First Home Saver Account

While the drop in house prices has been bad news for a lot of our parents, some economists are starting to suggests it’s merely a case of a market balancing in the wake of overvaluing property. In other words, it’s a great moment to buy a first apartment or house at what is a realistic price, as opposed to the skyrocketing rates of previous times.
To help with this, no small task irregardless, the government initiated a program called the First Home Saver Account in 2007. It was remarkably unsuccessful, considering the benefits available from the account. Currently, of the big four banks, ANZ is the only one to still offer the account, the rest of the providers are mostly credit unions. This account could be a useful tool in saving to make your first plunge into the housing market. Here are some of the ins and outs of the account and why you should consider opening one up.

What Is The First Home Saver Account?

A First Home Saver Account is more like a term deposit than a savings account, as it has a set time limit before you can access the money. It also comes with certain conditions; the money can be used only for a house deposit, or some other essential aspect of home-buying. It can’t be withdrawn before the time limit. Also, it’s stipulated that you contribute a minimum of $1,000 over a minimum of 4 years. Otherwise, you are judged ineligible and your money goes into your super.

Setting Up The First Home Saver Account

Once you’ve set up an account, you can contribute, your family can contribute and the government will contribute 17% of your contributions for the year, up to a limit of $6,000. Once you’ve reached the cap on the account which, this year is $90,000, you can’t contribute any more, although interest and government contributions can still be entered into the account. Your home saver account interest is only taxed at 15%, mak
ing it an appealing alternative.

Where Can I Get A First Home Saver Account?

Banks, building societies, credit unions all offer first home saver accounts. They provide interest on your account balance. A full list is at the Australian Prudential Regulator Association. The ANZ, as mentioned, is the only one to offer a home saver account of the Big Four, with a variable interest rate and no fees. The highest rate is offered by Members Equity, with a cool 5% and no fees.

What Questions Should I Ask When Signing Up?

Ask to see a Product Disclosure Statement before signing up to any account. There’s a full list of registered providers at the Australian Prudential Regulation Association, so be sure to check the list for your account. There’s also a 14 day cooling off period, where you are allowed to change your mind and collect your balance. You will still be fully capable to opening another first home saver account.

Benefits Of Using A First Home Saver Account (FHSA)

Not only does a first home saver account offer a structured, relatively easy approach to saving your first house deposit, it provides a couple of opportunities. First, the co-contribution of the government is a helpful addition, at up to 17% of your contributions. Then, there’s the interest on the account. A first home saver account also doesn’t restrict your from receiving the first home owner grant, which can be extra money with which to purchase your dream home.

5 Investment Mistakes To Avoid

On a TV show, a young child is watching the news. The sharemarket profile came on, with it’s big dips and occasional highs, and the character remarked “It’s always going up and down. Why don’t we go back to olden times and just trade in chickens?”. Surprisingly wise words from a television character.

Yes, the sharemarket is always going up and down and our job, as investors, is to make some predictions on that movement and aim to capitalise on them. Anyone who tells you it’s easy is trying to sell you something. Whether you’re a dab hand or completely new to the game, Louise Bedford at Yahoo! Personal Finance wrote last week on some of the sins of investing, inspiring the list below.

 

5 Basics For Your Investment Strategy

Solid and sustainable personal finance is a mix of several key ingredients: low exposure to debt, a solid saving schedule, a well-balanced budget. A lot of personal finance experts would suggest that investment comprises an essential part of that mix. Everyone is different when it comes to investment. My grandfather swore by property. His mother swore by the money she had in her mattress. However you are investing- property, shares, a managed fund, bonds, term deposits- you need to have a solid investment strategy. Here are the 5 pillars of the strategy.

 

How To Choose A High Interest Savings Account

Choosing a high interest savings account to house our savings should be quite straight forward. Unfortunately however it isn’t as simple as one would lead you to believe. To hunt down the best deal and ensure your money has the best possible rate/chance to grow, you need to be aware of a few things.

Here is how to select the best high interest savings account for your needs.

