Mortgage | Financial Management 101

Mastering Your Money Mindset: How the Powerful Connection Between Managing Your Money and Unshakable Confidence Go Hand in Hand

Nov 17, 2023 | Building Emotional Muscle, Building Financial Muscle, Debt, Educational Series, Financial Management 101, Home Loan, Mindset, Mortgage, Relationships, Saving Money

How we handle money can have a big effect on how confident we feel, and the same is true in reverse.

Here are some ways that taking care of your money and having confidence are linked:

Financial success can boost confidence: Being able to manage our money and make money can make us feel good about ourselves and provide us with a sense of accomplishment. But having money problems can make us feel unsafe and lower our self-esteem.

Confidence can impact financial decisions: How confident we are can affect the choices we make about money. For example, if we are confident in our ability to make money, we may be willing to take more risks or start our own business. On the other hand, if we don’t feel confident, we might be more careful with our money and avoid taking risks.

Mastering Your Money Mindset: How the Powerful Connection Between Managing Your Money and Unshakeable Confidence Go Hand in Hand

How we think can have a huge effect on how well we do financially: With a growth mindset, we can learn and get better. This can help us solve problems with money and reach our goals. On the other hand, a fixed mindset can hold us back. This is when we think that our skills are fixed and can’t be improved.

Money can change how we feel about ourselves: How we deal with money can change how we feel about ourselves. If we judge ourselves by how much money we have, we might feel bad about ourselves if we don’t have as much as we think we should. If, on the other hand, we have a healthy relationship with money and see it as a tool to help us reach our goals, we can feel good about ourselves no matter what our financial situation is.

Managing your money, time, and confidence are all linked in the following ways:

Focus on what’s important: When it comes to handling your money, you should pay attention to what’s most important to you. Figure out what you value and what’s most important to you, and make sure your financial choices reflect that.

Use technology to your advantage: Technology is a strong tool that can help you keep track of your money and save time. Use apps and online tools to automate your finances, keep track of how much you spend, and make smart decisions about your money.

Money and building confidence: Taking care of your money well can help you feel better about yourself and what you can do.

Here are some practical ways to build trust by taking care of your money:

Learn about personal finance and investing: This will give you more faith in your ability to handle your money well. You can learn more about money by reading books, taking classes, and talking to financial experts like myself.

Take action: Taking action is one of the most important ways to build confidence. Start small by making financial goals that you can reach, like paying off debt or saving money for an emergency fund. As you reach each goal, you’ll feel better about yourself.

Keep track of your progress: Keeping track of your progress can help you feel more confident in your ability to manage your money. Join programs like my “know your money” program which starts with understanding where you are financially so you can build on from there.

Celebrate your financial wins: No matter how small, celebrating your financial wins can help you build confidence and energy. Give yourself a small reward for reaching your financial goals, and use that good feeling to keep going.

By implementing these practical tips, you can improve your ability to manage your money and build confidence. Remember that building these skills takes time and effort, but the payoff can be significant in terms of your financial and personal well-being.

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Struggling with the high cost of living?

Oct 31, 2023 | Building Emotional Muscle, Building Financial Muscle, Debt, Financial Health, Financial Management 101, Mindset, Mortgage, Relationships, Saving Money, Self Development

Here are 9 ways to make your dollar go further and relieve some stress.

If you are looking for ways to tackle the rising cost of living, here are some things you can do TODAY to put money back into your pocket. Every dollar saved can make a difference!

As life changes, you need to review the major expenses in your household and see if you’re paying for things that you needed years ago but don’t now.

1. Take a look at your major costs.

When times are tight, it can make a world of difference to take a look at your subscriptions, recurring payments, gym memberships, and even your home, car, and health insurance. We recently went through the process of reviewing all our insurance policies, and we were actually surprised that we were able to save money and cut down on areas where we were over insured. As life changes, you need to review the major expenses in your household and see if you’re paying for things that you needed years ago but don’t now.

2. Look at how you’re paying for things.

You could save money in the short term by switching some of your subscriptions or payments from monthly to yearly, or you could temporarily reduce your spending by putting these items on hold to free up some cash in the short term. Once you have more surplus cash, go back to yearly payments for subscriptions, as you can get a deal or save by paying for the full year.

3. Check your home loan rate.

If you want to save money, your home loan is a great place to start. Now is the time to review your home loan if you haven’t already. There are many features within your home loan that can make a BIG difference to the interest portion your bank or lending institution charges at the end of the month. One example is that if you have an offset or redraw facility, learn how to maximise to take full advantage of how using these can save you money on your regular mortgage repayments.

