Choosing a better job
There are many factors to be taken into account when moving to a new job such as;
- Hours worked
- Working environment
- Career prospects
- Do you enjoy the work you do?
- Will you be trusted, valued and challenged?
- Does the new employer’s values align with yours?
- Does the new employer offer a good work-life balance?
Most people focus on the money and even this can be misleading. As the calculator shows if the new job pays more but demands longer working hours or working more days then the extra pay can be quickly eroded.
For example, the benefit of increasing your salary from $70,000 to $90,000 can be erased simply by working 2 extra hours a day. These two also impinge on your work/life balance by intruding on time you would have otherwise spent with friends and family.
There are a number of debt reduction strategies
Lowest balance first
This strategy gives you the psychological benefit of seeing debts disappear quickly. It is sometimes referred to as the ”snowball” effect. You will probably pay more interest than you would by attacking your ”high interest” loans first.
Highest interest first
Attacking your high interest loans first will reduce the amount of interest you pay. This will normally be the better strategy .
Repaying the minimum
There is often a minimum repayment demanded by the lender. Paying the minimum can result in the debt taking decades to repay. If cash-flow demands you can only repay the minimum then paying occasional lump sums (perhaps an annual bonus) can substantially reduce the repayment period. This is known as ”snowflaking”.
Personal debt in Australia
The Reserve Bank of Australia or the RBA has determined that most of the debt Australians carry is for mortgages, loans and credit cards. These debts are worth over $1 trillion AUD and equals around $80,000 for every Australian adult. This is higher than any other citizen in the world.
Cost of travel
- Planes, boats, trains, cars and buses: Its hard to predict exactly how much you would use of each but try. It could be useful to keep track of your costs and measure them against your predictions.
- Entertainment and sightseeing: Shows, landmarks, museums and sightseeing.
- Bars, coffee shops, wine-bars and restaurants: This can be a surprisingly expensive item. Alchohol and restaraunts can be especially expensive.
- Food: To keep costs down you will probably do some of your own cooking.
- Clothes: You will probably get some new clothes for the trip which can include specialised gear like wetsuits and sleeping bags.
- Vaccines and visas: You will need visas and its wise to be properly inoculated.
- Internet and phone: You will want to stay incontact with friends and family. Free internet is pervasive but be careful about the costs of global roaming.
- Costs of borrowing: If you are travelling on borrowed money this could be a significant item.
Do I have enough critical Illness cover?
In 2011 the government put out the following average living costs in Australia – Visit Living costs in Australia;
- Hostels and Guesthouses – $90 to $150 per week.
- Shared Rental – $85 to $215 per week.
- On campus – $90 to $280 per week.
- Homestay – $235 to $325 per week.
- Rental – $165 to $440 per week.
- Boarding schools – $11,000 to $22,000 a year.
Other living expenses.
- Groceries and eating out – $80 to $280 per week.
- Gas, electricity – $35 to $140 per week.
- Phone and Internet – $20 to $55 per week.
- Public transport – $15 to $55 per week.
- Car (after purchase) – $150 to $260 per week.
- Entertainment – $80 to $150 per week.
The benefits of buying
The pride of home ownership.
- A good chance of enjoying capital growth.
- The family home is not counted when testing for the age pension.
- You are protected agains rental increases.
The drawbacks of buying
- More expensive in the early years than renting.
- You are vulnerable to high interest rates on mortgages.
- You are liable for the costs of maintenance.
- You are liable for the costs of ownership like council rates.
- You may buy in a place you can afford which could be a place you wouldn’t normally choose to live.
The benefits of renting
- Easier to afford living in a place you couldn’t afford to buy.
- No costs of ownership or maintenance.
- Easier to move to a place that suits you better.
The drawbacks of renting
- The rent you pay can never be recouped in capital gains. It is gone forever.
- Rent increases can be steep especially if there is a rental shortage in your area.
- There is no pride of ownership.
Most Australians harbour the dream of home ownership and this has led to them being the most indebted nation on the planet. Home ownership in countries like Germany, Austria and Switzerland is only around 50% or less.
There is some dispute as to what a wedding costs in Australia. ASIC’s Moneysmart website – ASIC’s costs puts the cost at around $36,200 while ”True bride” magazine puts the cost at around $28,830 – True Bride costings
ASIC’s costings are as follows;
- Food, alcohol and venue – $18,683.
- Wedding clothing and accessories – $4,271.
- Photography – $3,983.
- Entertainment – $2,896.
- Ceremony – $941.
- Flowers and decorations – $2,896.
- Other (Beauty, invitaions and accommodation) – $2,534.
According to ASIC this is how people paid;
- 18% used their credit card.
- 52% had help from their parents.
- 60% got a loan.
- 82% used their savings.
Who stayed within their budget?
- 43% stayed within their budget.
- 35% blew their budget.
- 18% didn’t have a budget.