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Emergency Business Loans – Risk vs Reward

As we find ourselves in the middle of a global health crisis brought on by COVID-19, there comes a point where protecting physical health comes at the expense of our financial health. Employees at risk of carrying the virus are being forced to stay home. Spending habits have completely changed. The stock market has crashed. The list goes on… But what does this mean for your business? Cashflow is likely to be stretched within any company at this time, particularly within business start-ups. If you don’t have much money in the reserves then how can you keep your business afloat if the worst does happen? Emergency Business Loans can provide a fast source of income for when things don’t go to plan. This sounds great, but what are the risks?

What Are Emergency Business Loans?

Emergency business loans can provide a fast source of income to give your business the cash injection it needs during tough times. They are usually granted quickly and you don’t always need a great credit score in order to be approved. But they do often come at a cost, including higher interest rates than a standard loan. Emergency loans come in many forms. These include unsecured personal loans, credit card cash advance loans, payday loans and even pawnshop loans.

Emergency personal loans

The great thing about emergency business loans is that they can be processed extremely fast. You can expect to receive an emergency business loan within days of approval. Depending upon your credit score, you might qualify for an unsecured personal loan. This means that the loan will not be secured against any assets, such as property or a motor vehicle. Personal loans usually have fixed interest rates and can be paid back over a set period of time. Before taking out an emergency personal loan, you should first ensure that you will have the funds available to pay it back, otherwise, you will wind up in a worst financial position than you started in, along with your credit history taking a battering.

Emergency cash advance loans

It is possible to use the remaining balance on a credit card to take out as a short-term loan. This will mean a higher interest rate than normal and this rate will also be relative to how much you take out. So be wary of how much you do borrow via a cash advance loan.

Emergency payday loans

Unless you’re expecting an influx in cash in the very near future but are in a desperate and immediate need for cash to tie you over, for the time being, a payday loan is a risky option. APR’s can be as high as 400% and need repaying in full, rather than in instalments. This should be a last resort option. It’s easy to become trapped in an endless cycle of re-borrowing in order to pay the last payday loan off.

Emergency pawn loan

Another last-ditch option here. You can have personal items valued by a pawnbroker, of which they will use as security in order to back the loan. And if you find yourself unable to repay the loan, your pawned item will be listed for sale.

Are There Alternatives to Emergency Business Loans?

Your personal credit score will not be affected by your business loans. Nonetheless, you still need to submit your personal credit rating. You also need to prove your revenue for a year or two. Banks have tightened their lending criteria in recent times and often require financial history or in-depth account records to assess the capacity of the business to handle their financial obligations. This means that applying for emergency business loans through a bank can be a tedious, time-consuming process. For this reason, if you need funds fast, then banks aren’t a great option.

Emergency business loans may come at a higher cost for borrowers with no proof of income and a poor credit rating. When this happens, it is advisable to search for other options. Here are two alternatives which could help you establish or maintain your business especially when there is an urgent need for funds:

Line of Credit

Do you have a business account with a bank, but don’t qualify for its traditional business loan? You can apply for a line of credit instead. A line of credit enables you to access extra money whenever you need it. This is because they don’t have a fixed term, unlike personal loans. So, you can use it without applying for another loan. You also only pay interest on the amount you have borrowed, not your entire credit limit. However, usually, interest rates are usually variable with lines of credit, meaning that they can fluctuate up or down. You also can’t expect a quick turnaround with a line of credit because it may take weeks before it gets approved. Yet, it can still be a very useful resource for future business emergencies.

Specialised Lenders

Specialised lenders like Australian Lending Centre cater to businesses that do not qualify for traditional emergency business loans. ALC understands that business must continue as usual despite any financial drawbacks.

Considerations Before Taking Out an Emergency Business Loan

If you want your business to keep operating, you need the right funding to pull you out of problematic financial situations. There are also some management decisions that require immediate cash to sustain growth and avoid serious fallbacks.

What are the things to keep in mind when applying for emergency business loans?

Determine the business’s needs and the amount you need to meet it

It is important to have a clear idea of what you really need before you sign the loan application form. It is very easy to lose track of what you intended to do from the start if you don’t have a clear understanding of your needs. Remember that the amount must not be greatly higher than your actual needs. When running a business, it’s important to remember that the costs must be lower than the profit. Otherwise, you will end up spending more than what you actually earned and your business will suffer.

