[Note: This information is current at time of writing (May 2012). For up-to-date or more specific information, check out the government websites listed in the resources section below or linked to in the article.]

There are currently a number of options when it comes to Australian government financial assistance for families. This assistance can go a long way in helping to cover the costs of raising a family and living on a reduced family income.

Below is a list of assistance programmes available to those who meet the eligibility requirements. Nearly all families in Australia are entitled to at least one financial assistance option listed below.

Paid Parental Leave

Paid parental leave is $589.40 per week (at time of writing – based on the Australian minimum wage) for an eligible working parent (usually the mother) for up to 18 weeks.

You can find more info here and here.

As of January 2013, the government is also offering paid paternity leave for fathers. This leave is for two weeks paid at the minimum wage.

The Baby Bonus

The Baby Bonus is an alternative to Paid Parental Leave and is $5,500 paid fortnightly (at time of writing). It is now income tested.

You can find eligibility requirements and more info here and here.

You cannot receive both the Paid Parental Leave and the Baby Bonus. If you are eligible for both, it’s a good idea to use the Paid Parental Leave Comparison Estimator to work out which assistance benefits you the most.

Family Tax Benefit (Part A & B)

The Family Tax Benefit Part A is a payment that helps families with the cost of raising children. It is paid for each dependent child up to the age of 21 (under certain circumstances. This payment may stop at age 16 if they stop full time study. The amount received depends on the age and number of children as well as family income. See here and here for more details.

The Family Tax Benefit Part B is to assist single income families, including sole parent families. The amount received will depend on the age of the youngest child. This benefit is income tested and eligibility requirements need to be met.

You can find more information here and here.

You can choose to have these payments paid either fortnightly or annually.

Child Care Benefit and Rebate

The Child Care Benefit is to help pay for the cost of child care, assuming you meet the eligibility requirements (the child care centre has to be government approved and your child has to be immunized, for instance) and you pass the income test. The payment amount depends on your family income and is paid either as a lump sum at the end of the financial year, or as a direct reduction in child care fees throughout the year.

You can find more information here, here and here.

The Child Care Rebate is available for those already receiving the Child Care Benefit and is a rebate for 50% of out of pocket expenses on child care costs (to a maximum payment of $7,500 in the 2012 financial year). You can elect to have the rebate paid fortnightly, quarterly or annually.

You can find more information here and here.

Maternal Immunization Allowance

The government provides an extra incentive for immunizing children. Immunization is free and if you follow the proscribed schedule of immunization, you get a bonus payment for each child between the age of 18 – 24 months and then again between the ages of 4 and 5 years.

You can find more information here and here.

Parenting Payment

The parenting payment is for very low income families – at the time of writing to receive the maximum parenting payment with one child, a couple’s combined income can be no more than $174.60 per fortnight. If you receive this payment, you will still be eligible for other parenting benefits.

You can find more information here.

Other available benefits

If your income is under a certain amount, you may be eligible for a low income healthcare card. At the time of writing, the maximum income you can earn over an 8 week period is $6,944 – anything under and you may be entitled to this card (assuming you meet the other eligibility requirements). The card entitles you to free or cheaper medical expenses, including prescription medication, as well as other discounts, depending on what state you live in. For example, some states give a discount on electricity or public transport to card holders.

Once again, go to the Centrelink website for more details and here for income test info. To find out what additional discounts you are entitled to, check out your state government’s website.

Depending on your circumstances, you may also be eligible for rent assistance, you can find more information here, or visit your local Centrelink Office.

Other payments available include the Double Orphan Pension Scheme, the Child Support Scheme and the Assistance for Isolated Children Scheme.

The school kids bonus is a benefit that was announced this month as part of the 2012 federal budget. This bonus will replace the Education Tax Refund. The bonus will be paid to families with school age children twice yearly – at the beginning of term one and three, starting in June 2012.  You can find more information here.

