. There are also many saving groups on various social media platforms, such as Facebook that you can join. You will be amazed by how budgeting becomes fun with such communities. Additionally, you will find members in these communities with stories of successfully budgeting. So, you will have a lot to learn from such members. 

Conclusion 

The key to budgeting is making the process fun. Otherwise, you will not go far without getting bored. Simple and easy budget and setting goals are some of the key elements that make the process fun. Do not punish yourself as this will make you hate budgeting in the long run. It is also important that you seek professional advice from your local financial planner. 

The post 10 Expert Tips On How To Make Budgeting More Fun appeared first on Financial Planning Magazine.

One of the best methods for managing multiple loans is debt consolidation. This is a strategy that most people dealing with multiple loans use to streamline payment. So, what is debt consolidation, and what’s the right practice? Well, this guide provides all you need to about debt consolidation. 

What is Debt Consolidation? 

Debt consolidation is a strategy that helps you to merge multiple debts into a single loan. Instead of making separate payment for your debts, you can have all the loans paid from a single lender. With this strategy, a financial institution of your choice will provide a loan that will pay off all your debts. So, you will be left with just one loan to pay. Consolidated loans usually come at a lower interest rate, making them an ideal option for many.  

Although it will not wipe out your debts, it will make paying loans less expensive. However, the process can take a lot of time since you need to apply by sending a request to a bank. The application might be approved or declined. So, you need to get several things right to qualify. 

Best Practices In Debt Consolidation 

Debt consolidation is the best thing to do if you are dealing with multiple loans. It enables you to concentrate on a single loan rather than dealing with loans left, right and centres. However, it may not be the best option for everyone, especially when the new loan becomes more expensive. You, therefore, need to get several things correct to go this route. Here are the best practices when consolidating loans: 

1. Understand the Impact  

The first thing you need to consider when planning for debt consolidation is the impact it will have on your financial life. As mentioned above, the consolidation of loans does not work for everyone. There are some cases when consolidating will make the loan more expensive compared to the original loans. Additionally, a longer payment duration may mean more interest on you. Therefore, you need to understand the content of the loan before signing the deal. Will you be paying more or less? If the consolidated loan will become more expensive, avoid it. 

2. Play Around With Numbers 

Debt consolidation requires a lot of calculations to get the best deals. You need to play around with the loan percentages. There are some of the loans that can be left out of the consolidation due to their interests. For example, let’s say you have a student loan with a 4.45% interest rate, several credit cards at 16-17%, a balance transfer card at 13%, and a personal loan of 9%. It will be more beneficial to leave the low-interest loans, such as the student loan out of the consolidation. That’s because it will be cheaper to pay low interest yourself than consolidating it. 

3. Available Choices 

There are various options that you can pick from when it comes to debt consolidation. So, make sure that you have checked all of them to choose the best one for you. Here are three main options you can select from:  

A debt management plan. These plans are developed by your creditors and a non-profit debt counselling agency. They are plans that aim at consolidating your loan at a lower rate. However, they have a longer payment period, which could make the loan a bit expensive. But you enjoy a reduced payment pressure, especially if your income levels have dwindled. 

Debt Settlement Companies. These are organisations that negotiate your debt with your creditors for you pay a lump sum that’s less than your total debt. Once the deal is reached, you will be required to deposit money in the savings account until you accumulate the agreed amount. However, you need to get all the information about the deal. You need to know the time for payment and if there are other hidden charges. You must also try to avoid scammers. 

A balance transfer. The strategy including pooling your money and putting it in a balance transfer account. The transfer account usually gives you a grace period, which you can use to pay the principal. However, make sure that you’ve understood the APR rises after the introductory or grace period. You can also have your loans consolidated with a line of credit, such as home equity.  

4. Avoid Taking Up New Loans 

Last but not least is to avoid taking up new debt. It can be tempting to take up another loan since you are receiving one monthly bill. However, you must avoid all these temptations and stick to the plan of being debt-free. Make sure that you have developed a new financial plan to take you through the time you will be paying off the consolidated loan.  

Main Reason For Declined Application 

Application for debt consolidation is not a guarantee that you will be approved. Here are three main reasons why you can be declined: 

1. Lack of Security 

When consolidating debts, the financial institution often asks for collateral and security. It is a common request for people with debt paying problems. The security is to ensure that the lender doesn’t lose money, even if you are unable to pay.  

2. Debt Problems Troubles 

If you have a poor credit score, lenders may be unwilling to consolidate your debts. If you have been recording late payments or debts, you will have a problem with a low credit score. Additionally, high balances owning can also make your application denied. 

