In the news

Banks… If You Can’t Beat Em Join Them

Posted:05.17.2012

So the banks are the focus of a traditional post RBA rate movement ‘bashing’ which is understandable as Australian’s will generally be effected in some way or another because they either

1/ have a home loan

2/ have savings account or a term deposit

3/ are a shareholder

Now banks provide a service and Australian banks are as strong as any in the world which was demonstrated through the GFC as other banks around the world were defaulting. Now as per any other business, banks are out there to make money for their owners, ie their shareholders of which many Australians are either directly or through their superannuation funds and if you are not all in cash or self manage your fund the chances are you are invested in them as well.

But just as a business like your local supermarket, they have a product to sell. To enable them to have this product to sell they need to buy that product and the difference between how much they buy the product for and sell the product for is their margin which the use to generate a profit which they can then return to their owners/shareholders. The banks product is however lending money, so to lend money they have to buy money…… to buy money the banks can do several things, one of which is borrow it from depositors, ie savings accounts and term deposits for a certain interest rate and then lend that money out at a different  interest rate. The difference of which is the margin they keep for the service.

Competition among the banks for the consumers money ie term deposits and debt will push this margin down and ensure the consumers win but the banks will also always try to keep this margin at a suitable level to keep their owners/shareholders happy.

The trick is to remember that when all this noise is out there – the effect of how the bank reacts to reserve bank cash rate changes will differ for each person, depending on whether you are a borrower, depositor or shareholder.

How do interest rate changes affect you?

Alisdair Barr is the founder of Future Map, a dynamic financial literacy program focused on building life planning and financial literacy skills in the workplace. Having held senior leadership roles for the last 10 years at Commonwealth Bank of Australia, he is passionate about reducing complexity and helping to map out a better future for all Australians. More from Alisdair on www.futuremap.com.au

Posted in Financial Tips and Treasures, General Tips and Treasures, In the news, Miscellaneous whispers, Other Contributors, Tips and treasures | No Comments »

It All Starts With A Plan

Posted:09.13.2011

This article was published in the Department of Primary Industry’s Rural Women’s Network Spring 2011 Newsletter

Increasingly, young women are acting on their desire to live their dreams whilst learning skills to be financially astute. The 10thousandgirl campaign helps young women gain confidence, clarify their plans and learn the basic financial principles to support their goals.

With the fast growing independence of young women, over the next three years the 10thousandgirl campaign aims to support 10,000 young country-based women to live their dreams whilst being financially astute. As part of programs being run in 100 communities across Australia, a special sponsored workshop series was run in Scone and Merriwa over April 2011 in conjunction with Albury based style and image consultant Sandra Martin. The workshops were organised by Caroline Long and supported by the Department of Primary Industries. Here’s what two of our workshop participants had to say …

Allissa, aged 28
Why did you attend?
I attended the workshop because I had been afraid of looking at how to manage my money for a long time. I believed that money controlled my life, that I would never understand how to manage money and therefore made poor life choices because I felt defeated around finances. I was tired of living scared, so it was time to get some education and learn some tools to make money flow for me, not let money hinder my life flow.

What did you hope to get from the day?
Tools for my tool box!

What did you learn/how did you benefit?
My money matters were de-mystified, the clouds began to clear and I began to see my dollars a little clearer.

What actions have you taken since the workshop?
I am currently charting my spending and am in observation mode as my needs change.

What are your ‘words of wisdom’ for other girls looking to get their plans and personal finances on track?
Just go for it! Start somewhere, get brave, find a financial advisor or a 10,000 girl! and ask just one question important to you around money, the answers will come and then they will just keep coming and before you know it you’ll be feeling more and more confident and be having loads more fun with your finances.

What are your next steps?
I would like to look at getting a 10thousandgirl GIG (Girl Investment Group) together in the Newcastle area. I am really interested in getting some of this amazing information and education out to women who are or have been in situations of domestic violence. A big question on my mind right now is how to get the same learning and confidence around finance to women before they get to their ‘final straw’ in abusive relationships.

Phoebe, aged 26
Why did you attend?
Although I am a fairly good saver, anything that involves maths/numbers is not my favourite thing so I procrastinate over these things and annoy myself that I’m not doing more to take charge of what I spend.

What did you hope to get from the day?
I wanted to find ways to make financial stuff not so daunting. I also wanted to learn about what financial advisors do and whether I should visit one.

What did you learn/how did you benefit?
I learnt the difference between accountants and financial advisors. I got some tips on how to manage my money. I got inspired by what other women are doing to take control of their finances.

What actions have you have taken since the workshop?
I got together all the information on my super accounts so that at the beginning of the new financial year I can consolidate them into the best performing fund. I have outlined payment schedules for all outstanding debts and worked out when they will be paid off. I have spent my savings on a trip to Africa!

What are your ‘words of wisdom’ for other girls looking to get their plans and personal finances on track?
Get your finances under control because you’ll be amazed at the great things you can do with all the money you save! Plus it’s the small purchases that really eat up your money, by putting together a budget you realise just how much you spend on the small impulse purchases like an extra drink, ice-cream, chocolate. I’m not saying you have to stop purchasing these, we still need treats but when you realise you’re spending a hundred dollars or more a month on these you might not be so peckish!