This article is just a summary of the current government assistance available to families in Australia – check out the relevant government pages for more information on each payment. It’s a good idea to know what assistance available to you and, if you are in a position to be choosing between the baby bonus and the paid maternity leave, how to calculate which is the best option for your circumstances.

resources

• Centrelink Payment information
• The Family Assistance Office

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An interesting question was left in a post, deep in the archives, and I thought it would be better bought out into the light so that other might comment and share their experiences and knowledge.

As a ‘singleton’ maintaining a household alone (well, with 4 pets) I’d be really interested to know how other singles manage, esp. if they are paying mortgages on their own. Sometimes I feel completely overwhelmed by the price of utilities (electricity – eek) and I find the price of food…frighteningly expensive. Also, I walk out of the supermarket every week wondering if they (the big shops) think we’re stupid, ie, that we can’t see they are reducing sizes but charging us more! My main interest is whether I’m overspending, compared to others in a similar situation.

If you’re single how do you manage the bills on one income? What suggestions would you make for keeping down expenses?

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Here’s the scenario: you receive a small windfall: you win a gift card, or maybe you get one from a loyalty programme, or maybe a little cash – not a lot, around $50 – $100. What do you do?

Do you:

• Use the money to buy what you need?
• Splurge on something that you wouldn’t normally be able to buy?
• Use it to pay down debt?

If you’re struggling with debt or bill payments, do you feel compelled to use a gift of money to buy something ‘nice for yourself’ as the giver intended, even if it would make your life easier to put it towards your debt / bill payment?

What do you do with unexpected windfalls?

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This week I’m participating Women’s Money Week. The aim of the week is to create a dialogue about the financial issues specific to women and coincides with International Women’s Day.  Each day there is a topic for participants to write about on their website. Today’s topics is about Saving Money.

I’ve written in the past about how we create a savings plan using excel, and how we save for multiple goals, but I thought today I would share exactly what we are saving towards at the moment to give you an idea of what saving for multiple goals looks like in real life.

Our savings plan is a work in progress; our goals change as our needs (and wants) are met and we develop new ones (for instance, we’re saving for a second baby car seat at the moment, obviously not something we save for all the time).

Also, each year I save for more and more specific things. For instance, I wrote the other week how it never occurred to me to save for the replacement costs of household goods like linen and furniture – we now put a little aside each week to cover those future expenses when they crop up.

The whole point of doing this is to keep us out of debt and reduce the pain of paying large bills when they crop up. Putting aside a few dollars each week towards a bill is much easier than having to suddenly come up with several hundred dollars when a bill falls due.

And I admit that in some instances we only put $2 aside for certain expenses (like dental for the kids – my alternative to getting private health insurance to cover possible teenage braces etc.) because that’s all we can reasonably put aside at the moment. But $2 adds up over the course of a year or years and makes life easier down the track (and we can always increase this amount in the future, re-evaluate our savings priorities or spend it on something else if it turns out the kids have teeth straight teeth). Of course, you have to be disciplined not to spend this money on something else in the meantime.

To make this process as easy as possible, I automate it. I’ve set up an automatic transfer into our savings accounts that is deducted each pay (as described here) and all I have to do is update my spreadsheet (which really is optional; the main thing is to actually save, but I enjoy tracking our savings and it does help to keep track of whether you’ve reached your goals / can afford to pay the bills).

Our financial strategy at the moment is similar to zero based budgeting, however we don’t quite budget every single dollar, I do leave some money ‘un-budgeted’ for extra grocery expenses or just splurges, outings or small things that can pop up. And if, at the end of the fortnight that money is still left over, then I might put it towards savings.

While I use excel to track our budget and multiple savings goals, there are many ways to do this: you could use a bank that allows you open several savings accounts without incurring extra bank fees (and therefore eliminate the need for data entry yourself – just automate and forget); you can track your savings amounts on paper; or use one of the various electronic budgeting software options available (more on these in the near future).

So onto our list of savings. This is what we put money aside for every pay day. As I mentioned, in some cases it’s only a dollar or two, but a little is better than nothing (in the free eBook available I go into how I calculate how much we need to put aside to cover regular bills).

