For those getting ready to stride into the world of home ownership, the uncertainties of pre-approval can cast a shadow of doubt over an otherwise exciting time. When is it necessary? How long does it last? And what does it involve, exactly?

Pre-approval is a lender’s assessment of your likelihood of being approved for an otherwise suitable loan. The appraisal is made on the basis of your ability to service a loan by looking into your living expenses and liabilities, your credit history, your employment circumstances and how often you have moved home or employment in the recent past.

As it is performed prior to a property being found and chosen, it does not take into account the particulars of a specific property and valuation, which is why uncertainties can arise.

Pre-approval is helpful for those who want to know how much they can borrow before attending open homes and can be reassuring for new borrowers.

When someone gets pre-approval they can start looking at properties knowing how much they can borrow. They know what their price range is and can take comfort in knowing that a lender has looked at their application to make sure it meets policy.

Pre-approvals are usually valid for up to 90 days but, depending on the lender, may be renewed to allow more time to find a property.

It is very important to note that a pre-approval is not a guaranteed loan. It is your potential lender’s way of signalling how much they expect to lend you. This may change on your official application.

Lending policies are changing day-to-day, week-to-week at the moment so anyone with a conditional approval, it’s a good idea to speak to your broker to find out if any policies have changed.

Another thing that may cause a lender to decline your loan application after pre-approval is a change to your pre-approval circumstances. So, things like obtaining another credit card or car lease, or any other debt may affect your ability to service the loan.

Your pre-approval will also usually be conditional on a property valuation. If your lender does not deem the property a marketable asset, they may not approve a loan.

Pre-approval is not a guarantee but is a very useful tool for anyone looking for a property.

Integrity One’s Mortgage & Finance Association of Australia accredited Finance Brokers Nic Berry and Tom Bailey are  happy to help you with your pre-approval before you lock in your Saturday open home schedule.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Integrity One Facebook

Nicholas Berry Credit Representative Number 472439 and Thomas Bailey Credit Representative Number 472440 are Credit Representatives of Integrity Finance (Aust) Pty Ltd – Australian Credit Licence 392184.

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. These articles are not owned by Integrity One Planning Services. Please consult your adviser before making decisions using this information.

Even the best budget can unravel if the right tools are not in place. Here we talk about how to stick to your spending plan.

It’s easy to underestimate what we spend – by day, by week, by month.

It’s also common to put off budgeting until you have some money. And how easy it is to let things slide?

But when we finally get around to working out a decent, detailed spending plan the job’s not done. Now the hard work begins. Here are five tips to help you stick to your plan.

Stocktake. Spending more than you earn?

Subtract your total weekly expenses from your total weekly income. How’s it looking? Hopefully—ideally—you’ll have more coming in than going out. Over time you’ll be able to save—and build up your reserves.

First, you’ll want a buffer in case things go wrong. Financial advisers used to suggest having six month’s spare cash in the bank. When this seemed out of reach for most, they talked instead of having three months in reserve—but many people struggle to even have one.

Living month to month is stressful enough; living week to week even more so. Getting your finances into a stable and sustainable place is the goal. Properly accounting for income and outgoings is the first step.

Cut costs

You may be able to increase your income, either through taking on a second job or cranking out a genius invention. More realistically, the quickest way to improve your personal bottom line is to cut costs. Curb unnecessary spending.

Go through your expenditure. You’ll find there are fixed costs (e.g. rent or mortgage payments) you can do little about, and other areas where you could cut but it may be unwise to do so (e.g. insurance). Unfortunately, the areas where you can make greatest savings—your discretionary spending—are often the things that are most fun. Going to the movies, big Friday nights ou, or that annual Bali break with the girls.

Once more, the crucial consideration is ‘balance’. You can draft an extreme austerity plan, but you’d be unlikely to stick to it. Be realistic. Don’t introduce cuts across the board or take $20 off food without knowing what you can (and will) give up or change.

Have a goal

It’s easier to keep to a plan if you have a goal you’re working towards. It might be something humble like a pair of shoes, a cast-iron wok, or a new cricket bat. Or it could be bigger ticket items like a car, an overseas trip or your first home deposit. Or perhaps you’ve got debts you want to pay off.

Having a plan keeps you focused and makes spend-ups and blow-outs less likely.

Sort your day-to-day money management

Set up a system that makes saving automatic—and limits your ability to spend more than you’ve budgeted. It’s a good idea to consider setting up several bank accounts, with direct debits into (or out) of each.

For instance, you might have a general account where your wages are paid into. Each week, money is diverted from here into a designated ‘House’ account (for your home deposit). Don’t touch this. You might have another couple of accounts—a smaller one where you trickle money in for that trip-of-a-lifetime to New Zealand, another for a fund for big, occasional bills (vehicle maintenance etc.).

Your goal? Each month your overall financial position should be stronger than the month before.

Track your progress

Check your finances each month to see if your savings and spending plans are on track. If you’re extra organised—you may want to fill out your own Statement of Financial Position in Excel.

Don’t just look at the bottom line. Where are you over? Where are you under? What little fixes could bring things back into line?

Are your targets realistic? Remember the best spending plans are regularly reviewed and refined. They evolve over time.

We’re here to help

A financial adviser can provide you with advice to help you manage your debts efficiently. To find out more, contact us today.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

None of us like paying late payment fees on our credit cards. The good news is there are simple ways to avoid late or missed payments that we can share with you. Here are our tips to help you avoid missing a credit card payment and being charged a late payment fee.