4. Review your online streaming services.

I often review my online streaming services to see if we’re using them as often as we think and a month back cancelled those that I barely used. There are so many out there, and do you really need them all? By cutting down on one or two, you could save up to $20 – $30 per month, and that’s a big saving when money is tight. So think about canceling subscriptions to some of the streaming services you no longer regularly use.

By cutting down on one or two subscriptions, you could save up to $20 - $30 per month, and that’s a big saving when money is tight.

5. Cut down on take-away food

One of the biggest expenses for most households is buying takeout. Take away food outlets are a time saver for busy people, but they are one of the biggest expenses in many households. By saving $50 – $100 per month and not buying takeaway food, this can make a huge difference to your bank balance and can be used to pay down potential credit cards or other debt, which in the end will enable you to have more cash flow.

6. Plan your meals and think outside the box.

Sorry to be the bearers of bad news, but it is true: sticking to a reasonable meal plan can save you dollars at the checkout. Make a week long menu with everything from breakfast to dessert planned out, and include the family in what they’d like to eat. By getting them involved in the process, they are more likely to enjoy the food you’re cooking. Make it a family event and teach your kids the power of saving by preparing and cooking meals the whole family will enjoy. Cook a little extra and freeze it, so on the days when you don’t feel like cooking and want to order take away, you can grab what you cooked the week earlier for dinner or lunch.

7. Shop for groceries online.

You can stick to your budget and meal plan when you shop for groceries online. Wednesday is a good day to shop at the supermarket because that is when many stores update their weekly specials.

8. Look at separate spending and savings accounts.

With your regular bills, put aside a set amount for your ongoing expenses into a separate account and have them directly debited from that account so they are paid automatically without you having to think about it. All you need to do then is put regular money into that account at payday to ensure the amount is in there when the bills are due.

By having a separate spending account for bills, this stops you regularly dipping into your savings for non-essentials

I have more information on how to manage your spending and savings and you can find this in the “Learning Hub” at financialmanagment101.com.au

9. Compare petrol prices

And last but not least, the costs of fuel today are so high that it’s sucking every dollar from you just to fill up your tank today!

There are apps that you can get on your smart phone to check daily fuel prices, so I would encourage you to do this when your tank is around ¼ – ½ left to go, so you don’t fill up at the last minute and have to pay a higher price.

Want more help managing your money? Then check out this course that helps you budget and save your hard earned money.

Use apps that you can get on your smart phone to check daily fuel prices.

Mastering Budget and Savings Techniques by Karen G Adams - Financial Management 101

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How to know if you are home loan ready?

Oct 31, 2023 | Book of the Week, Building Financial Muscle, Debt, Educational Series, Financial Health, Financial Management 101, Mortgage, Saving Money, Self Development

So you want to buy your first or even second home…but not sure if you are Home Loan ready?

Here are 8 “Must HAVES” in place to ensure you are home loan ready before applying for a home loan.

STEP 1: Your Income

If you’re looking at changing your job, DON’T until you have been approved for the loan and setted on your new home.
If you are on probation, you will need to wait until you’re off probation before a lender will consider you for a home loan. There are exceptions to this and will depend on your current employment and work history.
Ensure your payslip represents the income you are earning, including the year to date figure, as lenders will look at this figure to calculate your annual income.
If you are self-employed or looking at setting up a business, lenders will require 2 x years financial history plus 2 x years tax returns to verify your income. There are exceptions to this, if you have started a busines and going doing the same work as when you were a PAYG employee, reach out and I can explore lending options.

STEP 2: Your Deposit

Have you saved up a minimum 10% deposit, or have you saved up more?
Or are you looking to use the equity in another property to fund the next purchase?
➤ This can be done if your property is worth more than the outstanding debt owing.
➤ A quick and easy way to check this is to obtain a valuation on your home.
➤ As a mortgage broker, I have access to free valuations, so I am able to assist you with this.

You will require generally a minimum 10% – 20% to be able to afford getting into your own home as there are costs associated with purchasing your home for eg; govt costs as stamp duty, property registration costs, possible lenders application fees and settlement costs. However, there are exceptions to getting into your own home with as little as a 5% deposit, reach out so I can expand and explore you own personal circumstances.
Does your bank account statement demonstrate to the lender that you have savings? As they check over a minimum 3 x months bank statements to show genuine savings?
➤ One option a lender will look at if you haven’t been able to save the full deposit is paying rent and having a lease agreement in place. Some lenders consider this, as it can show you are able to meet your regular liabilities on time, which is what they are looking at when looking to loan you money.
➤ Another option is that if you haven’t been able to save up the minimum deposit required, gifting is acceptable with the majority of lenders. Gifting is where a family member provides a cash amount to assist with obtaining a home loan and does not expect this to be paid back. Lenders will require a stat dec (statutory declaration) signed by the person giving the amount to verify this is a gift and not a loan.