Creating a specific savings plan is another way to manage your money and it means you can pay for future expenses with cash and without stress. You don’t need to track every expenses like I do, you can just put aside a fixed amount each pay day to cover everything. However, getting specific means that you can be certain that you’ve saved enough for each expenses or it can show you how much more you will need to save.

What things do you save for? Can you see anything that I should add?

This post is part of Women’s Money Week 2012. For more posts about saving money see the Saving and Investing Roundup.

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I’ve been working hard lately on writing an eBook about how to get out of debt and today I’m ready to launch it into the world!

This time of the year is popular for deciding to reduce debt – getting out of debt and saving more money are two of the most popular New Year’s Resolutions. Unfortunately, many of us don’t manage to stick to these resolutions.

This eBook outlines a strategy for paying off your debts (without too much pain) and saving money to cover future expenses at the same time, in order to stay out of debt in the future.

I would love to hear your feedback on the eBook, whether you find the information helpful and whether you see results. If you’re goal is to pay down your debts this year, I wish you all the best.

Have a great weekend.

You can download your copy (100% free) here (in PDF format).

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I was going to write a post today about creating a budget, but decided instead to write about a money management tool that is just as powerful as a budget (if not more so) and can be used in conjunction with a budget or on its own.

The tool I’m talking about is automation.

Thanks to internet banking, automating your finances is not only possible, but it’s easy and can take as little as 10 minutes to set up. A few minutes doing this simple task can save you money, stress and hours time over the course of the year.

The other day I talked about the myth of willpower. By automating your savings and your debt repayments, willpower no longer comes into play. You can get on with the other things in life while your money takes care of itself.

How to automate your finances

1. Weekly, fortnightly or monthly

The most effective way to automate your finances is to have money automatically transferred out of your everyday account the day after each pay day. This means that you know there will be money available to transfer and you can then live off the remaining, resting assured future bills and debt repayments are covered. So when you schedule your automatic transfers will depend on whether you get paid weekly, fortnightly or monthly.

2. Work out how much you need to transfer

Firstly, if you have credit card debts, it’s a good idea to automate your repayments so that you avoid late fees. To pay off your debts, pay more than the minimum repayment and automate this amount to be transferred each pay (more on paying off debts tomorrow).

Next, calculate the yearly bills that you want to save for. These might include insurances, car registration and maintenance, emergency fund, holidays, Christmas fund, clothing provision, medical, education, bills like electricity or telephone, rates etc.

Grab out old bills and statements to help you work out how much you pay on these bills over the year in total and then divide that amount by 52 (weeks), 26 fortnights or 12 months, depending on how often you get paid. This is how much you will need to transfer into a high interest savings account each pay (again, to be scheduled to come out the day after pay day) so that future bills are covered. For more information on managing bill payments, check out this article and this one.

Lastly, if you have investments or you want to contribute extra to Superannuation, don’t forget to automate those payments too. Don’t wait until you have money to spare, you rarely will.

If you have direct debits in place, try to change the date these come out of your account to coincide with the day after pay day. Again, this means that you know you have funds in the account to cover the direct debit.

3. Jump online and schedule your payments and transfers

The last step is to log onto your online banking and schedule these amounts to be automatically transferred out of your everyday account the day after every pay day. Simple. I set mine up to last the year, but schedule your repayments for as long as you wish (or your bank allows).

So if you’re looking for a powerful money management tool, look no further than your own online banking facility. Schedule savings and payments and make managing your finances this year that much easier.

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This is a guest post by Justin Toladro from Life Insurance Finder.

Political satirist Stephen Colbert recently said on his show in regards to the holiday season:

We are once again spending money we don’t have on things we don’t need to give to people we don’t like.

While there was undoubtedly a level of sarcasm in his rhetoric, in some ways, Mr. Colbert is right: as a consumerist society, we are so overwhelmed with the mad dash to buy as many things for as many people as we possibly can this season. The shopping fervour only increases with each passing Christmas season, and with Australia’s consumer debt crisis at record highs, perhaps spending more money isn’t what we need right now.

