Plastic surgery gives the economy a lift

Plastic surgery gives the economy a lift

Forget tough economic times; Australians will spend around $850 million on cosmetic surgery this year, research suggests.

The most common procedures include breast reduction, liposuction, rhinoplasty (nose reshaping) and eyelid surgery, according to a study by IbisWorld.

Meanwhile, demand for non-invasive cosmetic procedures has been growing at a phenomenal rate for several years, with Australians spending about $560 million last year, up 25 percent on the previous year, IbisWorld estimates.

Formal statistics on the size and growth of cosmetic surgery are difficult to obtain as records are not collected on the industry in Australia. But the Australasian College of Cosmetic Surgery used sales records for botulinum toxin, better known as by the brand names Botox and Dysport, to estimate 1.5 million jabs had been administered in about 250,000 wrinkle reduction procedures in 2009. That was a 30 percent jump on the previous year.

Dr Jeremy Hunt, a plastic surgeon in Sydney and spokesperson for the Australian Society of Plastic Surgeons told Fairfax he has seen an increase in the number of people seeking non-surgical solutions to ageing.

“If you look at the trends coming from the American Society of Plastic Surgeons (ASPS), there is certainly an increase in the number of non-surgical interventions such as Botox and the use of fillers and I think Australia is embracing those products at the same kind of rate as the United States,” he said.

In 2011 cosmetic surgery gave the US economy a lift to the tune of $10.4 billion, with Americans undergoing 13.8 million cosmetic procedures and around 5.5 million reconstructive surgeries.

ASPS data shows that women were the drivers of the cosmetic surgery industry in the US, representing 91 percent of all procedures last year. While for American men, the most commonly requested procedure was nose reshaping. But eyelid surgery, liposuction and ear surgery also made the cut.

Chins were in last year, with the number of chin augmentation surgeries rising fastest by 71 percent from 2010. However, the most common cosmetic surgery in the US in 2011 was breast augmentation, with women spending an average of $3388 on a physician consultation, ahead of nose reshaping at $4422 for the average consultation, according to ASPS. Rounding off the top five cosmetic surgeries for 2011 in the US (by number of procedures) was liposuction ($2859), eyelid surgery ($2741) and facelift surgery ($6426).

Most health insurance policies in Australia don’t cover the cost of cosmetic surgeries to enhance appearance, and patients will typically need to foot the bill – which can run into the tens of thousands of dollars, depending on the procedure. You could take out a personal loan or use a credit card to pay for a procedure, but an automatic savings plan will help you reach your goal debt-free.

For instance, if you deposit $1000 into a high-interest savings account paying, say, 5.5 percent interest and add $250 per month you’ll reach a goal of $10,000 in less than three years, assuming the interest rate remains steady.

By comparison, spending $10,000 on a credit card and making only the minimum repayment each month (around $200) at a rate of 14 percent could see you forking out an extra $13,567 in interest and take you more than 36 years to repay the debt in full.

Costs aside remember, that despite the best efforts of plastic surgeons to deliver a more youthful appearance, the ageing process is an inevitable reality.

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Learn more about savings accounts

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

Should I open a Commonwealth locked savings account?

If you have trouble saving money, a Commbank locked savings account could be a potential solution. A locked savings account won’t let you make withdrawals and as such, it can help you grow your savings balance if you keep topping it up. 

The Commonwealth locked savings account advertises high-interest rates and minimal maintenance fees, along with a host of other incentives that will encourage you not to touch the money. 

The account offers a higher interest rate for each month that you make limited or no withdrawals, as well as regular deposits. 

To qualify for a Commonwealth locked savings account with the advertised features, you will need to fulfil specific criteria such as:

  • Depositing a fixed minimum amount into the account every month.
  • Making a fixed number of deposits each month.
  • Making a minimum or no withdrawals each month.
  • Maintaining a minimum account balance.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly.