May Personal Finance Wrap
May Personal Finance Wrap
May 29, 2018 .

Each month we provide a wrap of the biggest issues in personal finance.

In May, the fallout from the Royal Commission into the financial services sector continued with the Reserve Bank of Australia (RBA) warning that the banks may restrict the amount of money they are willing to lend thus impacting house prices. May was also budget month – like every year there were both winners and losers in the 2018 version. There were also a couple great articles highlighting how apathy towards our financial products (or “The Lazy Tax”) can cost us thousands and thousands of dollars.

Will the Royal Commission impact House Prices?

In last months wrap we discussed the Royal Commission into financial services, we also wrote a post about trust in general. There are now worries that the outcomes of the commission could see a fall in house prices as the RBA warns that the banks may restrict the amount of money they are willing to lend. A large driver behind the property boom in recent years has been easy access to credit (i.e mortgages) however, if banks make it harder for consumers to get loans, or limit the amount they can borrow, then buyers will arrive at auctions with less amount of money to bid.

Budget Month

May is budget month – this article provides a good snapshot of who the winners and losers were in the 2018 edition. A couple winners were middle and low income earners who will receive a tax offset of up to $530 per year while older Australians will receive $1.6bn over the next four years to increase the number of home care places by 14,000. Interestingly, the federal budget also discussed the royal commission warning that there was “a risk that household spending may be affected by any unanticipated financial conditions, possibly as a consequence of the royal commission”.

Stop Paying the Lazy Tax

Apathy towards our mortgage and superannuation is very costly – as this article highlights over half of us suspect we are getting ripped off on our mortgage but we are too lazy to do anything. Getting a 0.2% decrease on your mortgage rate can save you $1,000 per year or $21,000 over the life of your loan. This article, entitled “How ignoring my super for 19 years may cost me $400,000” shows how not doing anything about our super is also an incredibly costly exercise. We came to the same conclusion in our analysis.

Changing super and mortgages is is made easy with service like Plenty, we can analyse your current position, suggest the best alternative and then implement these changes; get started now.

The information contained on this page is of a general nature and may not be appropriate for your personal circumstances. You should obtain personal financial advice before acting on this information.

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