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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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