Are You Money Smart, The New Government Website Will Show You How To Be:

The Australian Government has started a new website to help all Australians with their home budget. We were lucky to talk to someone from the new website about its uses. You can explore the new website: click here.

So the Money Smart website is fairly new. Could you tell us when it got started and what the feedback has been?
The MoneySmart website was launched on 15th March 2011, bringing together the best of two previous Government money sites – FIDO and Understanding Money – and a whole lot more.

Since launch we have received a huge amount of feedback which has been overwhelmingly positive.

Let’s run through what the website can provide normal Australians?
Through the MoneySmart website, we want to help people make smart choices about money.

MoneySmart is for all Australians – young or old, rich or poor, investing or paying off debt. We offer free, independent guidance so you can make the best choices for your money. We are not selling you anything. And when life puts your finances under stress, MoneySmart is here to help you ride the storm.

What parts of the website have been the most popular and has this taken you and the staff by surprise?
It's no surprise that people like the interactive parts of our site. The most popular parts of the site have been tools such as the budget planner, superannuation calculator and the retirement planner. People also really like the content on 'Managing my money' because it provides practical tips that anyone can take on board.

You talk about scams on the website. Could you give us some examples of scams running in Australia? How they work and what to look out for? Financial scams come in many different forms and can come to you via a phone call, post, or email. It may even be an offer from someone you trust.
A recent scam we have seen emerge involves the scammer claiming to be from the government offering you a compensation payment as part of the Australian Government's Carbon Tax initiative.

The scammer will ask for your bank account details to transfer the money. If you give them any details they will potentially gain access to your money and any personal details linked to your bank account. Do not give them any of your details, especially not your bank account details.
The Australian Government will never call you to ask for your bank account details or offer you carbon tax compensation.

Without giving out someone’s name, could you tell us a story of somebody who has been affected by a scam? What was the story surrounding it and how were they affected money wise?
First-time investors Maria and Jason borrowed $70,000 to invest in the overseas money market after a recommendation by their friend of 40 years, Steve. They were both shop assistants getting close to retirement and had never owned shares before as they could never afford it.

Steve told them that their investment would involve no risk at all as it was guaranteed by the Bank of America. He said they could withdraw their capital at any time after the first 12 months. The return promised on the investment was fantastic. Even after Steve's commission (40% of their return) they would still make 26% per year on their initial investment. Steve helped Maria and Jason arrange to borrow the $70,000 that they would invest.

But the scheme was not real – they were caught up in a Ponzi scheme. Part of the money they and other early investors deposited was used to pay their first dividend cheques. When the money for dividends started to dry up, Steve said that it was due to the interference of ASIC. This was one of many false stories fed to the investors by Steve, to keep them onside.

Jason and Maria were angry with ASIC as they thought the organisation was ruining their chances of making some money from their investment.

Maria and Jason hung in there with Steve through all his many excuses. They wanted to believe him as they didn't want to think they had lost all their money, and he was an old friend.

When the truth eventually came out that the scheme wasn't real, Maria and Jason, along with the other investors, assisted ASIC's investigation and prosecution of Steve and his business partner.

Maria and Jason lost their $70,000 and ended up having to pay off the loan. When Jason's mother died, his inheritance was completely swallowed up by the $70,000 debt plus interest. This money would have been put to good use in their retirement.

Jason and Maria are very wary these days. They warn others to get a second opinion from a licensed financial adviser before investing in anything.

ASIC successfully prosecuted Steve and his business partner and they spent more than 2 years in jail.

This is a true story – only the names of the investors have been changed at their request.

In your staff‘s opinion, what are the must-do things to keep your home budget in check?
Here are three things we encourage everyone to do in order to keep in control of your spending.

1. Match your budget with your bank statement. You should see the money coming into your bank account and the money going out using both your transaction account and credit card statements.
2. Create a spending diary where you record where all your money goes.
3. Check for spending leaks such as coffee, cigarettes, magazines, or vending machines. Cut out these small, regular costs and you could save hundreds or even thousands of dollars each year.

You have some tips on the website about saving for a wedding. Could you give us a rundown on your top ideas?
If you're planning a wedding try to start saving as early as possible for your big day. Open a savings account or a term deposit to earn a high interest rate on your savings. Don't be tempted to use the money for anything else.

If you can, try and pay for big items like the wedding dress or reception in instalments, and avoid using your credit card wherever possible.

The website has a monthly e-newsletter, what benefits could people get from signing up?
MoneySmart Tips is our free monthly e-newsletter. By subscribing we will keep you updated on current money matters that may affect you.

Each month we send out the latest articles from the MoneySmart team and tips to help you manage your money.

I must have counted at least 20 calculators and tools on the site. Which are the most popular and why?
The most popular tool on the MoneySmart website is the budget planner. People like the budget planner because it covers everything that you can think of in terms of money and provides you with a summary at the end.

Is there one part of the website which doesn’t get as many hits as you believe it deserves. What could people learn from this part?
There are lots of articles on the MoneySmart website. We have content on insurance that is really helpful when it comes time to renew each year as it shows you how to decide what cover you need. Next time you're renewing your car or home insurance check it out.

You recently had an article about leeches sucking your electricity. Could you tell my readers what a leech is and how it costs you money?
Leeches are those appliances that suck your electricity even when they're turned off. The problem is that they aren't really turned off - they are in standby mode.

According to www.energyrating.gov.au appliances in standby mode account for more than 10% of Australia's household electricity usage and cost us more than $950 million per year.

To find your leech appliances look for anything with a digital clock or that displays a light to show it is in standby mode.

Once you've found a leech, stop it from sucking your power by turning it off at the wall when it's not in use. Buy a power board for your computer, printer and scanner or your TV, DVD player and games console. Turn these devices off with one flick of the switch.

You have a report on how to get a free credit check each year, is this important and why?
Your credit report contains information about your credit history. The information is collected from credit providers by credit reporting agencies.

You should check your credit report every year to make sure there are no mistakes that could affect your credit rating and your ability to get credit or a loan.

Also you inform people on how to keep track of their own super. Is this a big problem in Australia and how much super is missing?
There is a lot of lost super in Australia. This is because people change jobs a lot, work casually or part-time. Super can also get 'lost' if you change your address and don't inform your super fund. It can be hard to keep track of all your super accounts.

To search for lost super go to the Tax Office's Super Seeker website.

What things have you planned for the site in the future?
We are constantly updating and refreshing the MoneySmart website. We're looking at new tools to add and we encourage anyone with suggestions about what would help them manage their money better to contact us with their ideas.

Thanks for your time.