Review your credit history

Have you missed or been late on some of your previous debt repayments? If so, why did it happen? Before you apply for an additional loan, make sure that you have a good budget in place to avoid repeating the same mistake.

Specialised lenders may offer bad credit business loans, meaning they can still approve your loan application despite negative credit history. But reviewing your credit file is good to practise. You may find that there are defaults or judgements which have been incorrectly listed. So, before you send your business loan application, make sure that your credit file is accurate and up to date. Companies such as Clean Credit are able to quickly and easily assess your credit file and repair it if required.

Study your financing options

Specialised lenders may offer better terms than traditional banks, especially if you don’t have a stellar credit rating. Review the company and its loan products, and compare them with other financing institutes. Check if the financing procedures are safe and secure and if you will be able to save more money in the process. It is also important to talk with the loan officer and ask about the details of the loan, including its comprehensive terms and conditions.

Always consider your business plan when applying for a loan – make sure that the amount you borrow and the financing agreement will support your plans. Use every cent you get to support your goals and to build a solid credit history so that you can quickly access business loans with better rates in the near future.

Emergency business loans from specialised lenders are usually approved between 24 hours and 7 days – so it is advised to create a budget before you send in your loan application. Not only will it ensure that you will use the money exactly as you planned, but it will also keep you from defaulting on your loan repayments.

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Financial Planning

Tips to Manage Financial Challenges

If you are in a difficult situation facing financial challenges, learning how to properly use loans, for bad credit applicants, can help.

Do you have a steady source of income which covers not only your needs but also your wants as well? If you’re one of the thousands of Australians who want secure finances but are also dealing with financial issues, you may be wondering how you can achieve that reality.

What Are Your Financial Challenges?

Like many individuals in serious debt, you are probably worried about trying to pay for your daily living expenses and outstanding debts, while wishing to buy a home, a car and probably take a vacation. If so, don’t ever think that you’re alone in this aspect. There are also many struggling parents who need to save for your children’s education while paying off debts and adults with elderly parents to support. And, things get worse when you are going through a divorce, dealing with a death in your family or probably looking for a substitute job for the one you recently lost.

The truth is that there are many events in life that test not only our ability to cope financially but to think positively and overcome these trials with a smile.

Use your financing options to manage these financial challenges

Learn how to take control of your finances, boost your borrowing power and secure a better financial life with the following tips:

Write down each of your goals

Are you really determined to pay off all your high-interest loans? Or do you just need to have a better credit rating so you can borrow even more? Sometimes, we don’t actually know what we want. We just keep on looking for solutions to our immediate problems without looking into their root cause.

For example, if you have $5,000 worth of debts, both in consumer credits and loans, do you trace back to the causes of those purchases? Or, do you simply skip the reflection aspect and look for better financing that could lower your interests so you can have more money to spend on your needs and wants?

While there is nothing wrong in looking for better deals, such as low-interest and easy to pay bad credit loans. Finding the root of the problem in your finances can help you make better decisions with regard to budgeting and balancing your sources of revenue.

Swap the present wants for future needs

Are you spending a few hundred dollars on things you can live without—such as a gym membership, magazine subscription and a trip to your favourite coffee shop? If so, think of how you could use the money to build wealth, like starting a retirement plan to secure your finances in later years.

The sooner you start saving for retirement, the more financially secure you can be when you finally stop working. These contributions are typically tax-deductible, so aside from getting a tax credit for starting a retirement plan, you can also grow your money faster because savings grow faster in a retirement plan as a result of tax-free compounding.  In the end, even small contributions can make a significant difference over time.

Diversify your investments

Do you know how to protect yourself against ignorance? Warren Buffet says that it is through ‘diversification’. Since you’re not really sure if an investment will appreciate over time, you should diversify your portfolio to ensure that your exposure to any individual asset is limited.

What are the asset classes that you currently hold?

Are you involved in alternative investments like real estate, or are you simply invested in stocks or bonds?

