Mind the gap

On the subject of budgeting again....I spoke recently in a group of business women and we touched on budgeting which is not my jurisdiction but all the same it evoked responses. I talk about budgeting as understanding so you can make conscious choices about your spending, so I talk about going through your bank statements methodically to understand what it is you spend your money on. Invariably there’s a column that stands out as an issue, it might be the entertainment column, or clothing or too much spent too often on treats – or it just might be the unknown, as in you literally don’t know where it goes…a gap if you will. In the conversation after we discussed a workshop where participants

Stuff: that is stuffing up your budget

OK full disclosure: I am not a fan of “stuff” (and for the record, shoes are NOT stuff). So I’m not the type to buy unnecessary stuff anyway and I am triggered by comments about buying because it’s tax deductible. I’m mainly looking at you my self employed people, but also anyone who’s claiming any expenses on their tax & using this as an excuse….BUT it isn’t hard to extend this to everyone who might be buying stuff they don’t need. If you’re not self employed or claiming “tax deductions” feel free to skip to the # For those who are buying because it’s 'tax deductible': If you spend the dollar you get the tax back on the dollar spent – nothing more. Depending on your tax rate, this may be 24

What is negative gearing?

Quite simply, negative gearing is when the costs of your investment exceed the income in that financial year – when talking about property what this mean is the rent, rates, management fees, repairs and maintenance, insurance and any other costs of owning the property are more than the rent you’ve received in that year. Under current tax legislation you’re allowed to claim this shortfall against your income to receive a tax break – but keep in mind, you only get back the tax on that dollar spent, not the whole dollar, so ideally we would prefer a situation where the property doesn’t cost us anything at all, negative gearing is just a small benefit to help you grow your wealth and fund afford

Common questions first home buyers have.

How much can I borrow & how much can I spend? Pretty much first question – how much will the banks lend me – to which I add, how much do you want your repayments to be? The answer varies between lenders. Online calculators, are not terribly accurate so I would advise you seek proper preapproval before you go looking. In order to maximize your potential remember all credit facilities reduce your borrowing capacity. Cut credit card limits and pay out and close personal loans, car loans, and interest free facilities. How much deposit do I need? With the exception of where you have parents offering a guarantee – lets come back to this – you typically need a minimum of around 9% of the value of t

Buying property in other locations when metro is too expensive

When CBD prices surge its tempting to look at alternative locations to get into the property market, and I totally agree with looking at your options – go in with eyes open, a real plan or strategy, and make educated decisions. I’ve seen a number of first home buyers who have been advised (not by me) to purchase properties in other locations with a view to growing their deposit. What I say about this is know what you’re getting out of it. You need to know your exit strategy, the reason you're doing it - are you expecting growth & cash it out or saving the extra rent to further your deposit? Also consider the costs in doing so – you’ll pay stamp duty and legal & loan fees to buy the property

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