3. Too Much Debt 

If you have too much debt, no financial institution will be willing to deal with you. If your debts exceeded 30-35% of your monthly income in Australia, most lenders would avoid you. If you are already at 35%, your request may be declined. 

Conclusion 

Paying multiple debts can be frustrating. With the payment different paying dates, you can have a lot of financial problems. That is why debt consolidation is the best deal for people paying multiple loans. However, you must be very careful because loan consolidation can be expensive. Therefore, negotiate the best deal with the lender. A local qualified financial planner can help you choose the best consolidation package for you. 

The post Debt Consolidation: The Right Practice And Reasons For Decline appeared first on Financial Planning Magazine.

Being broke is not unusual for young people. However, there many things that you can do to avoid getting to this state or getting out of it. If you are broke, this guide is for you. We have rounded up some of the best ways to avoid becoming broke. 

1. Audit Your Spending 

If you are getting broke, it is an indication that you are spending income very fast. Maybe you have too many expensive spending than you can afford and that’s why your money gets exhausted before the next pay. Therefore, what you need is an audit for your spending. Sit down and look at how you’ve been spending your money daily. You can start by recording how you spend money every day or keep all receipts. Then you will be able to identify the unnecessary spending and cut them off your budget. That’s one strategy of avoiding getting broke. 

2. Don’t Spend More Than You Earn 

The rule of the thumb when it comes to managing money is to avoid spending more than you earn. This is the most straightforward strategy for avoiding getting broke. You must always have an expenditure that fits within your monthly. So, you need to set limits in your spending. Otherwise, you will need to take out loans to supplement the deficit. Therefore, you must operate on a stringent budget to avoid getting broke.  

3. Have a Financial Plan

The main contributor to being broke is the lack of a financial plan. Unfortunately, most young people do not know how to spend money diligently. If you find yourself getting broke often, then you need to consider developing a financial plan. This is a plan that helps to allocate your many to useful spending to ensure a cash flow throughout the month. It is something that you can create by yourself, but we recommend that you seek the services of a local financial planner. 

4. Start Saving 

Saving a portion of your money is another strategy that can help you avoid getting broke. There are always those bad days of the month when most people don’t have money. Therefore, you have a portion of your money saved to cover these days. Therefore, whenever the rainy days come, you will have something to keep afloat until the payday. However, this money should not be kept in the house because of the temptation of using. Try a separate bank account for your savings. 

5. Avoid Splurging 

One of the biggest mistakes that young people make is buying everything that pleases their eyes. Most of them can’t tell between needing and wanting. That’s a very irresponsible way of spending money. You must avoid splurge temptations. Avoid buying what you want but what you need. You may not need that expensive smartphone even if it is the latest in the market. You can still use that car for another two years instead of going for the expensive new models. That’s how you fight the urge to splurge. 

6. Stay Away From Danger Zone 

What is taking most of your money? Or rather, what are you almost addicted to? These are what we refer to as the danger zones. If you love new shoes or you love buying new clothes, then you need to avoid places such as shops and malls that stocks these items. If you have been spending most of your money on drinks, then you should avoid bars and friends that you drink with. This is one of the strategies that will help reduce unnecessary spending. It also means more money in the pocket. 

7. Get Rid of Credit Card 

One of the biggest mistakes young people make is using multiple credit cards. It is one of the traps that have left most of them in a financial crisis they could have avoided. With a credit card, you just swipe at every purchase, and before you know it, you are overspending. You also get yourself into serious debts. That’s how most individuals become broke. So, throw away that credit card and start using cash. With cash transactions, you will be able to monitor your spending. You will also avoid paying off expensive loans. 

8. Invest Smartly 

If the money that you are earning is too little that it cannot meet expenses, then consider some form of investment. There are many types of investment opportunities here in Australia that you can put your money in and start getting regular income. For example, you can set up a business and start getting revenues. Similarly, you can buy bonds, annuities, EFTs, or invest in a mutual fund. All these are investment opportunities that can earn you passive income to supplement your salary. 

9. Avoid Piling Up Debts 

It is very easy to get in debt, especially when you are spending more than you earn. However, the problem starts when they start piling up. So, most of your money goes to servicing debts. So, you have no money in the pocket and become broke. Avoid piling up debts by monitoring the debt-to-income ratio. If the ratio is above thirty percent, then you should get worried. Additionally, clear your student’s loan as fast as you can. 