What are your next steps?
I’m off to use my savings to explore the world – Africa!

The aim of the 10thousandgirl Campaign is to ensure every young woman 15-40 years:
- Has a plan for her life (dreams and goals that are written down)
- Has minimum 3–6 months wages in accessible savings
- Has relevant insurance in place
- Is learning to plan, save and invest for a self-funded retirement
- Is doing what she loves each day
- Is contributing to our world’s broader economic prosperity and wellbeing

10thousandgirl creates economic improvement for women through providing light hearted and engaging educational resources and programs in safe accessible environments, including; a 12-month Personal Finance Program delivered via bookclub like GIGs (Girl Investment Groups), one-day Life Planning Workshops, one-hour School Talks, Workplace and Community Presentations and an online resource hub.

Our goal is to raise $1 million to support women in developing countries to launch their own business … this is the ripple effect.

With every two Australian girls who go through the 12 month ‘GIG’ program, a micro loan is provided to a woman in a developing country to start or support a business and lift herself out of extreme poverty. This element of the program is to raise awareness around the fact we live in a global economy, and show that as individuals, when we step up, we increase our capacity to assist others. It’s a ripple effect!

10thousandgirl is supported by the Australian Government’s Office for Women and Economic Security4 Women, providing bursaries for women living in marginalised positions in Australia to take part in the programs. See our website for information on how to apply: www.10thousandgirl.com/apply-for-a-bursary

As part of the tour around 100 regional centres across Australia, the campaign is looking for financial planners, accountants, mortgage brokers, property professionals and interested womens and community groups to assist in running programs in the following areas: Canberra, Bathurst, Orange, Young, Dubbo, Tamworth, Armidale, Singleton, Newcastle, Alice Springs, Barkly Tablelands, Wagga Wagga, Albury, Wodonga, Ballarat, Bendigo, Geelong and Melbourne.

To participate in or assist with an upcoming event in your area, visit the website: www.10thousandgirl.com or contact Zoe Lamont at zoe@10thousandgirl.com or
on 0419 622 968.

Posted in Campaign progress, In the news, Regional Australia | No Comments »

The Daily Telegraph: Teens on the money

Posted:06.13.2011

UNLIKE their Generation Y predecessors, today’s Aussie teenagers appear to be a thrifty lot with a sensible grasp of the power of money.
This could have something to do with growing up amid the global financial crisis, which began in late 2007 and is still affecting financial markets and households today.

But they are not all as money-wise as they could be, having also grown up in a credit-happy world that has given them a strong appetite for debt.

One of the biggest financial concerns for young Australians is ensuring they get to adulthood without a bad credit rating, Veda Advantage spokesman Chris Gration says.

The latest survey by Veda found that 18 to 19-year-olds are less likely to pay off credit cards in full than the general population.

They are also more likely to miss a credit card or mobile phone payment.

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“One of the key things they need to have is an understanding of their credit file, but only 12 per cent have either a partial or full understanding of what a credit file is,” Gration says.

“When you combine that with their missing payments, they don’t realise that these end up as defaults on their credit file which can last well into the future.

“Many don’t understand the consequences of not paying their bills, which means a good proportion are setting themselves up for problems.”

A groundbreaking survey by research organisation Habbo in 2009 found that Aussie teenagers were among some of the most knowledgeable at managing their money.

Habbo regional director Jeff Brookes says the typical 12 to 18-year-old had strong convictions about paying bills on time and did not like owing money to anyone – including their parents.

The survey found that about 54 per cent of teenagers used their bank accounts for saving money, not just for spending. Of those, 35 per cent were saving for a tech gadget, 32 per cent for a car, and 21 per cent for clothes and education.

Teenage sisters Hannah and Elizabeth appear to be examples of the growing financial knowledge of young people. Both have just completed a financial workshop designed for young women to help boost their understanding about money and personal finances.But the girls already had a good grounding from their parents, who for the past two years have included them in discussions about household budgeting and family finances.

Mum Tania Sanders has also been increasing her own knowledge about wealth creation and she has passed this on to the children, including through a board game called Cash Flow that the family plays.

“There are a lot of assumptions made about our society,” Sanders says. “Sometimes it seems a bit of a rat race.”Our financial system seems to be set up so the majority of people have it ingrained in them that they have to get a job, pay off a house over 40 years and that’s it. There’s not a lot of literacy about becoming independently wealthy.”

After attending the 10thousandgirl workshops, both sisters, who are still at high school, want to get part-time jobs.

“The workshop was really inspiring,” says Hannah, 15. “It makes you really understand how money works.

Read more including tips for parents and teenagers

Publication: The Daily Telegraph
Published: Monday, 13 June 2011
Journalist: Karina Barrymore

Link to full story

Posted in Campaign progress, In the news | No Comments »

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    Banks… If You Can’t Beat Em Join Them

    17th May 2012

    So the banks are the focus of a traditional post RBA rate movement ‘bashing’ which is understandable as Australian’s will generally be effected in some way or another because they either 1/ have a home loan 2/ have savings account or a term deposit 3/ are a shareholder Now banks provide a service and Australian [...]

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