Top 5 Financial Tips for Generation Y – Given to A Current Affair

1. Save before you Spend – Building Wealth

Create an automatic transfer of 10% of your salary into another bank account (such as a high interest account).

It is important to do this when you get paid. You should pay yourself first.

When the gym takes their fee directly from your bank account – do you manage to survive – Yes.  Put in an automatic transfer and don’t ever stop it.

Even if you get a credit card debt. Pay off your credit card debt after the 10% (OK this part is debateable- some prefer to pay credit card debt first).

Saving 10% of your salary is like your parents getting you to eat your vegetables – you will enjoy the financial dessert some day.

Resources

http://nomoney.com.au/2009/09/29/the-one-trick-to-saving/

 - Book: The Richest Man in Babylon by George S Clayton (click on Right hand side to buy through Amazon.com)

2. First Home Saver Account – Saving for A Home

If you are 18 and plan to buy a home -start a First Home Saver account with your local bank.  It is a special account – Commonwealth Bank 4.25% & ANZ have them 4.5%

 You need $1,000 to start, and $1,000 a year deposited over 4 non-consecutive years.

 You get 17% contribution from Government + Bank Interest and only pay 15% tax (automatically deducted & sent to ATO).

 The Traps (MAKE SURE YOU READ THIS) – you need to have deposited $1,000 into the account for 4 years- otherwise it goes into your super fund. So if you buy a house after 2 years then the money is transferred to super.

 So start off slow – You could transfer $100 a month into this account for the first few years then up to $5,000/yr ($416/month) to get max Gov contribution benefit.

 Note that can still get FHOG if it lasts!

 Resources

Fido main site http://www.fido.gov.au/firsthomesaver

 Home Saver Calculator http://www.fido.gov.au/fido/fido.nsf/byheadline/First+home+saver+account+calculator?openDocument

 ATO re: First Home Saver http://www.ato.gov.au/content/downloads/MEI00155253n72406082008.pdf

 First Home Saver accounts

ANZ http://www.anz.com/personal/accounts/savings-accounts/home-saver-account/

 CBA -http://www.commbank.com.au/personal/accounts/firsthomesaver/default.aspx

(Westpac & NAB probably have them too but I couldn’t see when I flicked through their sites – maybe someone from Westpac and NAB want to email me nomoneyau@gmail.com and I’ll update this blog with your links)

 First Home Owner Grant -NSW $7k still available until 30/06/2010

http://www.osr.nsw.gov.au/benefits/first_home/  (Other states check go through fido links)

3. Spend less on having a good time

 Watch what you drink -if possible buy first round or avoid rounds of drinks altogether

 If you are not feeling it – go home or don’t go out

 So many fun things don’t actually cost that much

-Hanging out at a friends house, having a few (a few!!! like 3) drinks at the pub.

-Having coffee

-Going to the beach

 4. You can live cheap without being a tightarse (not sure if they’ll say tightarse on Channel 9 – but I’ll say what I want on my website!)

 A few quick ideas - Buy items on sale or 2^nd hand, Sell unwanted items on www.ebay.com.au, Bring your lunch to work

 5. Clear that debt & don’t make stupid decisions

 If you have a credit card debt make it a priority to pay it off. As credit cards charge 20% that is better than almost any investment.

 Pin your credit card statement to your fridge and look at it whenever you are about to go shopping.

 Don’t enter flexirent, etc.

This entry was posted on Thursday, January 7th, 2010 at 3:30 pm and is filed under Life, Property, Saving Money. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.