10. Have a Side Hustle 

If you find out that your monthly income is not meeting your needs, then you need to consider looking for another source of money. Having a side hustle is one of the best ways to supplement your monthly budget. You can get a part-time job from another company or start your own business. There are so many online jobs that you can also take up, such as ghostwriting. 

Conclusion 

Being young and broke is a common thing for young people, but you can avoid it by being smart. The most important thing is to establish what is getting you broke. If you are overspending, strike out all the unnecessary expenses. You should also avoid piling up debts. Additionally, if the money is just not enough, have a side hustle to supplement your monthly income. However, have problems managing your money, consult a local financial planner. 

The post Young and Broke: 10 Smart Ways Young People Can Avoid Being Broke appeared first on Financial Planning Magazine.

So, what are the best times to borrow money? Well, there are instances when borrowing money is the smartest decision that you can make. Some of the situations might be a matter of life and death or very lucrative business opportunities. Here are 9 best times when it is right to borrow money. 

1. For Emergencies 

If you have an emergency and you can’t raise the required amount, then you have all the reasons to borrow money. Most emergencies are medical in nature. For example, if you have been hospitalised or one of your family members is in the hospital, you can borrow to pay medical bills. This is a life and death situation, and thus, money cannot be equal to human life. However, you need to borrow diligently because medical costs can be very high. Go for the lowest interests in the financial. You should also choose less expensive wards to reduce the overall medical bills. 

2. For Education 

Improving your education is an investment in yourself. Furthering your education comes with numerous perks, including promotions, better pay, and so on. In short, you will be earning more money from your career as you progress in educations. Therefore, borrowing money for tuition is one of the best ways of spending your loan. The loan will propel your career, and in the long run, you will be earning more money. That makes it an ideal way of investing credit. You can also borrow money to pay for your children’s education. However, go for low-interest loans in both cases. 

3. To Pay Off Toxic Debts 

Sometimes, circumstances may force you to take out high-interest loans. For instance, if you have a medical emergency, then you take the loan that is available at the moment to save a life. But you can deal with such loans later by taking another low-interest loan. For instance, if you have a couple of high toxic debts, you can go for a lower interest personal loan to pay off the expensive. This is definitely a smart best way of dealing with expensive debts. You will not only reduce the cost of loans but also improve your credit score. 

4. To Buy A Major Asset 

Some assets that make our lives better, and thus, they are more like basic things to us. These are assets that can qualify you to create a debt. For example, if you want to buy a house, then it is fine that you take out a loan provided, you will be able to pay it off. If you want to purchase a car to ease your mobility, then you can create debt. However, you should be able to pay off the debt to avoid losing the collateral. It is also wise to go for the cheapest money in the market. 

5. When Moving 

Anyone who has gone through a moving experience will tell you how stressful it can be. It is also a very costly affair. From paying the mover, buying boxes to many other costs that keep popping, it can cost you thousands of dollars. Sometimes, moving can be categorised as an emergency, especially when you are under a notice to move. If you have don’t have enough money, then borrowing would be the right thing to do. However, you need to go a cheaper loan. A personal loan would be the best option as opposed to using a credit card. 

6. To Pay car repair Bills 

A car is one of the assets that is difficult to do without. It enables you to move around efficient as well as handle more tasks on a day as opposed to using public transport. So, no matter the financial condition you are in, you need a car. If your car breaks down and you don’t have enough money to pay off the repair bill, then you have every reason to create a debt. However, you should try as much as you can to avoid putting the bill on a credit card. A personal loan would be the best option because of low-interest rates. 

7. For Home Improvement 

Inefficient homes can cost you thousands of dollars every year. If you are having a problem with the plumbing system, you can take out a loan to improve its efficiency. Other cases in home improvement when borrowing would be okay is updating your kitchen, replace the roof, and add outdoor features such as decks and patios amongst others. You have various loans that you can select from for home improvement. You can take the homeowner’s equity line of credit, which is based on your equity. Taking out a cheap personal loan for home improvement is also a smart idea. 

8. When Your Business is Doing Well 

If you are in the business sector, then taking up loans is the best way to expand your business. It’s also a smart way to enhance cash flow. When your business is performing very well, you should start evaluating your contingency plan. There is always a time when most businesses experience a low season. That’s when a line of credit can be a lifesaver. So, when your business is doing very well, many banks will be ready to give a line of credit, which you can use to improve cash flow in case of unforeseen emergencies and low season. 

9. Lucrative Deal 

For those in businesses of selling cars and real estate, a good deal can come up when you don’t have enough money. In instances where you are sure that you will make good money if you jump in, then taking up a loan would be a good decision. However, the cost of the loan is an important factor to consider. A personal loan is always the best choice due to lower interest rates. 