Instead of chasing performance for a single investment class why don’t you add a good mix of real estate, cash, bonds and stocks in your egg basket? This way, you can protect your financial portfolio from wreaking havoc when the market declines. If you put more than 15% of your money into a company’s stock, you may be heading for disaster. While you may not be thinking of the worst-case scenario, preparing for these things can help you when you lose your job and your other sources of income. Losing your investments as well, all at once is not an easy crash to bounce from.

Grow your wealth

One of the most important benefits of bad credit loans is that you can use it for wealth maximisation. Create a long-term investment strategy that requires adjustment in your personal budgeting and your appetite for risk. This helps to ensure that no major market glitch will pull your finances down. You never know what will happen tomorrow, but one thing is for sure… life goes on and with the right mindset and professional help, you can enjoy a comfortable and financially stable lifestyle.

Contact the Australian Lending Centre today and receive financial advice from our specialist loans team.

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Financial Planning Financial Fitness Short Term Loans

Starting a New Job? Here’s How Short-Term Loans Can Help You

Congratulations on your new job! Whether you applied for this job for experience, for pay, or both, here’s how short-term loans can help you get started on the right foot.

Cover Job-Related Expenses

If you were laid off, or you just started working for the first time in your life, you’ll eventually realise that you must spend money in order to keep your job. That means you need to get ready for job-related expenses, such as:

Transportation Costs

Your new job may require you to use your personal vehicle or take public transport for work-related reasons. Fuel and bus fares can be pretty expensive, especially if you’re travelling a long distance to get to the workplace. Since commuting may not qualify you for tax breaks, it is best to discuss the possibility of reimbursements with your boss for work-related travels. You can also enquire at the tax department about job-related tax deductions, should any of the allowable deductions apply to you.

Accommodation/Travel Costs

Does your job require you to travel to various places in order to find new clients or meet potential investors? If so, it is advised to discuss the travel expenses with your employer. If there is a delay between reimbursement can leave you out of pocket so short-term loans can help with this. Whether you will have to pay for it first and be reimbursed later or if they will provide the money upfront every time you travel. Just in case you’ll have to shoulder the cost first, you can rely on short term loans for quick cash. But, always remember to bill your employer so that you won’t have to foot the bill all by yourself. Otherwise, you need to shoulder it and apply for tax deductions for job-related costs later.

Work Wardrobe

Working in style doesn’t have to be expensive. If you have a uniform at work, things would be easier. But, if there’s none, you need to find creative ways to look neat, clean and a little bit stylish. Looking good and being comfortable can boost your productivity simply because you like what you are wearing and you’re proud of it. A short-term loan can help cover these initial expenses.

Look for discount stores that sell high-quality garments at low prices. Choose clothes that can serve double duty. For example, if you’re in the corporate world, buying black pants, skirt (for women) or a jacket would be a great idea. You can match it with a white shirt/blouse and black shoes. Purchase an all-weather coat and great fitting jeans. A tote bag can be very useful too, it can hold your work-related items and you can also use it on casual days. For $1,000 you could easily buy yourself high-quality outfits that last; these items will get you through the first few months of your new job.

Pay Your Existing Debts

Do you have a variety of debts? Perhaps you’re dealing with a car loan, mortgage or a credit card balance.

When you run up a large credit card balance, it won’t be easy to pay it off. The longer it takes you to pay off the balance, the more it can cost you.  Make sure that you pay at least the minimum required amount on time.   Defaulting on your debts will not only destroy your credit rating, it could mean additional interests and fees, plus increased risk of bankruptcy. While you’re starting on your new job, try to stay in control of all your loans – including your utility bills.

Set Aside Money for Emergency Needs

Put money aside for emergency needs so that you won’t be in a vulnerable financial situation when an unexpected expense hits you.

Set a Budget That You Can Live With

Nothing is more challenging than setting a budget without money to work on. If you would like to stick to a daily budget, get a short-term loan first, and consider it as your first salary. Create a daily budget out of that amount (make sure that you are basing it on the actual salary you are expecting to receive) and follow it. Plan your day and budget your daily meals, transportation expenses, utilities, recreational activities, etc. If you’re fond of eating out, perhaps it’s about time to eat healthy home-cooked meals. You might be too busy to cook on a daily basis, so why don’t you prepare your meals weekly? Stock your meals inside the fridge and simply heat them on the weekdays.

