Over a quarter of Aussies feel better about their finances than a year ago

Over a quarter of Aussies feel better about their finances than a year ago

Just over a quarter of Australians feel better about their finances than 12 months ago, according to research from the latest RateCity survey.

The survey showed that despite Aussies squirrelling away over $124 billion since COVID-19 hit, 31 per cent of respondents stated they felt better about their finances since this time last year

Earlier this week, Prime Minister Scott Morrison told Parliament the economic impact of COVID-19 on the global economy meant that the pandemic recession was “30 times worse” than what was experienced during the global financial crisis.

But despite these claims, nearly half (43 per cent) of respondents stated they felt about the same about their financial situation as 12 months ago.

In fact, only 26 per cent of respondents said they felt worse about their financial situation over the same period, making the volume of responses for those feeling better or worse somewhat simila

What is causing our concerns?

RateCity’s survey explored what factors are causing the greatest amount of concern towards our finances over the next 12 months

Health and travel concerns came out on top for Aussie respondents, with the majority of those surveyed indicating worries about family contracting COVID and not being able to travel (to see family or for holiday) were their greatest.

Finances were the next most common concern, with respondents nervous they will not have enough money and have strained budgets over the next year.

Thinking about the next 12 months, which of the following are you most concerned about? (Multiple choice)

Value Percent
Employment: Losing my job/business or not finding enough work. 27.80%
Health: Family member or I will contract covid-19. 42.30%
Finances: I won’t have as much money / my budget will be strained. 39.40%
Travel: That I won’t be able to travel to see family or for holiday 43.50%
Social: That I might go back into lockdown 31.70%

Source: RateCity.com.au Survey 2021

How to take back control of your finances

If you’re one of the many Australians concerned about your financial health or facing financial stress, there are some actions you may want to consider to take back control.

  • Shake up your budget

Whether you’ve never made a budget or are struggling to meet your current budget, it may be time to consider setting a new one. In the last 12 months it’s not surprising if your income has changed or that your expenses have increased. And in some instances, these changes can occur on a monthly basis.

Consider making a monthly budget based on your income and against any expenses you expect for that month instead. This way you’re prepared for any extra challenges that may come around, such as a quarterly utilities bill or a hike in school fees, as opposed to relying on an outdated rolling budget

  • Manage your debts

Debt can be a useful tool to help you tick off your financial goals but taking on much debt can put you into financial stress and overwhelm your budget.

  1. Consider if you can afford to make extra repayments on your debts to pay them off sooner and reduce the total interest charged.
  2. If you have multiple sources of debt, consider if consolidating them into a single loan with one interest charge to manage may help you take back control.
  3. Credit card debt can easily snowball if left unattended. If you’re tired of meeting just the minimum repayment amount, consider budgeting to pay off your card debt once and for all. If you need extra breathing room free of interest, a balance transfer credit card may be able to do just that. Just keep in mind that you’ll want to plan and prepare to pay off your balance before the zero per cent interest period ends or it may sting you with a higher-than-average interest rate.

 

  • Cut down your mortgage costs

Speaking of debts, your mortgage is arguably your biggest ongoing cost but there are ways you can reduce this to improve your financial health. If you’ve been repaying your mortgage for several years and have built up a bit of equity you may want to consider refinancing to a more affordable lender.

Whether you’re looking for a loan that charges a lower interest rate, fewer fees, offers more features or all of the above, refinancing may be able to help you in this regard. Simply hop online and compare your options.

RateCity’s comparison tools, such as tables and calculators, can help you compare apples with apples and see how other home loans may better suit your finances and reduce your monthly repayments.

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Learn more about bank accounts

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.

How do I close a bank account?

Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.   

  • Cancel any scheduled or recurring payments
  • Update your direct debit details (such as loan repayments) with creditors
  • Export your payee address book (to keep a record of saved third-party bank account details)
  • Transfer the balance of your account (to the new bank account)
  • Close your account online, or by calling the bank or visiting a branch

How do I open a bank account for a baby?

If you’ve just welcome a new baby into the world, congratulations. Opening a bank account for your child can be a wonderful first gift.

Before you can open your child an account, you’ll need to have a birth certificate or passport for your baby.

As the parent or guardian, you’ll also be listed as a joint holder on the account. This means you’ll need to have proof of your identification and address (a driver’s licence, passport, birth certificate or Medicare Card).

Many banks and credit unions offer baby banks accounts. Usually, you can apply online; otherwise you can head into a local branch or office with your documents.

How do I open a new bank account?

There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

  • A couple of forms of identification (such as driver’s licence, Medicare card, passport)
  • Tax file number
  • Residential address, contact phone number and email (though email is not essential)

How do I open a bank account if I'm under 18?

The good news for savvy young folks like you wanting to take charge of your finances is that there are many bank accounts available for under-18s.

For bank accounts that require you to be 18 or older, you’ll have to rope in a parent or guardian to open the account for you.

Otherwise, you can apply by yourself online or at the branch of the bank, credit union or building society that has the account you would like to open. 

If applying online, you might be asked for a form of identification. For under-18s, this could be a Medicare card you’re listed on, your birth certificate and/or your current home address.

In most cases, you can verify your identity online (at the time of applying) or at the branch afterwards.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

How can I find bank accounts in my name?

To find ‘live’ bank accounts in your name, you’ll have to ask individual lenders, which involves contacting them one by one and proving your identity each time. To find ‘unclaimed’ bank accounts (those that have been inactive for at least seven years), you can use this website.

How do I open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

Do you need a bank account to get a credit card?

To get a credit card, you need to show proof of income, which will almost certainly require you to have a bank account.

Can I find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.

Can I open a bank account in another country?

Despite having a bad rap for facilitating tax evasion, it is possible and legal to open a bank account in another country, also known as an ‘offshore account’.

Some people choose to open a bank account in another country to invest overseas, for higher interest-earning potential or to access foreign banking services.

The process for opening an offshore bank account differs depending on the financial institution and country in which you’re opening the account.

Typically, you will need to provide identification such as a passport, a local bank statement and a signed declaration proving the source of the money being used to open your account. Usually, deposits into offshore accounts can be made by international money transfer.

Do you need a bank account to sell on eBay?

You don’t need a bank account to sell on eBay. But if you don’t have a bank account, you must provide either a credit card or debit card.

How can I deposit cash into my bank account?

The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.