Conclusion 

Creating debts is a big responsibility that has severe ramifications if you don’t keep your side of the bargain. Failure to pay loans affects credit score, and prevent you from borrowing money in the future. However, it is always advisable that you go for the cheapest loan possible such as personal loans. Their lower interest rate and extended payment period make it is easy to repay them.  

The post Borrowing Money: When is the right time to do it? appeared first on Financial Planning Magazine.

The good news is that no matter how bad the situation is, you can be debt-free. There are many strategies you can use to knock off debts, but each requires a lot of commitment. In this guide, we have put together 10 ways you can get out of debt. 

1. Stop Creating More Debts 

Stopping creating more debts is one of the biggest tricks to getting out debt. The debt situation gets worse every time you take up a new loan, yet you have other pending loans. To stop the vicious cycle, you need to stop creating more debts. It is one of the most challenging things to do but a crucial step for anyone trying to get out of debt. You can reduce the temptation of taking up a new loan by cutting off unnecessary expenses. 

2. Reduce Your Spending 

The other strategy you need to do is reducing your spending. If you want to stop taking up more loans, you must reduce your expenses. Most people struggling with debts have a lot of unnecessary spending. They are probably living a costly life than they can afford. That’s what drives them into financial problems. Therefore, assess your expense to cut off what you don’t need. You should also forgo most of the expensive spending for cheaper ones. 

3. Increase Your Monthly Payment 

One of the best ways to knock off debts is increasing your monthly payments. Most of the financial institutions offer debtors some form of incentives when they pay off their loans earlier. So, by increasing your monthly payments, you will be making your loan less expensive. This will be a win-win. You will knock off the debt faster, and you will save some few dollars in the process. That’s a tip that everyone with debts and some extra money should try.  

4. Start Clearing Debts One By One 

If you have multiple debts, one of the best strategies you can use is clearing the debts one after the other. The best ways to go about it categorizing your debts based on their urgency. Clear the toxic debts first. If you have very high-interest debts, give them all you’ve got by increasing your monthly. With fast clearance, you will be saving yourself a lot of money in the long run. Then deal with the next one in that same sequence. That is one of the ways that you can deal with multiple loans successfully. 

5. Request For Lower Interest Rate 

One of the biggest problems that make it difficult for most people to pay loans is the high interest rates. This is a common problem for people with a low credit score or those who have taken up emergency loans. These kinds of loans attract high interest, which can be a problem for most debtors. If you have such types of loans, you can always request your lender to lower your interest rates. If you have convincing reasons, then you can get a lower rate. 

6. Clear The Old Debt 

This can be a bit tricky but is very crucial when it comes to improving you credit score. The old loans you have been unable to pay off are the ones that lower your credit report. So, it is wise to pay them off after dealing some of the toxic loans. However, you need to have a strategy when dealing with this kind of loans. First, you need to contact the creditor to know the state of the loan and if they can cut you a deal. For example, they might agree to reduce the interest.  

7. Fix You Debt-to-Income Ratio 

Lowering your debt-to-income (DTI) ratio is another strategy that can help you knock off debts. This is a ratio that compares the number of monthly debt payment to you net monthly income. The higher the ratio, the worse you are performing financial. If the debt to income ratio above 30 per cent, then you need to work on ways that you can bring it down. Paying your old debts is one of the ways that you can fix this ratio. 

8. Stop Using Credit Cards 

Financial experts always point out credit cards as one of the biggest causes of high debts. The fact that people have credit money on their card that can use whenever you have shortfalls, they are tempted to spending more than they can afford. That is what leads debt problems. So, you can get out of debts by avoiding credit cards. This is a strategy that will help curb your spending and reduce the temptations of borrowing more. 

9. Pick A Side Hustle 

If you rely on one job to address your debt issues and it’s not working, then expand your revenue base. The easiest way to go about it is picking up a side hustle. If you have time to spare, you can take up a gig in another company on a part-time basis. These jobs will provide extra money to pay off loans and also to avoid creating more debts. 

10. Sell Everything You don’t Need 

If you have a lot of stuff that you don’t need in your house, you can sell it to pay off debt. So, if your neighbourhood permit garage sale, consider holding one for all the stuff that you don’t need. You can also contact businesspeople who buy second items and clear all the clutter in your home that you don’t need. Use the money to pay off some of the toxic and old debts. 

Conclusion 

Living in debt gives a comfortable lifestyle because you have money when you need it. But when the disaster strike, like losing your job, things quickly get messed fast. So, if you are struggling with debt, these are just some of the strategies to be debt-free.