Australian Lending Centre can help employees achieve financial independence. Learn more about our short-term loans by making an enquiry today!

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Business Loans

Plan Your Business Loan With A Business Loan Calculator

Are you looking to take out a business loan? Do you want to have a ballpark of our debt service coverage? If so, using a business loan calculator can you help plan for the future of your business.

Business loans can be used to expand your trade to a new location, upgrade your facilities, or invest in other assets to increase the overall returns of your business. That’s why it is important to know the benefits and risks of taking out your loans. Would it be good for your business or are the risks not worth it?

Business loan calculator can help you if you want answers to the following questions:

  1. Which of my loan options is more suitable for my financial needs?
  2. How much will I pay for my business loan? It is important to understand the financial commitment of borrowing money before you sign the loan contract. Otherwise, you may be taking out an amount you can afford to pay for.
  3. What are my options? A loan calculator can help you compare your business loan options. If you can’t afford the payment terms, then you can think of other ways to make ends meet.
  4. Is my loan decision correct? It can educate you about the basics of a business loan, from monthly repayments to the total interest payable.

Australian Lending Centre has 4 types of loan calculators:

  • Loan comparison calculator: You can use the loan comparison calculator to compute the repayments you may have to make between two different types of loans. You can see how much you will be able to save if you choose one over the other.
  • Loan repayment calculator: How much will you repay every month?
  • Budget planner calculator: It helps you work on your budget.
  • Extra repayment calculator: It can show you how much you can save by making extra payments to your loans.

Second, while the calculation may not be accurate having a ballpark of your future financial obligations can help you plan your repayment and assess your capacity to do so.

For example, the budget calculator can help you come up with a workable budget to save more money, pay off more debts and invest more on assets to increase your returns on investments.

Businesses, even with the same size may not get the same amount of loan. One of the reasons for the discrepancy of the amount of loan is credit score. Lenders are not so excited to work with people who show signs of financial struggle because of the risk of not being paid back.

Third, it can help you decide if you need such lending product to build your business. If the interest rates and the lending structure do not match your capacity to pay; and other terms would be putting burden on your business, than liberate it, you can move on to another option.

Australian Lending Centre offers quick and easy-approval business loans to help you fund your business. Use our business loan calculators to help you make then right decision.

Call us and we will do our best to assist you!

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Financial Planning

How Quick Loans Can Help You Take Control Of Your Finances

If debt is a pervasive part of your life, and every now and then you are looking for quick loans, you are not alone. But, don’t you know that you can find your way back to a stable financial ground with good planning and a little bit of work? Learn how quick loans can help you take control of your finances.

People are in debt because…

There are many reasons why people get into debt. Some simply had to use it to deal with bad circumstances such as illness, accidents, divorce, and other financial setbacks; while others simply lack financial management skills and budgeting strategies.

Current stats on Australian debt:

Federal Reserve research shows that Australian households have a total of $2 trillion unconsolidated household debt. But, despite the increasing financial obligations, consumer spending in Australia increased to 23.8 AUD Million from July to September 2016. It is roughly a million higher than the 23.7 AUD Million consumers spending in the second quarter of the same year. These results could mean that household debt and consumer debt are increasing, as more people are willing to apply for loans, credit cards and mortgages.

So, how do you prevent debts from cutting into your paychecks? Well, you can increase your income, practice money-management tips and use quick loans to cover your immediate financial needs while working on it.

Strategies to help you take control of your finances

Make a workable budget that you can stick to:

You can start by jotting down your most urgent expenses and the overall cost of all other things you will use the money for.

  • Prioritize spending. You may be surprised that the thing you think you need most, is not even worth it.
  • Don’t forget to write down even the frivolous purchases
  • Keep track of your daily expenses, such as fare, coffee, food and other necessities
  • Check for alternatives. Can you pack lunch instead of buying take-out meals?
  • Set your financial goals. There’s a huge difference between financial dreams and financial goals. A dream is what you hope for, while a goal is something you planned to achieve. You plan it to make it happen. You don’t dream about it and allow things to flow in its natural course. Financial goals require action. You take an active part in its realization.

