Ask the experts
A daughter’s education costs and increased savings are top of the list
NAME: William York.
STATUS: Father of Martha, 18 months.
QUESTIONS: What is the best way to set up a budget, increase my mortgage payments, establish financial goals and save? What are the savings options to fund my daughter’s future education? Am I on track for retirement? Is income protection insurance the most appropriate?
ANSWERS: Pay off your mortgage as fast as you can. Rather than setting up a plan to pay for Martha’s education, draw down on your mortgage. Budget by using different bank accounts for your goals. You need to increase your income protection cover either with AustralianSuper or a retail product that provides cover until you are 70 if you want to work that long.
Reviewing your financial products and services is a smart plan at any age. Are they still a good deal or have they been superseded by ones that have better features such as lower interest rates? Often they have. William York recently saved some serious money by shaking up his finances. He changed his credit card to one that includes free travel insurance; re-mortgaged his house, cutting his home loan interest rate from 4.2% to 3.88%; moved energy providers, slashing his electricity bill by 26% and gas by 16%; and switched super funds from MLC to AustralianSuper to reduce fees. He shops at Aldi instead of higher-priced supermarkets.
William wants to save more of his income and pay down his mortgage faster. He says his lifestyle isn’t lavish but he and his partner, Angelo, are feeling cost-of-living pressures and he isn’t saving as much as he would like. William wants to set aside funds for his young daughter’s education.
He has never had a budget but believes now is the time. What is the best way to set one up, increase his mortgage payments, establish financial goals and save?
William owned a successful professional photographic agency for 12 years, closing it in 2012 because of increasing competition. In 2015, the sad news that his mother had cancer prompted him to take time out of work and move into the family home to care for her.
As a result he had to reorganise his finances and sell his office. He changed careers and now has a good job with a reasonable wage. He owns a home in the inner city with a mortgage of around $190,000. What is the best strategy for paying down his debt?
In a clever decision, William contributed substantially to a super fund when he was self-employed and now contributes at the standard rate. Is he on track to fund his retirement or should he contribute more? He has income protection insurance but is it the best type of cover for his needs?