 

5 ways to get free entertainment in Sydney

The weather has turned hot and all of a sudden your days are full of the beach, the park and backyard barbeques, usually for little more than the cost of a train ticket, a few bread rolls and an Icypole if you’re especially good.

Surveys always rank Sydney as one of the most expensive cities to live in. While this is true of the cost of an apartment or a cappuccino, Sydney is also one of the best cities to be in if you like having fun for free.

Here are a few fun things to do for free over the coming months:

 

Cheap low cost day trips in Australia

No one wants to be stuck in the city in perfect summer weather like we’ve been having. Days like these make me gaze out the window and think of where I’d rather be. But these thoughts don’t have to be daydreams only, and you don’t need to be rolling in money to get out of town for a day.

Australia is a unique place when it comes to day trips. It’s not like Europe, where a day trip can easily involve another country.

We can’t just hitch a train to New Zealand and be back in a couple of hours.

But there are some benefits to being an island and largely uninhabited- namely, that getting away from it all is very easy. After all, the Blue Mountains are a day trip from Sydney, the Great Ocean Road is a drive away from Melbourne, Phillip Island a short jaunt from Adelaide and the Daintree readily accessible from Cairns.

There is so much to do and see in Australia, and lots of activities you can do cheaply.

 

Saving money on travel – Cheap holidays & deals

You’re working hard, you’re saving and paying off your debts- maybe it’s time for a holiday. A bit of sun, some new horizons, an opportunity for time with your loved ones free of the everyday niggles and anxieties. A chance to sit by the waterside and re-read War and Peace, or catch up on the gossip mags. But is it possible to take a trip without totally throwing all your savings into jeopardy?

Travel is an expense. There’s no way you can save money by travelling. That said, it is also a wonderful experience, and worth investing some of your savings in if it appeals to you. There are two approaches to travelling- it can be done ad hoc and without much thought, which might cost you more money than you were anticipating. Or you can do your research, think it through and exercise a bit of frugality, and you might be able to stay longer or come back sooner because you’ve done it cheaply.

Here are some tips from readers of Yahoo! Travel on how to do it cheaply, and in style.

 

Is University A Bad Financial Decision?

University is a path to some well-paid jobs. It is often necessary to obtain work in the professional sector. But in the age of expensive living costs, huge HECS (or whatever they’ve changed the name to this month) debt and very long degrees, is it necessarily a smart financial decision?

 

Tips And Tricks For The Recently Graduated

Uni was great. I hung out with my friends all day and all weekend. I worked 12 hours a week, and had practically nothing left over when the rent was due. Bliss. Post-uni, things aren’t quite so easy. Bills to pay, career decisions to make, the spectre of HECS. Here are some tips and tricks I wish someone had told me. Inspired by the incomparable Globe and Mail.

 

HECS/Help Debt – Pay In Full Before Jan 2012 For 10% Discount

If you have completed University, you will likely be aware that you have a HECs debt (now known as a HELP debt).

Did you know that if you voluntarily pay off your entire debt directly with the ATO, you will get a discount of 10%? This means that if you were to owe $7,000 in outstanding HECS/HELP debt – if you were to agree to pay this in full, you would get a 10% discount – a saving of $700, revising your total you owe to only $6,300.

This discount may not sound like a lot, though we at Savings Guide will take whatever discounts the ATO wish to hand out as great news. It isn’t often you hear of hands outs like this. This is the equivalent of the ATO giving you $700 in cash.

The 10% discount ends as of 1st January 2012

That’s right. This 10% discount has been reduced to 5% as a result of recent Government legislation changes. On 1st January 2012, you would only get a 5% saving if you paid in full. This means a saving of $350 instead of $700 in the scenario above.

Are you a future thinker?

The majority of people will ignore this hand out. This is understandable if your debt is quite large as quite frankly it would be very hard to cough up that amount of money by December 2011.
In saying that, if your debt is quite small and on its last legs – you would be a very wise and future thinking saver to take advantage of the 10% offer while it was still available.

Benefits of paying off your HECS/HELP debt

Each pay cheque you receive you pay a little towards your HECs/HELP debt. Paying it off means more money in your pocket each pay day and the ability to use that money wisely for other more exciting things.