Create a list of the following:

  • Things you want to accomplish
  • The resources you will use to achieve them
  • Time frame
  • Cost
  • Action plan. Make sure that your plan will work considering your budget.
  • Repay your quick loans on time. When does the repayment date start? Include the date in your action plan. When you have a deadline to beat, you will have enough motivation to make yourself productive until it happens.

Do you need quick loans now? Where will you spend it on? Whatever is your reason in applying for a loan, the Australian Lending Centre is here to help you. If we helped thousands of Australians deal with their financial troubles, why can’t we do it for you? Call us now!

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Refinance and Refinancing

Refinancing Analysed: Pros and Cons

Refinancing can be a convenient option in many cases, regardless if you are hoping to get a better interest rate or attempting to consolidate your existing debts. However, it can prove to be pretty tricky in the long run, which is why you may want to learn everything about the refinancing pros and cons.

This option may be perfect for one borrower and a disaster to another. This is why you need to do your homework and read the points below before switching to another loan system.

When Refinancing is Beneficial

When it comes to refinancing pros and cons, there are definitely some benefits you can reap by making the switch. Here are the main ones:

  • Getting Access to Equity – You can use the equity you collected in your loan for other things such as investing, renovating, buying a new car or going on a vacation.
  • Getting a Better Rate – You can get a better interest rate by refinancing, which means that your payments will also be lower. This could, in turn, save you a lot of money.
  • Increase Your Mortgage Length – By increasing the length of your payment, you will have a smaller monthly fee. However, you may end up with a higher interest, causing you to pay more in the long run.
  • Decrease Your Mortgage Length – The same can apply in reverse if you reduce the mortgage length. Not only will you get rid of the debt sooner, but you will also pay less in interest than before.
  • Eliminate Fees – You can sometimes get out of paying certain fees by refinancing a loan. If your current loan has built-in fees for additional features that you may no longer need, a refinance may help you get rid of some of these charges.

Refinancing can be a great way to make your payments easier, but you need to be aware of all the refinancing pros and cons before proceeding.

The Drawbacks of Refinancing

Just as there are refinancing pros, there are also particular cons. When checking out refinancing pros and cons, here are the few risks that you need to keep in mind.

  • Lender’s Mortgage Insurance – Whenever you get a loan, you need to pay insurance to the lender. If you change your lender, it means that you may have to pay that insurance again, even if you already paid it before. This may undercut most of the savings you hoped to get with the refinancing.
  • Longer Loan Duration – Refinancing means that you may have to pay for longer than you originally had to. This might put a damper on your plans if you had the intention to move out.
  • Extra fees – You may be required to pay certain exit fees from your own pocket, and these aren’t exactly cheap. Plus, you may be forced to pay even more entry fees upon refinancing.

Refinancing can be a great way to save some money due to its benefits. However, depending on the circumstance, this process may get you paying more than you should have if you are not careful enough. Keep in mind all these refinancing pros and cons before deciding.

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Financial Planning Budgeting

How to Manage Your Money like a Millionaire

How do millionaires make their money, especially when they’re so young? And just as important, how on earth do they manage it? What are their secrets, and can we learn from the methods that they apply?

Well, Capgemini Consulting made it a little easier for us with the report in which they reveal young millionaire money management methods. Do you want to know how to manage your money like an under-40 millionaire? Then keep reading for some valuable tips.

Manage Your Money like a Millionaire

Socially responsible investing

Do you think millionaires invest all willy-nilly? They do not, and they don’t just support the causes dear to their hearts through donations, they also invest in them. That way, they make a hefty return, but they also have a clear conscience, knowing that the cause is a good one.

They usually benefit from the help of a financial advisor, who can tell them what to invest in. And the method is not limited to just millionaires. More and more millennials (two thirds) and about a third of generation x-ers were found to be involved in such socially responsible investments.

Dubbed as a “feel good return”, this allows people to invest without guilt, but they should still retain a balance and not invest everything in just one place, which is a good tip if you want to manage your money like these millionaires.

