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Press Release

Spring clean your finances with GE Money's top tips

October 04, 2012


The weather is warming up and summer is on its way. While many of us use this time of the year to spring clean the house and backyard, it's also a great time to give your finances a once over. Taking half an hour to look at a few ways you and your family can improve your budgeting and spending habits could help you save you more than you think.

The weather is warming up and summer is on its way. While many of us use this time of the year to spring clean the house and backyard, it's also a great time to give your finances a once over. Taking half an hour to look at a few ways you and your family can improve your budgeting and spending habits could help you save you more than you think.

To help Aussie consumers take control of their personal finances before heading into the busy Christmas and traditional holiday period, GE Money Managing Director Tom Lucey has put together his top tips to help get your finances in shape this spring.

1. Create a budget and stick to it. The secret is to budget regularly and efficiently. Having an accurate picture of your finances allows you to prioritise costs and determine the most efficient way to pay for them.

Using budget planning tools is a great place to kick off the budget planning process. The Australian Securities and Investment Commission has a budget planning tool freely available on its MoneySmart website at https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/budget-planner and most financial institutions provide similar tools, like GE Money's Budget Planning Tool, available at http://www.gemoney.com.au/en/calculators_tools/.

It's important to use your spring clean as an opportunity to ensure you're up to date with your 2011-2012 tax return and factor in the upcoming festive season. When creating or updating your budget be sure to consider the extra expenses that pop up.

"While setting a budget may seem daunting at first, once you start working out the details you'll understand where your money is going, what you can afford and where you might need to tighten your belt. And remember, once you've done the hard work in setting your budget -- make sure you keep it somewhere you'll see it daily, such as your fridge, so you don't spend more than you can afford each month," Mr Lucey said.

If you have a smart phone it's worthwhile taking a look at the range of free and paid budgeting apps that can provide a convenient way to track your daily spending on the go and keep you focused on sticking to your budget.

2. Investigate consolidating your debts if you feel you're a bit out of control or need to simplify your money matters. One monthly repayment at one fixed interest rate is usually much easier to manage than multiple rates due on multiple dates.

3. Select payment methods or products to suit your budget and ability to pay over time. For smaller items this often means paying cash. However, for larger items if you don't have the cash immediately available there are several ways to pay which may suit you, such as credit cards, interest-free retail promotions, personal loans, or lay-buys.

Mr Lucey said: "The key is to look at the cost of credit in each case and shop around to find the product that best suits your needs. Make sure the payment method or product you choose fits your ability to repay what you've borrowed."

For example, credit cards have different features to suit different lifestyles and spending habits. Some have lower interest rates, while others offer loyalty programs, longer interest-free periods, or lower or no fees.

Many consumers find that using credit card reward points is to their advantage, getting free flights, or other rewards. But if you don't pay off your credit card or loan on time, you may be incurring unnecessary interest charges.

"Be sure to check interest rates, late fees, annual fees and over-limit fees before you sign up for any credit card product. Think about what is most important to you based on your spending patterns and budget, and ensure your card suits your needs," Mr Lucey said.

4. If you need to borrow money for larger items like holidays, cars, weddings, household goods or renovations, explore all options. It's important to consider different financial products and their various features, as for some people, taking out a personal loan or interest free offer could make sense.

Personal loans generally offer lower interest rates than some other consumer finance solutions, but repayment times can be much longer so make sure you check the fine print. Most personal loans can be approved in 24 hours and you can build a favourable credit rating with the lender by making prompt and full repayments over time.

Interest-free retail promotions typically offer six to 36 months on interest free terms and can be the smartest way to shop for big-ticket items like televisions, white goods and furniture.

"The key is to pay off the entire amount within the interest-free period and, like over 70 per cent of GE Money's customers, you then avoid paying any interest at all when you purchase using interest free promotions," Mr Lucey said.

"Before taking on any interest free deal, ensure you can comfortably afford monthly repayments that clear your debt in the interest-free period. It's a good idea to set up a direct debit so your payments are on time and you avoid any late payment fees," Mr Lucey said.

"A common misconception is that an additional fee applies if the loan is paid off before the end of the interest-free period. For example, with GE Money's interest free promotions you are free to pay off the balance in your own time, as long as you're meeting any required minimum monthly repayments. Interest is only payable on the outstanding balance once the interest free period has ended and interest is never back-dated to the original purchase date," he said.

5. Read the fine print. It's important to check the detail on any financial product you're considering so that you understand what your obligations are and how much it'll cost you.

With interest free promotions check the interest rates that will apply if you don't pay off the whole amount within the interest free period, establishment fees and monthly account service fees.

It's a good idea to check the fine print on your financial product if you are shopping online. Quite often purchases with international sites will incur a currency conversion fee by your financial institution, so double check before you click.

With personal loans, check establishment fees and monthly fees and watch out for annual service or maintenance fees on the loan that are either a flat fee, or a percentage of the lump sum. Also, check payment options to ensure the loan has the flexibility you need.

With credit cards, check interest rates, late fees, annual fees and over-limit fees.

" GE Money has eliminated, direct debit dishonor fees, cheque dishonour fees, fees for "tracing" customers who have forgotten to tell us they have moved, and fees for providing statement reprints on all consumer products, including store and credit cards, personal and auto loans," Mr Lucey said.

6. Pay off as much as you can each month and don't skip your regular repayments. Manage your spending on credit cards and make regular repayments on loans to avoid getting into financial difficulty. Work out the amount you need to pay off every month (it is best to pay more than the minimum amount if you can) and set a realistic credit limit. Remember, late or missed payments may count against you when it comes to your credit history.

Finally, Mr Lucey said: "By following these easy tips, we can get in control and on top of our finances."

- ends -

For media enquiries please contact:
Louisa Walsh
GE Capital
Australia and New Zealand

T +61 (0) 3 9921 6725
M +61 (0) 404 099 246
E [email protected]

Katie Lennon
Corporate Communications Leader
[email protected]
+61-2-9324-7095
+61-(0)-406-316-907


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