Your Money & You – September 2012

Track Your Spending

by Greg Medcraft, ASIC Chairman

In the ADF you’re used to tracking your movements and you understand the value of good intelligence reporting.  Knowing what situation you’re in is an important part of making informed decisions.   But how many of you apply the same discipline to your spending?

According to Australian Bureau of Statistics data, the average Australian household spends over $1,200 per week on goods and services. Yet how many of us really know where our money is going?

Our research shows many people fall into the habit of living pay to pay. That’s why ASIC has developed a new suite of tools to help Australians take control of their money.

Once you know exactly where your money is going, you can redirect it to where it matters most. We suspect many households end up leaking thousands of dollars each year because they’re not keeping track of their money.

Here are our top three tips for taking control of your spending:

1. TRACK your day-to-day spending by recording what you spend over a week or a fortnight using the TrackMySpend app from ASIC’s MoneySmart website. This new app is free and easy to use.

2. COMPARE money in and money out over a month. Put your income and expenses into the online budget planner at www.ADFconsumer.gov.au, or use the tear out planner in our new booklet Managing your Money, available from ASIC’s MoneySmart website.

3. PRIORITISE where you want your money to go. Identify your needs and wants, see where you can save by reducing or cutting out the things you can live without, and set some savings goals.

Once you’ve taken these simple steps, you can act to make your money work for you. Mark upcoming big bills in your calendar. Put your savings into an account that is not accessible by ATM. Check your budget once a year and adjust it if things change, for example if a family member’s income drops or you are deployed overseas and receive extra deployment allowance.

Keep in mind that tracking your spending is not all about making cuts – reward yourself with occasional treats so living on a budget doesn’t feel like a chore.

About the app
You can use the new TrackMySpend app to record your expenses on the go. It helps you set a realistic spending limit and stick to it. Your expenses are entered by category and you can view your spending history so you can easily see where you can save.

New publication
Our new free booklet called Managing Your Money has a step-by-step guide to budgeting and a tear out budget planner for those who prefer to use pen and paper. This booklet and other publications can be ordered for free on ASIC’s MoneySmart website.

Our new tools make it easy for you to stay on top of your finances.  Go to ASIC’s MoneySmart website at www.moneysmart.gov.au for more information. Send article suggestions to ADFcolumn@asic.gov.au

Bought a dud consumer product?

Bought a dud consumer product? You may be covered by a consumer guarantee. The Australian Consumer Law (ACL) provides a set of rights and remedies that apply across Australia to any consumer goods you buy, known as consumer guarantees. These rights exist separately from and in addition to any ‘warranty’ or ‘guarantee’ offered to you by the seller or manufacturer of the goods.  This article gives you a brief overview of the goods that may or may not be covered by consumer guarantees.

Which goods are covered?
As a consumer, you automatically receive certain guarantees when you buy, hire or lease goods and services.  In summary – you are covered if the goods cost:

• less than $40 000
• more than $40 000 but are normally used for personal, domestic or household purposes.

So just about anything you buy as a consumer – rather than in a business capacity will be covered by consumer guarantees.  Even if you:

• receive the goods as a gift, you have the same rights as the person who purchased them
• bought the goods on sale and did not pay full price
• bought the goods as ‘seconds’ or second-hand (however depending on factors like price and age, it may not be reasonable to expect a second-hand product to last as long or perform to the same standard as a new one).

What goods are not covered?
However, you will not be covered by consumer guarantees for goods bought:

• before 1 January 2011 (these may be covered by the laws that applied before 1 January 2011)
• from one-off sales by private sellers, such as garage sales
• in a business capacity for resale or the manufacture or repair of other goods for sale.

What about auctions? 

Traditional auctions
Goods bought at traditional auctions (where the auctioneer is an agent for the seller) will usually not be covered by the full consumer guarantees.  Only the consumer guarantees relating to title, undisturbed possession and undisclosed securities and charges apply. In layman’s terms this means that the auctioneer is only guaranteeing they have the right to sell the goods to you and that the goods are not subject to any loans.

Online auctions
If you buy goods from an online auction site, the seller (even a private individual) may need to abide by the consumer guarantees as these websites do not generally act as an agent for the person selling the goods. Also, if you take up an option to buy on an online auction site at a fixed ‘buy it now’ price, you may also be covered.

What about goods bought online or overseas?
If you buy from an Australian-based online seller, you may be covered. But if you buy from an overseas online seller, you may not be. There may of course also be practical difficulties in obtaining a remedy from an overseas-based seller even if you do have rights.

Need more information?
Here are some useful sources of information about consumer guarantees or your consumer rights more generally:

• the dedicated ACL website www.consumerlaw.gov.au
• the Australian Competition and Consumer Commission website www.accc.gov.au or Infocentre on 1300 302 502
• your local State office of fair trading (which may also be able to help you resolve a dispute with a business).