The case for cash

Studies have found that people who spend cash spend around 12%-18% less than their counterparts who use credit cards. But that’s not why millionaires like cash. In fact, the reasons given were diverse:

  • They want to have money ready for investments
  • They want to have easily-accessible disposable income to spend in order to live the way they desire, including shopping, vacations, eating out, etc.
  • They want to have a means to protect themselves financially, in case of a market crash or a changing market

If you’re looking to manage your money like a young millionaire, going with cash cannot steer you wrong, especially if you have a safety cushion to land on in case times get rough.

Real estate investments

Real estate remains the tried and true of investment, because it offers multiple income sources that are more or less steady. While investing in stocks of a major company can pay out really big, it can also be incredibly risky, so maybe that’s not something to emulate when it comes to how you manage your money. Rental income, by comparison, is safe.

Interesting is that these young millionaires seek their friends’ and their families’ help, but also the Internet’s advice, when it comes to financial matters. Baby Boomers, by contrast, were much more likely to trust a professional with their money and their investments in their future.

This is just one of the signs that money management in traditional ways doesn’t fly anymore. A growing number of millionaires (not only the young set) claimed that they would like to receive automatic advice from a robot, per the same report from Capgemini.

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First Home Buyer News

Should you access superannuation for buying a house?

It is every young family’s dream to buy a house to make into a home but with rising property prices, it is becoming more difficult for first home buyers to enter the market. A young family might not have much in the way of savings and it can seem impossible to come up with the minimum amount needed for a deposit on a mortgage. The Australian government, under Treasurer Joe Hockey’s suggestion, is considering letting people access their superannuation account for the purpose of putting that money towards buying a house.

Superannuation for a new home

The retirement funds are generally not allowed to be accessed until a person is the age of 60 but the federal government is taking a lead from other countries such as Switzerland, Canada and Singapore and thinking of letting people dip into their retirement funds early to invest into a home. The idea has gotten a lot of backlash from the opposition government and it probably should. Although the money is for that person to spend however they want, it also serves as a safety net to make sure that people can afford their needs when they get older. Instead of having the capital being held by the government at a secure interest rate and knowing it will be there in the future, it might soon be possible to take a risk and use some of that money in the real estate market.

The proposal hopes to have several positive and negative effects. Getting young families into homes is a major goal of the current administration. But the goal also includes letting people become more self-reliant and less dependent on the superannuation scheme. The 5% taken out of Australians’ pay cheques is usually something that all Australians are looking forward to one day. However there is a possibility that many will not have as much as they might have had when it comes time to enjoy their golden years if this proposal gets approved.

The access to retirement funds might just fuel home prices higher and have a muted effect on making homes more affordable. Any large decision like buying a home is already big enough and maybe it is not the best decision to risk your superannuation funds on the volatile property market. There are many ways to get the loans needed for a mortgage and with the current low interest rates it could be wiser to leave your superannuation alone and buy a house the old fashioned way.

The old fashioned way being; acquiring a home loan or a debt consolidation loan from a trusted bank or a trusted lender, usually at a more competitive rate. Speak to a financial consultant about the right type of loan for you and your family to buy a new home.

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Financial Planning

Good Resolutions You Should Know About with the New Financial Year

Good Resolutions You Should Know About with the New Financial Year

You may agree that New Year resolutions tend to be very difficult to keep. As the months of the year move on, you may realise that you have already failed in keeping those. More difficulty comes with the financial aspect. It could be very hard to keep the resolve not to overspend or not to make bad financial decisions.

Fortunately for all of us, the new financial year comes to bring a second chance. If you faltered in your New Year resolutions especially those involving personal finance, you may still do better and catch up in the new financial year.

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Financial Planning

Top money saving tips with a financial planning strategy

If you are trying to save money, then you won’t be short of advice on how to go about it.

The Internet and various conventional publications are overflowing with well-intentioned wisdoms.  Many of those ideas are perfectly credible and even laudable but unless you’re either very experienced in financial management or psychic, you may struggle to make sense if at all.

That’s because some elements of that advice are going to be in conflict with each other and it’s also fair to say that great chunks of it may not be particularly pertinent to your individual circumstances.

However, don’t give up!  The answer is what’s called a financial planning strategy and here are some top tips about how to go about putting one together.

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Debt Management

What is the Impact of Becoming Bankrupt?

