The Gold Coast Bulletin

Curb spending to match our income

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ACCORDING to the latest Budget review, in 2016-17 the revenue generated is expected to reach $416.9 billion, an increase of 5.2 per cent on the previous year.

But total expenses for 201617 are expected to exceed earnings, climbing to $450.6 billion – which means we are spending more than we earn. This is never good. In 2016-17 it was expected the Government would rake in about $201.3 billion from individual income tax, the biggest money earner, followed by company and resource taxes ($71 billion.)

Of the earnings, a large chunk was earmarked for social security ($158.6 billion) and health ($71.4 billion).

This year’s Budget is a long way off a surplus, set for 202021. While the Government still needs to balance the books, budgets in the home must also be addressed.

Ms Shourbaji said she watches her budget closely and tries to stick to buying Australian brands to support local businesses.

“I try to plan meals for the week and only buy what I need to try and avoid overspendi­ng,’’ she said.

“I would also love to be able to buy all organic but it’s just not financiall­y viable.”

She sticks to a strict shopping list and hunts for competitiv­e deals for other household costs including her utility bills.

GOOD AND BAD DEBT

Not all debt is bad.

But whether it’s the politician­s or whoever is running your household finances, killing bad debt is key.

Good debt is deemed as debt for major assets including roads, energy and broadband projects which can help boost the economy. Bad debt is borrowing for basic costs of government services.

Figures by NATSEM show in 2015-16 the estimated net public debt was tipped to be around $278 billion or around 17 per cent of GDP. Their findings showed the amount each Australian carries in public debt is more than $11,000 or the equivalent to 12 weeks of work.

Tribeca Financial’s chief executive officer Ryan Watson said people should steer clear of bad debts such as credit card wherever possible – and if they do have a card it should not have a limit higher than $3000.

“All credit debt should be paid off on a monthly basis – no exceptions,’’ he said.

“High interest debt such as credit cards drown the financial aspiration­s of tens of thousands of Australian­s each year.”

Ms Shourbaji said her home loan is her biggest expense and she used a mortgage broker to ensure a good deal.

When it comes to bad debt she decided to get rid of her credit card.

“I had a credit card years ago and used it badly so I ended up cutting it up,’’ she said.

When it comes to home loan debt – good debt – Mr Watson said borrowers should not have mortgage debt that is more than 80 per cent of the value of their home

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