With this in mind, there are several things you can take into consideration while planning your Christmas budget. Depending on what your holiday festivities entail, this may be as simple as pumping up your food budget, or something more drastic, such as gifts for all members of the family, new decorations, bakery and meal money, and more. If not kept in check, Christmas spending can get way out of hand; as such, creating a tight budget with enough room to handle expenses that may unexpectedly arise is an absolute must.

If your income is lighter than average this year, then make adjustments accordingly. For gift exchanges with friends or family, perhaps suggest that each person chooses just one other person to give and receive gifts. This way, everyone gets something but nobody has to buy something for everyone. Better yet, you may want to consider a moratorium on gift-giving and replace it with handwritten cards for each individual or just something as simple as a family dinner together. Gift-giving frenzies were inspired by stores looking to boost their sales during the wintry season; don’t fall into the trap of thinking it’s a mandatory event and burning through your available cash with this mindset.

When it comes to decorations, consider buying things used or pooling old decorations with friends and swapping them out. This way, your decorating scheme gets a revitalised look without any added costs. Setting a strict spending limit on decorations—if you so choose to go out and buy more—should be implemented before you spend a single dollar. If you want them to last longer than one holiday season, then perhaps setting a higher limit in order to buy higher quality embellishments can be taken into consideration. Cheap lights and décor items break easily and most likely won’t last, so even if it means spending a little more than you initially had hoped to, going for quality over monetary affordability can be quite beneficial.

Then there is the matter of food. Home-cooked meals and cookies are not only fresher but also more affordable than store brand foods. Potlucks are great for this time of year, allowing each individual to make their specialty dishes and contribute to a fantastic meal for all. Don’t forget to account for holiday sweets in your budget!

So, with Christmas almost upon us and carols in the air, taking the time to steady your financial situation and plan out a specific budget well in advance can keep you from overdoing it on the wallet-crunching this holiday season. Christmas was never supposed to be about spending more and more; it’s about family, friends, peace, and goodwill. Keep this in mind while creating your Christmas time budget.

This article was written by Justin Toladro from Life Insurance Finder, visit our site to compare life insurance policies that best suit you and your family.

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This is a guest post by Justin Toladro from Life Insurance Finder.

Overspending is a major problem in our society today, especially in Australia, where consumer debt levels are among the highest in the world. In the global economic recession, two different kinds of consumers emerged: the stingy shoppers and the over-spenders. The stingy shoppers are so frugal that oftentimes they would rather go without even basic quality goods, all in the name of saving a dollar or two. This is one extreme, and the others are the overspending individuals who can’t help but buy more, more, more! Even if they don’t need it, they get sucked into buying something anyway. Which type of consumer are you?

If you fall into the overspending category, you are not alone. Millions of Australians are currently struggling to pay off credit card debts because of their poor spending habits. But what exactly causes this?

One major problem is the overabundance of credit card offers and loan “deals” being offered by various companies. Desperate for customers, they begin undercutting each other by offering the lowest introductory rates to encourage more people to flock to their business model. However, once you get sucked in, it’s hard to get out. These companies are in business to make a profit, not to benefit you on all fronts. As such, even though the application process is quick and simple and the credit limit is more generous than your budget would have been, keep in mind that it’s going to cost you later on. Even if you “qualify” for a greater line of credit doesn’t always mean you should automatically start spending at that level, because that could spell years of minimum balance payments wrought with interest tacked on top.

The term, “Live within your means” comes in handy here. This is the best way to avoid getting trapped in these seemingly harmless credit card and loan deals, even if that means you can’t buy everything you want now and wait until later to start paying it off.