The post 10 Useful Tips On How To Get Out Of DEBT appeared first on Financial Planning Magazine.

Research has shown an undeniable link between mental health and financial health. People with enough money are happier and mentally healthier compared to people struggling with financial problems. So how important is money in your well-being? Well, in this guide, we have put together some of the ways your finances are affecting your mental health. 

1. Stress  

One of the biggest ways that your finances will affect your mental health is stress. According to studies that have been conducted on various cases, it has been proven that people struggling finances are more prone to stress than their counterparts. Once you realise that you don’t have a ‘safety net’ to handle possible emergencies, then you cannot think straight. You are likely to get stressed and more anxious even by very simple. You will always live in fear for the worst, and that’s how to get the stress condition worse. If things don’t improve sooner, the condition might worsen.  

2. Anxiety 

Anxiety is another mental condition that can be triggered by your financial stability. When you are in good financial health, and you can meet all financial obligations, the level of anxiety due to financial pressure is almost zero. But once you get debts piling up or lose your job unexpectedly, then anxiety will start kicking in. Studies have shown that more than 29% of the people struggling with debt usually suffer severe anxiety. 

3. Depression 

Depression is one of the biggest mental problems that most people in Australia are struggling with. However, studies and shown an undeniable link between depression and poor financial health. When you have enough money to meet all your financial obligations and living a good life, the possibilities of developing are very low. However, the moment your income taps get dry, then you start getting anxious, and the nest thing is stress. Studies have shown that around 23% of the people in debt usually suffer severe depression. That is how financial health can impact your mental. 

4. Desperation for Temporary Relief 

Just like when you are feeling pain, taking a painkiller that does not cure the problem feels but release the symptoms. That is the same when in financial problems. If you have lost a job and you are struggling with paying the mortgage or rent, then you end looking for temporary solutions. You can borrow the money to repay the debts that have matured, yet what you have done is postponing the problem to a later date. This is usually the period when most people find themselves in toxic debts such as payday loans which continues to create more financial mess. 

5. Plummeting Self-Esteem 

One of the biggest mental battles that individuals struggling with financial problems face are low self-esteem issues. Once you lose a job or your business has fallen, and you are sinking into debts, self-confidence start eroding. Such people then tend to withdraw from their previous company the moment they cannot live the kind of life they were used to. That’s a sign they are slowly getting into mental problems. Low self-stem has very negative effects on victims’ mental health. If not checked or the situation does not improve, they slowly slide into stress and then depression. 

6. Unhealed Would May Come Back 

When you are financially unstable, your mind is usually preoccupied with fear. You can’t figure out how to deal with the financial burdens with bills piling up. At this time, nothing positive can come from your mind. The brain will start remembering the times that you were going through the same experience. So, you will find yourself feeling bitter most of the time. Therefore, the possibilities of unhealed wounds coming back to haunt you are very high. Therefore, the pain will get bigger as the time goes by unless you get psychological help or the situation improves. 

7. Poor Decision Making 

To make a sound decision about your life or anything, you need a sound mind. That is not possible when you are struggling with financial problems. With the mind preoccupied with negative thoughts, it is difficult to make rational decisions. In most cases, people are looking for shortcuts to solve their financial mess, even if it is a temporary solution. Most of the decisions are likely to be very expensive and could even make the situation worse.  

8. Feeling Out of Control 

When you lose a job, or your business goes down, then your financial obligation will catch up with you instantly. Maybe you have a car loan or mortgage to pay off, and if you’ve got a family, things get even worse. When everything gets exhausted and stretched to the limit, then you will start feeling helpless. You will find everything spinning out of control. At this moment, your state of mind will start getting worse. You will start sinking into debt, and it is pretty easy to slip into depression if things don’t improve. 

9. Denial 

Last but not least is denial. A good number of people facing financial instability tend to live denial. This is a mental condition that makes them believe in non-existent things and not reality. Such people do not want to adjust according to the current situation. Denial is a mental condition that is difficult to deal with and ends up making things worse. In most cases, such people end up depressed. 

The Bottom Line  

If you want to be mentally healthy, then you must ensure that you are financially healthy as well. But because any business can fall, you can lose a job and get into debt; you need to consider covering yourself from financial problems. One crucial thing you need to equip yourself with is a financial plan. Hire a certified local financial planner to help you manage your financial life. That’s the best way to avoid mental health caused by financial problems. 

The post 9 Ways Money Is Affecting Your Mental Health appeared first on Financial Planning Magazine.