The monthly newsletter of Sheila Freeman Consulting Issue 11, November 2003   In this Issue: From our Quote Collection: "The expert at anything was once a beginner." -Hayes "He who dies with the most toys is, nonetheless, still dead." -Unknown "You’d be surprised how much it costs to look this cheap." -Dolly Parton "Money talks; the secret is to hold it long enough to hear what it says." -W.G.P. Welcome to the latest issue of "Smart Money". This month we look at the truth on when you can and when you can't get early access to superannuation funds; tips on planning ahead for a lower-cost Christmas; and just who do the banks think they are fooling when they say "customers are better off"? Warm regards Sheila Freeman Email me Money solutions at your fingertips... Let us show you, step by step, how you can take back control of your money and your life! Money Management for Women by Sheila Freeman and Helene Richards is a treasure-trove of "easy to action" advice at your fingertips. Sheila has distilled 15 years of her experience as a financial counsellor in Australia into a simple, easy to understand guide that tackles head-on, the issues of money management from a woman's perspective. We'll let you into a secret - men buy this book too! The entire "Money Management for Women" book is now available online as a download for only AU$19. Pay by credit card on our secure server and download the book immediately. more info >> Warning: False claims of early access to superannuation The Australian Prudential Regulation Authority (APRA) says it is receiving a growing number of inquiries about early release of superannuation. It seems that some companies and individuals are promoting early release schemes, and charging substantial fees for these schemes, usually in the form of a percentage of the member’s benefit. Consumers should be aware that: legislation prohibits the early release of unpreserved superannuation, except in exceptional circumstances the unlawful release of superannuation benefits can constitute a criminal offence the unlawful release of superannuation benefits could expose the recipient to tax liabilities and financial penalties under the Income Tax Assessment Act. The only grounds on which superannuation members can apply for the early release of their benefits are: Financial hardship: Applications for release on the grounds of financial hardship are determined by the trustees of the member’s superannuation fund. Generally, funds are released for everyday living expenses and are limited to one payout of no more than $10,000, including tax, during a one-year period. A superannuation fund can only pay an early benefit if: the member has been receiving Commonwealth Government income support for at least 26 weeks without any break, and has a letter to this effect from the paying agency; the trustee of the member’s fund is satisfied that reasonable and immediate family expenses cannot be met; and the fund’s rules allow the payment.   Specified compassionate grounds: Applications for release on specified compassionate grounds are processed by APRA, and money can only be released by a fund if APRA approves the application and if the rules of the fund allow the payment. Legally, benefits can only be released early on compassionate grounds to pay for expenses related to: medical treatment medical transport home or motor vehicle modifications required because of a severe disability palliative care or associated expenses mortgage repayments to prevent the mortgagee from selling the property expenses consistent with one of the above. Superannuation members legitimately requiring access to their preserved benefits are advised to contact their fund. Case Study Helen and John have a mortgage of $180,000.00; John was supposed to be making the mortgage payments. Helen was unaware of John’s gambling. One day Helen came home from work early, collected the mail, and discovered that their mortgage had not been paid for the previous four months – the bank was commencing legal action to obtain possession of their home! Helen and John consulted a financial counsellor, who advised them to apply to John’s superannuation fund for the release of benefits to bring the mortgage up to date. John was referred for counselling about his problem gambling. Before an application could be made to APRA, they had to obtain a letter from their bank stating the amount of the arrears and an approximate amount of interest payable over the next twelve months. (Most financial institutions have a standard letter that is issued in such circumstances.) With the support of the financial counsellor, Helen took control of the household finances. Do you know how to avoid becoming a victim of Sexually Transmitted Debt? Money Management for Women gives you the answers! Tips for Travellers The 3rd edition of Lonely Planet's 'Europe on a shoestring' is now available. This rather large guide (1,329) provides priceless information for travellers on how to eat, drink and sightsee through Europe on a budget. It covers over 40 countries, contains 160 comprehensive and up-to-date maps, and is well worth its price of $39.60. Countdown to Christmas With less than three months to go until the festive season, it is time to consider ways in which you can save money for – or at least spread the cost of – this very expensive time of year. Here are our suggestions: Start planning for Christmas dinner now. Buy a few extra items at the supermarket each week (for example, apple sauce, cranberry sauce, wine) and put aside in the pantry. Or you can put in an advance order for your ham or turkey from your butcher and pay it off each week.   It’s not too late to save. Put aside a set amount each payday (e.g., $20 per week means you will have $180 saved in the next 9 weeks).   Make your own gifts. Think of all the ways you can use your talents to make personal gifts at a low cost to you, for example, pot some cuttings for a garden-loving friend, bake shortbread or Christmas puddings, sew or knit items of clothing, write a poem, frame a favourite photograph... Home-made items will be treasured just as much as, or more than, shop-bought gifts.   Check out the sales. There are lots of sales on at the moment where you can get bargains in clothes and other goods for family members.   Make gift baskets. Lots of small items purchased over several weeks, such as CDs, books and cosmetics for teenagers, or jams, biscuits and puddings for an elderly relative, can be put into baskets for a much appreciated gift.   Buy at bargain shops. Markets, and the $2 and Reject shops, are great for economical cards, gift wrap, decorations, jewellery, knick-knacks, and so on.   Send your overseas cards via the internet. Save both card and postage costs by emailing your Christmas greetings to friends overseas (see www.hallmark.com).   Limit gift-giving. If Christmas spending is getting out of hand, suggest a 'Kris Kringle' system as is done in offices and schools, i.e. each person has to buy one gift only. All names go into a hat and each person selects one name; they then have to buy a gift, within a set price, for that person.   Give a personal voucher. If you'd like to do something special for friends or family members but have no money, make some attractive booklets of 'coupons' which promise a variety of deeds such as babysitting, running errands, weeding, dog-walking, lawn-mowing, car or window washing, etc.   Recycle. Christmas wrapping paper and cards can be costly. Cut Christmas motifs from last year’s cards and use as gift tags (this is something children enjoy doing). Also, you could reuse any wrapping paper from last year that’s still in good condition. Remember, small savings like these can make a substantial difference to the overall cost of Christmas. Rising Bank Fees A recent report from the Payment Systems Board of the Reserve Bank shows that bank transaction fees have increased by 262% in just eight years! Though banks claim that customers are better off overall because of savings in other areas, the report found that, between June 1995 and June 2003, counter withdrawals are costing 150% more, cheque processing 93% more, EFTPOS 12.5% more, own bank ATM withdrawals 50% more, and other banks’ ATMs 262% more. These high increases in charges are part of the banks’ strategy to encourage customers to use telephone and electronic banking services. (Source: Ian Royall, ‘User charges reveal banks’ hi-tech push, ‘Herald-Sun’, 3/10/03) Disclaimer Every effort has been made to ensure that the information on this newsletter is accurate. However, the information is not intended as professional advice and the authors shall have neither liability nor responsibility to any person or entity with respect to any loss or damages arising from the information contained in this newsletter. Want to opt out of this newsletter? Simply reply with REMOVE in the subject line. Copyright 2003 Sheila Freeman Consulting

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