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| Making money: All too often hard-earned pay seems to disappear. Here are some tips on how to better manage your finances. |
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As a member of the ADF, you often face challenges and hurdles in training and in active service.
Managing your finances and securing your financial future can also seem like a daunting hurdle, something that may not be “top of mind” and which you might rather avoid.
However, we Australians are prolific investors and the variety and complexity of financial options are increasing. Buying a car these days, for example, is not just about the model and make, but also about the various options for financing and insuring your new purchase.
At the Australian Securities and Investments Commission (ASIC) we recognise that the nature of military service is unique.
As ASIC’s Chairman, I hope this, the first of a regular series of columns, will provide tailored and practical information that relates to your personal and professional circumstances.
And while financial choices are now unlimited, and sometimes more complex, it’s unfortunately true that fraudsters are getting smarter and using more elaborate scams to con people.
So, to help you and your family make confident and informed choices, while clearing up some myths, here are 10 top tips to get us started:
- Understand the basics: Before you sign up to a financial contract, make sure you understand exactly what you have agreed to commit or invest and what you get in return, including what conditions may apply in what circumstances (eg exclusions if serving in a particular region).
- Hold on to your paperwork: Read and keep your paperwork and make sure you understand the contents. Make notes of conversations you have about the product or service you are considering buying.
- Reduce your costs: Understand how fees are charged on your account or investment and shop around. Use ASIC’s calculators to work out their impact. You can find these calcaulators at ASIC’s consumer website at www.fido.gov.au.
- Is your financial adviser licensed? If you seek financial advice, make sure your adviser has a current Australian financial services licence – it’s against the law for someone to give financial advice, or sell a financial product, without one. Ask them or check with ASIC. Licensing provides you with important protections.
- Be careful with direct debit. Direct debits can make paying bills easy but make sure you know exactly when and how much is being deducted (so you can cover the payments and avoid extra fees) and know how to stop payments if necessary.
- Shop around for insurance: Take the same approach to selecting insurance as to planning a holiday. Shopping around, having the right policy and knowing what your insurer will and won’t cover can save you money both now and if you need to make a claim. Tell it like it is – don’t be tempted to massage the facts. If any details are incorrect your insurer may not pay your claim.
- Investing doesn’t have to be complex: It can be as simple as depositing money with a bank or perhaps investing in a blue chip stock. Don’t be tempted by complex products you don’t understand.
- Tax file number: Make sure you and your family provide your tax file number(s) to your super fund so you won’t be hit with extra tax and don’t risk missing out on the government’s super co-contributions.
Jeffrey Lucy is the Chairman of the Australian Securities and Investments Commission. He invites you to make suggestions and share your experiences by emailing ADFcolumn@asic.gov.au.
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Dr Brendan Nelson
Defence Minister
LATE last year I was privileged to officially launch the ADF Financial Services Consumer Council.
The Council’s principal role is to act as a provider of independent financial education to ADF members and their families.
This education, which will be released progressively over the next 12 months, is designed to assist you in making informed personal financial decisions.
I’m now delighted to introduce the Council’s first monthly educational column in the Service newspapers.
This month the column is written by Jeffrey Lucy, the Chairman of Australia’s financial services industry regulator, ASIC. ASIC’s support of the Council is very much appreciated.
While you work to secure our nation, its interests and values, we must make every effort to help you and your family in your financial security.
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