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
- Job satisfaction
- Home/ Work balance
- Do your values align with the employer’s values
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. This is hard to predict but try.
- Entertainment and sightseeing. Bars, shows, restaurants, places of interest etc.
- Food that you prepare yourself
- Clothes and special equipment
- Vaccines and visas
- Internet costs – a rising expense
- The cost of borrowing
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.
Rent or buy
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.
A budget is one of the most important aspects of wealth creation. Try and create as much disposable income as possible and then divert it to savings, investments and paying off debt.
|Pre-school – varies from around $70 to $185 a day|
|Public schools – from $2,000 a year to $5,000 a year|
|Catholic schools – from $12,000 to $23,000 a year|
|Private schools – from $30,000 to $45,000 a year|
Costs will vary according to the standing of the school and whether it is based in a Metropolitan area or a regional area. Tertiary costs will depend on the course and whether you are an international student.