What! No Credit Card?

Banking is something we all have to do and I recommend to keep it simple. I have stopped writing cheques for over a year, now I pay everything by bank transfer. I suggest you try to avoid the complexity of multiple banks and lots of accounts. I am happy to have all my eggs in one (bank) basket, but I appreciate some of my readers may not agree, but read on…..

Best of all, I haven’t had to pay bank fees for years. That’s because I use a bank which started its life as a Co-op specifically for teachers (I’m not a teacher). Over time, it developed into a fully-fledged bank now called ‘Bankfirst’ which has very few fees, and none that apply to me (so far)! Another reason is that I have a ‘Debit’ card which attracts no fees, rather than a ‘Credit’ card which certainly would! The Debit card is attached to my ‘Working’ account and I always need to be mindful that it has enough credit balance to cover whatever bills I pay from it. But I never have to remember to pay off a credit card debt on time! My Debit card draws directly from my own money in that ‘working’ account. All I need to do is maintain a sufficient balance to ensure it doesn’t become overdrawn.

I manage that, online, at any hour on any day by instantly transferring between that working account and my only other account I call my ‘Reserve’ (or main) account, which is where I accumulate money I don’t spend!

So, with just two accounts I can monitor my finances at any time on my computer. It also means I am never in debt to the bank and, importantly, if I lose my Debit card no one can ever use it to access my Reserve account.  Centrelink payments go into the working (card) account which I use to pay for my food shopping and other needs, and I move the leftover (if any!) into my Reserve account. Then I can transfer it back to the smaller ‘Working/Card account to draw on if, and as, needs arise.

It’s so easy to manage these two accounts online: I can check balances, transfer money, pay bills using Bpay or by direct transfer, etc., around the clock. You don’t need any special computer skills but naturally we should all change passwords from time to time and be careful to never divulge bank security information to anyone in emails, or any other way, online! I have also authorised some regular bills, like Insurances, Rates and Subscriptions to be auto-deducted after a confirmatory email to me before it happens. That gives me a chance to review the correctness of the bill and ensure there’s enough money in the working bank account.

In earlier times we also had a couple of Term Deposits but we don’t have that luxury now because the money was used as part of Dorothy’s care home RAD (Refundable Accommodation Deposit). 

Now here’s an important bit:.…..Previously, Dorothy and I had joint accounts, all our money was pooled, with either to sign. Since she is now in care and legally cannot sign, we changed that so we each have our own accounts, with me as the signatory to both. That means that Dorothy’s finances are quite separate to mine, with her pension going in, and her care fees coming out. That has removed the banking/access complexities that might have arisen on the death of either of us. Makes it easy for me to monitor and manage and, since the pension doesn’t cover all her care needs, I can easily transfer money across from my account as needed.

To ensure total flexibility and cover contingencies, we also arranged for our daughter, who lives nearby, to have full signatory access to all those three bank accounts (my two and Dorothy’s one), at any time. That gives us all great peace of mind.

As I get older, I have to admit, it’s not as easy to keep my finger on the pulse of our finances and now, more than ever, everything we do is based on affordability. I am lucky that in earlier times I setup our retirement finances so that our Centrelink pension is augmented by my personal superannuation fund income of about $18,000/yr and Dorothy gets an annuity of about $4,000/yr. So, compared to many who have only a Centrelink pension, we are financially well off, albeit our ‘nest egg’ ($350K) RAD is being eroded by more than $1,000/month, as interest charged for our $200K RAD shortfall!

There will come a time, sooner rather than later, where I too will probably need to move to a care home and/or can’t afford to stay where I am………and that will be a whole new ball game.

You can bank on that!