And it’s not just the credit card or loan companies that are trapping customers these days. Stores are doing it too, albeit in a much more subtle and sneaky way. To encourage spending, many stores have been offering discounts and sales, especially “Buy One Get One Half Off” deals (or others like that). Why? Because psychologically speaking, customers usually can’t pass up a deal as good as this, even if they don’t need the second item. You may have only come in to buy one new pair of pants, but with the second pair of the more expensive brand 50% off, you’re statistically more likely to opt for the expensive brand in order to qualify for the deal. This is why companies market the deals and discounts they do, even if it seems like they’re losing money on the outset by offering such a favourable price on items.

How can you prevent the urge to give into these traps when going into a store? For one, bring a limited amount of cash and no credit cards. This will force you to stay within a set limit without the option of resorting to the plastic. Also limit the time you spend in a store. After all, the longer you have to mull over a purchasing decision, the more likely you’ll be to get it regardless of its negative financial implications. Finally, don’t shop while you need to be somewhere else or when you’re really hungry, because these factors alone can influence your decision when going to the check out line.

Another problem seen with the overspending crowd: emotional purchases. In a time of economic instability, many people have turned to using credit cards to buy things to cheer themselves up. Having a rough day? Just swipe the plastic and get that new phone upgrade you’ve been wanting. If you’re looking for long term financial solvency, then you need to nip this overspending habit in the bud now and avoid emotional purchases at all costs. When you are hooked on buying things in order to create a positive emotional response, then you are essentially treating shopping like a drug, and soon you’ll need buy more and more in order to maintain that level of euphoria you’re seeking. This is the number one problem of over-spenders and can be avoided by some rational shopping list planning and budgeting tactics.

Overspending doesn’t have to be a problem if you’re willing to put in the effort required to cut back on bad habits and limit yourself, even when your brain is begging you to pull out the credit card and make that impulse purchase “just this once.” Your financial situation will thank you for it and your credit score will be in much better shape than others around you who consistently give in to their overspending desires without any sort of restraint.

This article was written by Justin Toladro from Life Insurance Finder. An Australian owned comparison website the offers the best life insurance for you and your family.

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This is a guest post by Kristy Ramirez of Life Insurance Finder Australia.

There are two main avenues available for you to secure a financial safety net for yourself and your family.

One, of course, is a life insurance and disability insurance policy. This type of protection will ensure that you will still retain an income stream should you become disabled.

Never set store in the belief that ‘it won’t happen to me’ because every day someone is disabled as a result of a car accident, sport injury or disease, even pregnancy. Luckily, life insurance is a means by which you can leave your family sufficient funds to enable them to continue living the life they have become accustomed to with your earnings, should you happen to die from an unforeseen accident or illness.

The other way to secure a financial safety net for your family is to live a life free of debt. Once you have paid off all your debts and are able to resist taking on new debt, you will be on the way to building savings that will allow you to buy the things you actually need and remain debt free in the process.

The five techniques to get you out of debt and to secure your own financial safety net outlined here could be just what you need to get you started on the right track right here and now. It consists of the following:

1. Ensure you are insured.

First and foremost make sure you have a sufficient life and disability insurance cover that will protect you. It is too late once you become disabled, or if you should die and leave your family with all the debts intact and no way of paying them, let alone carry on with life in a manner that you have planned. Your life and disability insurance can be the foundation on which you will mount your financial safety net.

2. Stop taking on new debt from this moment on.

There is no room for procrastination, if you are sincere in your wish to secure your financial future it is time to start right now and not take on any new debts. Bring your family together and obtain an agreement that no new debt will be tolerated. What you presently have will have to do until you have control of your finances once again. No loan for a new car, no refinancing of your mortgage to gain access to your equity in your home, no more credit card applications, if fact get the scissors out and cut all your present credit cards in half. Make use of a debit card instead.

3. Start tracking where your money goes.

Sit down and place all your debts out in front of you. Place all your ongoing bills in one area, loan agreements in another along with credit card statements etc. Go through all of them one by one creating a list of all your debts and how much you have to pay out each month. Then make a list of all your essential living expenses, such things as power bills, rent or mortgage payments, food expenses, petrol, everything! You now have to place your payslip down along with details of any other earnings you may enjoy each month.