STEP 3: Check Your Credit Report

You will want to look over your credit file to ensure there are no nasty surprises, and when it comes time to assesing your loan, if your score is low or there have been any missed payments on any bills or liabilities, they will pick up on this and may stop your chances of obtaining the loan.
Checking your credit report is easy and free to download from one of the credit check companies online.
Or alternatively, you can request a copy of your credit report from me and I will look over it for you to ensure your chances of getting your loan are not decreased.
At the end of the day, lenders are looking for good credit conduct and seeing before they decide to loan you the money that you are able to pay your bills and other commitments on time.

Checking your credit report is easy and free to download from one of the credit check companies online.

A low credit score or any missed payments on any bills or liabilities may stop your chances of obtaining the loan.

STEP 4: Bank Statements

The majority of lenders will look through your bank statements line by line to see how you manage your money.
They are looking to see your spending habits as to whether there is money left at the end of your pay period and verifying whether there is more going out than staying in your bank account.
They will require the last 3 months of statements, so make sure they look clean and have no surprises for a lender who will question why something doesn’t appear to look like a normal transaction on the statement.

STEP 5: Identification Verification (ID)

Lenders will require a minimum 2 x pieces of identification to verify who you are, and the ID will be in the form of:
➤ A current Drivers License
➤ A Current Passport and/or
➤ Birth Certificate, and
i. Any visas, if not an Australian Citizen or Resident

STEP 6: Your Borrowing Potential

Your borrowing potential looks at whether you can actually afford to purchase the new property and this is where your deposit comes into the equation.;
It looks at the purchase price of what you are looking to buy, plus the costs to purchase and get into the property, less your deposit, which equals the actual percentage of how much you’re looking to borrow.
➤ Where you are borrowing less than <80% from a lender, you will not incur lender mortgage insurance, or LMI, as it’s known.
i. LMI is the lender’s insurance policy in case something occurs during the term of the loan and protects the lender’s investment in loaning you the money.
ii. There is an additional cost added to the loan when in LMI territory, ie; borrowing more than 80%
➤ If your borrowing potential is higher than 90% and even up to 95% then this may limit the lender’s choices available to you, as some lenders do not loan above 90% – 95% (including LMI), while others put a premium on their interest rate for loaning above 95%
➤ So if you are considering a loan, it is best to save as much as you can to access a lower interest rate and lower costs of getting your loan.

STEP 7: Your Affordability

At the end of the day, are you applying for a home loan that you can really afford?
Lenders take careful consideration when you apply for a home loan to ensure you are not going to go into mortgage stress
When a lender considers you for a home loan, they factor in higher interest rates and higher monthly ongoing living expenses, as during the loan term interest rates may rise and the ongoing costs to live increase throughout the years.

STEP 8: Consult With a Specialist Mortgage Broker

As a Mortgage Broker, it’s my job to assist you in successfully being eligible for a home loan.
I have the tools and resources to work out if you are home loan ready, and;
It’s my job to ensure it goes as smoothly as possible so that, at the end of the day, you get your home loan.

Are you home loan ready?

Buying your first home is a BIG and important step in your life. Learn 8 essential must-haves in this guide that will help you in becoming home loan-ready before applying for a home loan. Get your free copy today!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent

Your Step-by-Step Guide to Being Home Loan Ready - Karen G Adams of Financial Management 101

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Flat Chat: Why Units Could Soon Become Hot Property

Oct 27, 2023 | Book of the Week, Building Emotional Muscle, Building Financial Muscle, Debt, Financial Health, Financial Management 101, Home Loan, Mindset, Mortgage, Self Development

Could a smaller dwelling be a solution for you, with apartments, units and townhouses widening their appeal in the property market? If you’re considering your options, reach out to discuss your situation today, there could be a rewarding solution for you!

Apartments stand out as an affordable choice when it comes to cracking the property market, not to mention downsizing. But a looming shortage may soon push unit values higher.

For many of us, buying a house on its own block of land is the ‘great Australian dream’. While plenty of people achieve this goal, our property journey is often book-ended by apartment living.