Bankruptcy does not last forever. Usually, its protection lasts only a year. During the period, the individual’s financial affairs will be put under restriction. That means there are certain privileges that the bankrupt person may not possibly enjoy even after bankruptcy has been lifted. Discover the impact of bankruptcy here in this article.

Furthermore, being bankrupt is not a guarantee that a person will be totally free from any financial obligation. In many cases, the individual is still required to pay a certain amount to repay debts from creditors following an assessment of current inflow and outflow of income. The repayment scheme under bankruptcy may continue even after the individual is discharged from the provision.

Needless to say, bankruptcy brings about serious implications. Its impact can never be underestimated and overlooked. Aside from the embarrassment and eroded self-esteem, an individual can face the greatest setback in his financial aspect.

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Financial Planning

Having a Financial Plan vs. Day to Day Approach

In a month, your income may or may not be fixed. But your basic expenses can be constant. To many people, a financial plan is necessary. It can serve as a guide on how an individual can spend and manage his resources. Not all people realise the advantage of having a working financial plan, though. There are those who prefer to spend without planning and handle their money on a daily approach.

Money management logically does not naturally or easily come to everyone. A financial plan will always be helpful whether you have tremendous or little experience with managing and handling wealth. Financial planning can generate numerous advantages that can cover different aspects of your life.

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Financial Planning

How Can Financial Distress Impact Your Health

The stress caused by the economic downturns and financial shortcomings can literally make you sick. This is quite logical. In the recent global economic downturn, many evidences were recorded linking financial distress to various health conditions. That link is not surprising.

In 2005, a research was conducted in the US to identify possible health implications of financial distress. That study explored specific health effects that are often and logically associated with financial problems. It surveyed random individuals from across the country.

The results showed that there are various perceived possible effects of financial stress on both physical and mental health. Financial problems and poor health are associated. Stress is the main health impact of job loss, piling debts, loan defaults, and budget shortages. From there, many other health conditions can possibly ensue.

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Financial Planning

Australian Borrowers Cautioned to Curb Spending

Borrowers have been urged to stem their spending over the approaching festive season, as the world financial markets remain unstable. As the end of the year starts to approach, the Christmas holiday period is a common time to splurge on those gifts and leisure activities, without as much concern about the bank balance. This is one of the most common times to accumulate debts.

However the head of Consumer Advocacy at a mortgage corporation Lisa Montgomery, warns it is “an area of spending which traditionally tends to blow out over the last few months of the year and invariably leads to a New Year hangover.”

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Financial Planning

Retirees Struggle with Finances

A recent survey has shown that one in four self-funded retirees has been forced to return to the workforce as a result of their shrinking retirement funds. On top of this, retirees are looking to cut spending, accept a lower standard of living, sell assets, cancel travel and recreational activities, or delay retirement altogether.

The survey shows that four in ten have lost more than $100,000 in the market downturn. More than one in ten have lost half of their invested wealth (excluding unlisted property).

As a result, 26% of retirees have been forced to get a job or are planning to do so simply to make ends meet.

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Financial Planning

The Cost of Raising a Child is now $1 Million

The cost of raising children to 18 has hit the million dollar mark research suggests.  In comparison to the days where children where entertained more simply, parents are now finding themselves forking out for expensive toys, the latest technologies and private lessons for dance, sport, music and schooling.

Considering the average child now stays at home until the age of about 24 the real cost to the Australian parent of raising children is said to be roughly $1,028,093.

Generation Z, (those born from 1995), are the most financially endowed generation of children ever.  Every child has their own set of everything. They are definitely not in the era of shared toys or hand-me-downs.

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Financial Planning Financial Fitness

Generation Y Become Cautious Investors

Generation Y has never seen a recession. A survey has found that they are taking notice of the current global financial crisis, which has weakened their appetite for investing.

Once known as being among the most adventurous and carefree of all investors, those born in and after 1980 have suddenly become more conservative than their baby boomer parents. The portion of Generation Y who treat investing as a hobby has dropped from 30% in 2008 to just 7% in 2009.

This collapse in interest in investment marks a significant shift for a generation that until recently had only known a rising share market, a strong economy and low unemployment.