Mathematics will now tell you where you stand financially. Repeat this exercise every month and you will soon become conscious of where your money is going. Financial experts tell us that by doing this on a regular basis you will reduce your spending by up to 10 percent.

4. Approach creditors for a better deal.

Rather than consolidating all your debts into the one debt, approach yours creditors first to see if they can lower your interest rate and give you easier terms. This might entail new loans but if a lower interest rate can be obtained it will be worthwhile. If you choose to consolidate your debts the larger amount taken out will attract greater interest despite a lower rate simply because of the effect of compounding interest. Ten percent of $1,000 is less than 10 percent of $10,000.

5. Develop your own repayment program.

Now you know exactly where you stand, list all your debts with the one containing the highest interest rate at the top and the lowest rate at the bottom. Find out the very minimum you have to pay each month on each and pay that amount on time without fail. Any extra money you have left over can be used to pay more off the debt attracting the highest interest. When that debt is paid out do the same with the next debt in line and so on until all debts are cleared.

Once you have control of your debts it will become easier to save and with adequate life and disability insurance covering you against any mishap that is out of your control your family and yourself will enjoy a secure financial safety net, where you are in full control.

Kristy Ramirez writes for Life Insurance Finder Australia, a free life insurance comparison website, where she helps people to compare and select the best life insurance policy to meet their needs at the cheapest possible price.

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Yesterday I wrote about how saving a few dollars here and there can add up to substantial savings.

If you haven’t read it, check out the article, the numbers in today’s article are based on a few dollars saved just by turning out lights, buying bread on sale, eating one less takeaway meal per month, walking a bit more, switching phone plans etc.

In other words, easy, doable savings.

What yesterday’s article didn’t take into account was compound interest. While saving a few dollars here and there can certainly add up to significant amounts, when you take into account either interest earned on your savings, or interest saved by using your savings to pay down debt, that’s when things get interesting (pardon the pun).

Here are a few examples of how to super charge your small savings.

1. High interest savings account

If you were to put your $121 monthly savings into an envelope under the mattress, at the end of five years you would have $7,260. That’s a nice little emergency fund.

Of course, few of us stash cash around the house, so what is the result of putting your money into a savings account with a modest 4.5% interest rate?

After five years you would have $8,124 in total and would have earned an extra $864 in interest. That’s an extra 7 months worth of savings.

2. Pay down personal debt

On the other hand, you could use the money you save to pay down personal debt. Here’s an example:

If you had a $10,000 credit card debt at 13% interest and with monthly repayments of $400, it would take you 15 years to pay off your credit card (assuming you stopped using it) and you would have paid $4,412 in interest over the 15 years.

With the extra $121 put towards repayments, you will pay your loan off in just 23 months and save $3,140 in interest.

That’s $2,276 more in your pocket than if you put your money into a savings account.

3. Pay down your mortgage

I want to write about this option in detail next week. In the meantime I will say what you already know: the more you put towards your mortgage, the more money you save on interest over the period of the loan. And as mortgage interest rates are higher than saving account rates and because extra repayments aren’t subject to tax, this option can really super charge your savings.

In fact, paying extra on your mortgage can quite literally save you tens of thousands of dollars in interest over the period of your mortgage.

4. Other options

Of course, you could spend your savings, there’s nothing wrong with that. It’s great to save money by not wasting electricity so that you can afford the things you really want (I’m dreaming of an SLR camera myself). Other options include:

• investing your savings in shares, investment funds, bonds, property etc.
• putting your savings towards your superannuation (if you’re my age, you could end up with over $100,000 extra at retirement by paying an additional $1,400 a year)
• donating your savings
• going on a Caribbean cruise

It’s up to you.

So if you ever wonder whether it’s worth the time and energy to save a few dollars here and there, know that those few dollars can add up to significant amounts, particularly with the power of compounding interest, whether it’s interest earned, or interest saved.

Do you bother saving the small amounts?

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