For first home buyers, units can be an affordable choice, costing around 30% less than houses according to CoreLogic.

Then, as we head into our senior years, an apartment offers secure, low-maintenance living, often with a wealth of amenities right on the doorstep.

Apartment demand is outstripping supply

Apartments may be affordable today, but a lack of new apartment construction, coupled with rising immigration levels, points to a looming apartment shortage according to CoreLogic. And that could push values higher.

Over the next few years, new apartment construction is forecast to be 40% lower in the 2010s, leading to a shortfall of over 100,000 homes by 2027. Close to 60% of the new home shortfall is expected to be in the apartment market.

On the demand side, CoreLogic says a stronger-than-expected level of migration into Australia has seen overall housing demand “skyrocket”. Historically, new migrants head to the high-density areas of our big cities, putting extra pressure on the unit market.

As CoreLogic explains, with interest rates potentially easing in 2024, greater demand and tight supply could fuel a “price boom” in the unit market.

Why more of us are choosing apartment living

Modern apartments are packed with the latest design and sustainability features, meaning they are no longer the poor relation of freestanding houses.

Across our major cities, apartments now account for 30% of all homes, up from 23% in 2010. And the appeal doesn’t just lie in affordability.

Today’s apartments usually come with a wealth of benefits, including:

Government Schemes: because apartments are generally cheaper than houses, they’re more often under the price caps for a range of government schemes, including the Home Guarantee Scheme, stamp duty concessions, and first home owner grants (usually for new builds). These schemes can be combined to potentially save you tens of thousands of dollars and get you into the property market years sooner.

Sought-after Locations: apartment living can be the difference between living close to work, or facing a long daily commute from the outer suburbs.

Lifestyle Advantages: the days of apartments being cramped and lacklustre are over. A variety of on-site amenities, from barbecue areas to pools, gyms and car-wash bays, make unit living convenient and relaxing.

Low maintenance Living: not interested in spending precious spare time mowing the lawns or cleaning the gutters? It turns out plenty of others aren’t either. Unlike houses, units require minimal upkeep, letting residents enjoy more quality time.

Improved Security: if you’re after a lock-and-leave lifestyle, modern apartments fit the bill. Advanced security features add up to a safe and secure living environment.

Modern apartments are packed with the latest design and sustainability features, meaning they are no longer the poor relation of freestanding houses.

Is now the time to take the leap?

Right now, apartments still present an affordable option for first-home buyers, downsizers and investors.

The median apartment price across our state capitals is currently $637,593 – but if CoreLogic is correct, that figure could soon increase as demand outstrips supply.

So if you’d like help exploring your options to purchase your first property – for example, with just a 5% deposit via the Home Guarantee Scheme – then get in touch today to discover your borrowing power.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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How to Help Someone With Financial Stress?

Sep 25, 2023 | Building Emotional Muscle, Building Financial Muscle, Debt, Educational Series, Financial Health, Financial Management 101, Home Loan, Mortgage, Saving Money, Self Development

Supporting someone with money stress can be challenging because they may be resistant to accepting help or discussing their financial difficulties with you.

Often people don’t want you to know they are struggling because of judgement, but this is the time to be the friend or family member to support them. There is always a way out and often they can’t see that due to the stress they are experiencing.

Sadly some people feel the only way out is to leave this earth and that only leaves the loved ones behind with sadness and more stress than ever before.

Simply checking in with someone, taking them out for coffee, and listening to how they are doing can go a long way toward helping and being the supportive person they need.

Here are some ways to help them while still giving them space to maintain their dignity:

LISTEN ACTIVELY

Start by being a good listener. Let them talk about their financial concerns and stress without offering advice or judgment. Sometimes, just having someone to vent to can relieve some of the emotional burden.

YOU CAN HELP WITHOUT GIVING MONEY. YOU CAN SHOW YOUR SUPPORT IN OTHER WAYS.

Offer your time, company, or help with things that do not cost money, like doing chores around the house, running errands, or giving emotional support during hard times.

PUT AN UPBEAT SPIN ON ANY DISCUSSION OF MONEY AND ALWAYS ASSUME THE BEST.

You could say, “I have been looking into some great financial resources that I think could help anyone, and I thought you might find them interesting,” instead of “You need help with your finances.”

RESPECT THEIR PRIVACY.

Give them space and privacy when it comes to their finances. Do not ask them too many questions or force them to talk more than they want to.