Check your credit card statement

To avoid a late payment fee you need to pay your ‘Total minimum monthly payment’ by the statement ‘Due date’. Just remember, making the minimum payment by the due date is not enough to avoid paying interest.

You can find your ‘Total minimum monthly payment’ and ’Due date’ information on your monthly credit card statement.

Online credit card statements

Waiting for your statement to arrive in the mail only reduces the amount of time to pay. You can generally register to receive your credit card statements online through internet banking. Then you’ll receive a reminder when they’re ready to view. You are then usually able to access your statements anytime and from anywhere you have internet access.

Pay during your statement payment ‘window’

Find out how many days make up your payment ‘window’ – which will vary by type of credit card. To avoid a late payment fee you must pay at least the minimum monthly payment on your statement, during this period.

Keep in mind that BPAY payments, cheque payments and transfers from different bank accounts can take several days to receive and process and your payment must be received by the payment due date.

Early payments

You can make payments before your statement period ends to help reduce your credit card balance and stay under your credit card limit. But, you’ll still need to make the minimum monthly payment shown on your statement to avoid a late payment fee.

Set up reminders and automatic payments

We recommend you either set up an email or SMS payment reminder (where this is available) or a direct debit through internet banking to avoid missing a payment, especially if you’re going on holidays.

If you’re in financial difficulty

If you’re struggling to make your credit card repayments because of financial difficulty, contact your bank to talk about your options.

If you are charged at late payment fee.

In the event that are charged a late payment fee it is worthwhile contacting your bank and try and get the fee waived particularly if you have a good history of on time payment.

We’re here to help

A financial adviser can provide you with advice to help you manage your debts efficiently. To find out more, contact us today.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

Let’s support a good cause!

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

Working out a realistic spending plan is a great way to take control of your finances. Although it may seem like a chore, it’s the crux of sound – and sustainable – financial management. In this article we look at how to ‘do the numbers’.

A spending plan shows you how much money you’re earning, how much you’re spending, and how much you’re saving.

While it can be tempting to put it off, creating a realistic spending plan can help you hit your savings goals faster. Let’s start with the numbers.

Work out your current income

For most of us, this is a matter of checking our payslip or salary credit and seeing what we get (after tax and super). It’s trickier if you’re a contractor or self-employed, or if your income varies wildly from month to month. If your income varies week to week, you could use your last annual tax return as a starting point -and work out your average weekly net income (after business expenses, GST and PAYG). It is important to consider whether you anticipate any significant changes to this level of income going forward.

Do you have any other sources of income- for example, interest from investments, dividends from shares or rental income from an investment property? You can also factor in any income received (net of expected expenses and tax) from these sources.

Work out your spending

It can be easy to underestimate how much you spend on a day-to-day basis. But in order to create a realistic spending plan, it’s important to find out how much you’re spending, and on what.

Firstly, take a good hard look at your bank statements. Go back over the past two or three months and make a note of everything you’ve paid for. Remember there are some hefty costs which are important to factor in, which only come up once every year, like car insurance and registration.

It’s helpful if you group things into categories. Let’s start with the basics: food, clothing, housing, transport, communication and insurance.

Housing expenses

The biggest expense you’ll face is probably your rent or mortgage repayments. If you own your own place, you’ll also be hit up for home maintenance (repairs), home and contents insurance, rates, and utilities (gas, electricity, water etc.).

Food and drink

This includes your groceries, but also your takeaway lunches and evening feasts out. Don’t forget those coffees and other incidental snacks – it all adds up.

Clothing

You might want to divide this category into your work clothes and your fun clothes to sort out what’s necessary and what’s not. If shoes are your thing, you’ll need to account for these too.

Transport

The costs of running a car or using public transport can easily add up. Fuel’s just the start—there’s parking, repairs, preventative maintenance and insurance, or maybe that taxi home on a Friday night every month or so.

Communication

Consider the bills for your mobile, internet and (if you still have one) landline charges.

Insurance

If you have any sort of insurance – health, life, medical, or perhaps income protection – you’ll be paying premiums. They may be yearly or monthly, but make sure they’re factored into your final spending plan if you pay the premiums on your own, and not via superannuation.

Health and wellbeing

Although these costs might be occasional, your spending plan should take into account things like medical spending (including the dentist) and pharmaceutical costs.

In this section you can also include lifestyle costs like gym membership and sports club fees.

Life and leisure

Think about all those incidental costs that pop up over the year: magazine and TV streaming subscriptions, weekends away, movies, Christmas and birthday gifts.

Replacement costs

Every now and then, you’ll unfortunately have to replace the fridge, the washing machine, the TV, the lounge suite etc. Replacing these items can make a significant dent in your savings if you don’t have a plan in place to prepare for them ahead of time.

Debts

This includes personal loans, credit cards, store cards and other loans, and the interest that comes with them.

Miscellaneous

This is where you’ll budget for everything else that doesn’t fit within the categories you’ve laid out. These might include pet costs, uni or office fees, childcare, beauty costs etc.

To help you get started, visit the government’s MoneySmart website which has a comprehensive section on budgeting that’s worth a look.

We’re here to help

A financial adviser can provide you with advice to help you manage your debts efficiently. To find out more, contact us today.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

Welcome to the next in a series of videos featuring Integrity One staff members sharing stories of day to day experiences which may be of interest to you.

Today we hear from Nic Berry – Financial Planner & Mortgage Broker – who has a good news story involving a young couple he was was able to help secure a loan for their first home

Click to watch Nic’s story.

To speak to Nic or another Integrity One staff member regard this or any other financial financial planning or accounting matter please call on –

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.