Get ASX Price

 


  Latest Planning News
Hot Issues
Market Update 2019
How the top 10 global companies have changes since 1998
The longest US economic expansion ever
When can I access my super
Australia by numbers – Update
How to retire early
How to play catch up with your Super
Inflation undershoots in Australia
9 money mistakes to avoid in retirement
What a financial planner does to help.
Australia's vital statistics.
What kind of money parent are you?
How to save money
Federal Budget 2019 - Overview
How the 2019 Federal Budget affects you
New Global growth slowing, plunging bond yields & inverted yield curves
Women and Money
Market Update - March 2019
The problem with getting to 53 years of age.
How to avoid a travel debt hangover
Things to avoid as a newbie investor
Budget Time - How's Australia going?
Most older Aussies prefer home care over a nursing home
Why growth in China is unlikely to slow too far
10 money conversations to have when your relationship heats up
Australia slides into a 'per capita recession'
6 steps to get your money stuff together
All you need to know about how Australia is going.
Australian housing downturn Q&A
6 ways to reduce your credit card debt once and for all
5 life insurance questions you've always wanted to ask
2019 a list of lists - regarding the macro investment outlook
Part 4 - The major benefit of ‘behavioural coaching'
How to adult—a quick guide to personal finances in your 20s
How Australia is performing.
The Australian economy in 2019
Holiday budgeting tips— How to avoid a travel debt hangover
Australia - a comprehensive run-down of our vital statistics.
The Fed and market turmoil - the Fed turns a bit dovish but not enough (yet)
12 ways to avoid waste this Christmas
Rising US interest rates, trade wars, the US midterm election results, etc
Our Advent calendar for 2018
Responsible and ethical investing
What are the 3 biggest living expenses for households?
Your Adviser and Behavioural Coaching
Stop!! Don't do a paper Budget, use our online budgeting tools instead.
Information needed to be the BBQ expert.
Would you like to retire by 40?
The property cycle and the economy
How financial advice helps create wealth.
7 money personalities you may identify with or want to avoid
Are shares expensive?
How's Australia doing statistically?
Super investment options – what’s right for you?
Here's how to lead a happier life
What happened to all the worries about rising inflation and bond yields? Goldilocks, tariffs, Turkey & other things
Is it better to buy an investment property or home first?
Nine keys to successful investing
This information will turn you into a fireside expert.
How Australians will use their tax return
Lessons from the blue zones: secrets of a long life
Trumponomics and investment markets
Tools for budgeting, cash flow, Super and more ….
How tax deductible personal super contributions work
How much super should I have at my age?
The rise of the gig economy and side gigs (thanks to technology)
Statistics for all Australians
Watch out for tax scams
After the Australian household debt and east coast housing booms
Now’s the time for tax planning
Why it pays to contribute to your partner's super
Australia by numbers – Update
How to deal with financial stress – nearly 1 in 3 affected
Federal Budget 2018 – Overview
Your Budget
4 components of our 2018 Federal Budget
US China trade war fears – Q & A
Tools to help you manage your financial position are available on our site.
7 ways to boost your super
Australians reveal their priority goals
Australia by numbers – Update
Your retirement questions answered
How to make money by turning your unwanted goods into cash
Our website is really our digital office.
Bitcoin – is it really for you?
Spread your money, reduce risk
Love and money? It’s not about control
The pullback in shares - seven reasons not to be too concerned
Australia. All you need to know to be the expert.
Australian’s love affair with debt - how big is the risk?
5 ways to keep a cool head in a falling share market
2018 – a list of lists regarding the macro investment outlook
Sports lovers enjoy better financial fitness
Where Australia is at. Our leading indicators.
The year that was and the year ahead
Add some extra cash to your New Year
New year, new financial resolutions
Our Advent calendar for 2017
Where are we in the global investment cycle?
Australia's vital statistics
12 ways to enjoy summer without spending a fortune
One in three Aussies travel without protection
Digital payment options could see you spend more this Christmas
If you’ve always thought property prices only go up…
Will Australian house prices crash?
Where are we in the global investment cycle and what's the risk of a 1987 style crash?
Money steps for women
Resources on our site to help you, your family and your friends.
Australian Dietary Guidelines and healthy eating chart (PDF)