For Generation X (those born in the decade or so before 1980) the proportion of those investing for a hobby had a gentler decline, from 18% in 2008 to 14% in 2009.  The Baby Boomers (the generation before X) remain a powerful force in investment as they have been less deterred by the market turmoil.

The experience of a falling share market, collapsing companies, an uncertain economy and high unemployment have contributed to generation Y developing into cautious and conservative spenders when it comes to investment.

On the other hand, Generation Y has actually increased the money that they spend on going out, by 31% compared to the same time last year. They are spending more on smaller purchases such as iPhones, GPS navigators and electronic games.

The comfort of still living at home with their parents contributes to their ability to spend more frivolously. The amount of twenty-somethings still living at home has grown by around 300% in the past 20 years.

In saying this, Generation Y’s are still striving to save that ‘housing’ deposit as they follow in their parent’s footsteps by wanting to invest in property.

With the help of Australian Lending Centre, the objective of owning a home may be achieved with competitive interest rates and a variety of tailored home loan options.

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Refinance and Refinancing

Generation Y Expects the Parents to Help Financially

A recent research project has revealed that two-thirds of Generation Y (16 to 29 year olds) expect their parents to help them out by paying their rent, assisting in purchasing a home, paying for their wedding and purchasing a car.

The research uncovered a concerning disconnect between what Gen Y expect from their parents in terms of financial support and what parents are now able and willing to provide.

Unfortunately for Generation Y, it has become evident through another study that 70% of baby-boomers (Gen Ys parents) have suffered financially as a result of the global financial crisis. Baby-boomers themselves are in the midst of amending their own financial problems by refinancing, consolidating debts and using new and innovative methods such as Debt Agreements to assist with their own repayments.

The research shows that 44% of Gen Ys expect their parents to pay for all or at least part of their wedding, 40% expect assistance in purchasing a house and 34% expect financial support for their education.

However with these high expectations it was astounding to see that 65% of Gen Y admitted to having no knowledge of their parents’ financial situation.

With the alarming figures of debt this generation has, it may finally be starting to sink in that they need help with managing their debt and another credit card is not the best solution.

Generation Y has become the latest casualty of the economic crisis. Credit reporting agency Veda Advantage has revealed a large drop in Gen Y applications for personal credit. Veda Advantage’s May figures show a drop in all account credit applications, including hire purchase, credit cards, personal loans and mortgages. Gen Y credit card inquiries fell 26% and mortgage applications declined 5%.

If you are struggling to pay your debts, don’t rely on your parents to assist you, simply call Australian Lending Centre and find a solution that is suited to your needs. Dial 1300 138 188 to speak with one of our experienced consultants today.

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Financial Planning

Start a Savings Habit

Decide your savings goals – this will help you work out the best way to save to achieve them.

Term
Purpose of the loan
Short-term (0 to 2 years)
• Christmas and holidays
• An emergency fund for unexpected expenses
Medium-term (2 to 5 years)
• Pay off loans
• Put a deposit on a house
• Buy a car
• Pay for home improvements
Long-term (5 years or longer)
• Children’s education
• Your retirement
• Long-term financial security

Good Savings Habits

Initiate a savings plan

Many people find it very difficult to save. Any money they get they seem to spend. If this sounds like you, fear not. Below are some helpful tips to kick start your savings habit.

Even if you start by saving small amounts regularly, it will help you;
Manage your money better and be more prepared for the unexpected
Not have to rely on personal loans to buy the things you need in the future

Clear your current debts

First things first, in order to start saving, the best thing to do is clear your existing debts from personal loans, credit cards, store cards and overdrafts. The rate of interest you will be paying on your debts is usually far higher than the rate you will receive on your savings.

Maximise Your Savings

Once your debts are under control you can then start to save. Most financial institutions will allow you to have your savings automatically debited from your account. Once you have gotten in to a savings habit it is worth considering which account will now offer you the best return on investment.

If you need assistance to clear your debts call us here at the Australian Lending Centre. We have a number of debt solutions available and will be happy to discuss these with you over a phone consultation. Call us today on 1300 138 188 to speak with a debt consultant, or alternatively fill out an express enquiry form on our website and we will get back to you shortly.