MAKE MONEY PROBLEMS MORE COMMON BY TELLING STORIES OR GIVING EXAMPLES OF PEOPLE WHO HAVE HAD MONEY PROBLEMS AND GOTTEN THROUGH THEM.

This can show them that many people have trouble with money and that asking for help is not a sign of weakness.

BE PATIENT.

Know that it might take them some time to open up or accept help. Wait your turn and let them lead the conversation and decision-making.

OFFER HELP WITHOUT BEING OBVIOUS.

If you find articles or financial resources that could help, share them in a quiet way. You can send them an article or a link instead of talking directly about their money.

SUGGEST PROFESSIONAL GUIDANCE.

If you believe they would benefit from professional financial advice, make a non-confrontational suggestion. You might say, “I know someone who is really knowledgeable in this area. Would you be interested in talking to them? It might give you some new insights.”

AVOID OFFERING FINANCIAL ASSITANCE.

Do not give them money directly unless you are sure it will not hurt your relationship or encourage them to act irresponsibly. Instead, focus on helping them feel better and giving them information.

EXPRESS YOUR CONCERN.

Tell them you care about their well-being and are ready to help them in any way they feel comfortable. Make it clear that you are not judging them, but that you care about their happiness and health as a whole.

STAY SUPPORTIVE.

Keep being there for them, even if they do not accept your help or ideas right away. Let them know that you will always be there for them.

It is important to give them their independence and let them decide for themselves what to do with their money. You can give them help and resources, but in the end, they have to be ready to take steps on their own to deal with their money stress.

Your patience, understanding, and willingness to not judge them can go a long way toward helping them get through their money problems.

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Which Comes First: Emergency Fund or Paying Off Debts?

Sep 21, 2023 | Book of the Week, Building Emotional Muscle, Building Financial Muscle, Debt, Educational Series, Financial Management 101, Home Loan, Mindset, Mortgage, Saving Money, Self Development

When money is tight, it can be hard to pay down debt and build up an emergency savings fund at the same time. But it is still possible with careful budgeting and good money management.

Here’s a step-by-step plan on how to do this:

1. ASSESS YOUR FINANCIAL SITUATION

Start by looking carefully at your money. Write down everything you earn and everything you owe, including the balances, interest rates, and minimum monthly payments.

2. MAKE A BARE-BONES BUDGET

Make a simple budget that covers only the most important costs, such as housing, utilities, groceries, transportation, and insurance. Cut back as much as you can on spending you do not have to.

3. PAY OFF HIGH-INTEREST DEBTS

Pay off your debts with the highest interest rates first, as this will save you money in the long run. All debts should have the minimum payment made, but any extra money should be put toward the debt with the highest interest rate.

4. SET REALISTIC GOALS

Find out how much you can afford to put toward debt repayment and savings each month. Be careful and make paying off debt your first priority.

5. BUILD A SMALL EMERGENCY FUND

Even though it is important to pay down debt, having a small emergency fund can help you avoid going deeper into debt if you have to pay for something unexpected. Start with a small goal, like $500 or $1,000, and slowly raise it as time goes on.

Having a small emergency fund can help you avoid going deeper into debt if you have to pay for something unexpected.

6. USE WINDFALLS/UNEXPECTED MONEY WISELY

If you get money you did not expect, like a tax refund or a bonus, put some of it toward paying off debt and some into an emergency fund. This helps you move forward in both areas.

7. SAVE AND PAY OFF DEBTS AUTOMATICALLY

Set up automatic transfers to your emergency fund and to your debt payments whenever you can. This makes sure that you always move closer to both goals.

8. LOOK FOR WAYS TO MAKE MORE MONEY

Look for ways to make more money, like part-time work, freelance gigs, or selling things you do not use. The extra money can be used to pay off debts and save money.

9. TALK WITH YOUR CREDITORS

Talk with your creditors about your money situation. In some cases, you may be able to negotiate lower interest rates, lower minimum payments, or a delay in payments to make it easier to handle your debt.

10. REVIEW AND ADJUST REGULARLY

Check in on your budget and financial goals every so often. Change how you pay off debt and save money when your income and expenses change.

11. CELEBRATE MILESTONES

Celebrate your successes, no matter how small they are. Every dollar you save in an emergency fund or pay off of a debt is a step toward financial stability.

Remember that building an emergency fund and paying off debt are long-term goals. It’s okay to progress slowly if your income is limited.

The important thing is to keep working toward both goals, even if progress is slow. Your money situation will get better over time, and you will have a stronger financial base.

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