How to retire, your way
Prepare for retirement without missing out today
Be the boss of your cash
The Australian economy bounces back again
Should you lend money to family?
Money mistakes people make in their 50s and 60s
Australian Dietary Guidelines and healthy eating chart (PDF)
Eight steps to improved cashflow... and lifestyle
Powerful Budgeting, cash flow and Super Tools available on our site.
5 ways Australians will use their tax return this year
Australia's leading causes of death - ABS
The threat of war with North Korea
Six traits of Australians living the dream
The break higher in the Australian dollar is likely to be limited
Money can buy you happiness, you’re just spending it wrong
Key Economic Indicators, 2017 – updated
Helping your kids buy a home
From Goldilocks to taper tantrum 2.0
What’s your debt age?
Doing a budget is a good idea but ....
Planning is the key to making it financially
What to do when you come into money
Managing your money when you move in together
Reduce your bills with these household items
It pays to contribute to your partner's super
How to cope with losing independence
Transition to retirement income streams
The Australian economy hits another rough patch
Watch out for tax scams
The three core pillars of this year's budget
Federal Budget - 2017-18 - Overview
Federal Budget - 2017-18 - Budget documents
Make the most of the current super caps
Five, four, three… it’s not too late to get more in super
Super changes are coming
What’s your debt age?
Australian cash rate on hold
Super changes this financial year - Dr Shane Oliver - video
The door is closing on super’s current caps
Is Donald Trump's honeymoon with investors over?
Estate planning and why you need a super plan
What does a comfortable retirement look like?
Give your career a health check
Super changes from July 2017
Changes to the Age Pension assets test
Keep your money safe over the silly season
Looking ahead at 2017
Review of 2016, outlook for 2017 - looking better despite the political noise
Merry Christmas for 2016, a Happy New Year and a prosperous 2017.
54.2 million worries
Five tips for happy healthy ageing
Thinking about managing your own super?
Sending more to the tax office than you should?
Government pulls back on proposed changes to super
Market Update - What to consider when investing in a low return world
Stop!! Don't do a paper Budget, use our online budgeting tools instead.
Oliver's Insight - Megatrends
Value of Advice
A growing family doesn't have to blow the budget
Blinded by optimism
Thinking about managing your own super?
The investment outlook - it's not all that bad!
What’s your biggest obstacle to financial success?
Ageing Parents
Should you own the roof over your head?
Be a senior entrepreneur on your own terms!
Brexit and other key developments
Brexit wins
Commentary on major issues - AMP
Five money habits for a happy financial year
Are grandparents giving too much?
Remember to factor in parental subsidies at tax time
2016-17 Federal Budget - AMP
2016 Budget in detail
How (and why) to talk to your adult children about insurance
Procrastination: Just do it. Eventually.
Why Australian property won't collapse
The Lucky Country holding up pretty well
Have we reached the bottom?
The evolution of the Chinese consumer
Retirement rolls around faster than you think
Pressed for time?
Changes to the Age Pension assets test
Women are building financial intelligence
Heirlooms no more
Initial market falls precede stronger returns - Shane Oliver
What exactly is income protection insurance and do I need it?
A rough start to the year, which could have further to go
Aged Care - Changes to Assessment of Rental Income
A bump in the road, then a new start
New year, new start – are you ready for retirement?
Review of 2015, outlook for 2016 - Dr Shane Oliver
We wish you a Merry Christmas for 2015 and a Happy New Year
Go easy on the plastic over Christmas
Resolutions for a wealthy future
The Australian dollar doing what it normally does - overshoot. Dr Shane Oliver
How to manage volatility in a low return world
The Australian economy - more help will be needed. Dr Shane Oliver
Insurance through my super
Four tactics to build an investment portfolio
The demand for global infrastructure
Help achieve your investment goals with dynamic asset allocation
The Power of Budgeting
Jump retirement hurdles with a coach
Preparing for the time of your life
A Super Loan for all reasons
Making a smooth transition
Australian Government - Budget 2015
Budget 2015 - some professional opinions
Achieving a comfortable retirement
Is off-the-plan on the money?
Should I take my super as a lump sum or not?
Do you have a key person in your business?
Tips for success in a competitive job market
All you need to know about buying at auction
To sell or not to sell?
Saving in a material world
How to adult—a quick guide to personal finances in your 20s

Getting to grips with debt, budget and cash flow



       

 

It’s a pity there’s no handy ‘How to’ book to teach you about adult life, especially when it comes to finances. It’s something that you need to learn on the job. 

 

To make the task easier, here’s a breakdown of the three trickiest areas to get to grips with in your twenties - debt, cash flow and budgeting. 

 

1. Managing your debt


 

Don’t be fooled into thinking that debt is all the same. It’s worth dividing what you owe into good debt and bad debt. 

 

Good debt can help you invest in an asset which will deliver a capital gain, while bad debt just helps finance your lifestyle. 

 

One example of ‘good debt’ is a loan taken out to fund higher education or vocational training after you leave school. The name may have changed from the Higher Education Contribution Scheme (HECS) to the Higher Education Loan Program (HELP). But whether it’s HECS or HELP, your debt’s the same—and something you share with 2.7 million other Australians. 

 

The average outstanding HELP/HECS debt in the 2016-17 financial year was $20,303, up from $19,396 in 2015-16. Meanwhile, the number of Australians with debts over $100,000 soared over the same period, from 10,996 to 14,046.i 

 

Your higher education debt is a bit different to many other forms of loan as no interest is charged. Most other debts—credit card, car loan, home loan, personal loan—will charge a rate of interest higher (in some cases much higher) than your Uni debt. But your HELP/HECS debt does increase with inflation so you don’t want to forget about it altogether.

 

If you have other debts to pay off, it might be worth dealing with the high interest debts first and working your way through to lower interest debts. And if you’re saving towards a goal like buying a house, you’ll need to weigh up the relative merits of paying off your debts versus putting the money towards your goal. 

 

2. Understanding your cash flow


 

Cash flow is just a fancy way of measuring how much money is coming into your account and the amount that’s going out at any time. 

 

It’s made up of three key components. 

 

  • Income isn’t just your wages, it’s also interest from savings accounts, dividends from investments and capital gains from the sale of assets.
  • Expenses can be ongoing, like rent or mortgage payments, utility bills and insurance, or discretionary, like entertainment and clothing. Simply put, there are expenses you definitely can’t avoid and expenses you possibly can.
  • Savings comprise anything you have left over after expenses are subtracted from your income. Hopefully this will be a positive number but if your expenses are more than your income, you’ll have a negative cash flow.

 

3. Creating a working budget


 

An effective budget can go a long way towards helping you achieve your goals. 

 

It can help to think about budgeting in terms of your cash flow—what’s going out and what’s coming in. 

 

If your cash flow is negative, or you’d like to see your savings increase, you’ll need to look at your expenses and see if you can cut back in any areas. 

 

It could be as simple as buying more home brand groceries or spending less on takeaway food. Or it could be a little more long-term, like moving to a more affordable area to save on rent or mortgage repayments. 

 

Turning to the income side of your cash flow equation, it’s worth reviewing your income sources to see if you can get your money working harder for you. Could you be getting a higher interest rate on your savings account, a better return on your investments, or even earning more money with a second job or side project? 

 

Getting on top of your debt, cash flow and budgeting are essential lessons for anyone learning to adult. Understanding them will give you more control to better manage your money and reach your financial goals. If you need help, give us a call. 

 

 

i Parliament of Australia, Updated HELP debt statistics, https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/FlagPost/2018/May/HELP-debt-statistics 

 

© AMP Life Limited. 

First published January 2019