Generation X Financial Planning Tips

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Generation X Financial Planning Tips

As a member of the fabulous Generation X (born between 1964 and 1982) you’ve been through a lot.

You’re familiar with hard work and ‘getting on with life when things are tough’.

You survived the recession we had to have in the 1990’s, high unemployment rates and the global financial crisis a few years ago.

You know that life has its ups and its downs!

Now you may have a whopping big mortgage and a couple of kids at school…or your kids are nearly “off your hands”.

And even though you’re career is fulfilling you’ve noticed that you’re starting to develop an interest in your financial future when you retire.

But here’s the thing…you’re time poor so how on earth can you work out where to invest your hard earned money?

Your family’s security is top of mind so what should you do next?

 

Here’s 3 things to help you out on your road to financial freedom:

 

1 Cash flow and management of your debts

It’s a familiar story across Australia: living from pay to pay while you develop excellent juggling skills with your credit cards when big bills arrive.

One of the foundations of wealth creation is to have a healthy cash flow – where you spend less than you earn and live within your means.

From experience with our Generation X clients, we know that there’s enough money to pay the bills without having a stress melt down all the time.

Sitting down with a financial planner can help you organise and regain control over your finances.

 

Generation X Financial Planning

2 Superannuation

When was the last time you looked at your superannuation statement?

If you’re like many Australians, you open it and file it away!

And if you’ve changed jobs a few times, chances are that you’ve got multiple superannuation funds.

Having a few superannuation funds with small balances may not seem like a big deal, but with the effect of compound interest, every dollar in your superannuation fund will make a difference.

Not to mention the administration fees!

If it seems like a hassle to track them down, why not give us a call?

 

3 Investment strategies

Do you feel like you haven’t got any spare money to invest?

Many of our Generation X clients have felt like this too, but with so many options available, we can help you with a financial investment strategy that suits you.

We can help you with:

  • Saving strategies
  • Tax strategies
  • Tax planning
  • Estate planning, and
  • Government family allowances.

Our initial meeting is complimentary – so let’s chat, email us here.

The advice provided in this blog is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. For our full disclaimer, please click here.

 

Financial Planning For Generation Y

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Financial planning for Generation Y

4 money goals to aim for in your 20’s

Are you a twenty-something who gets stressed out about your personal finances?

Don’t worry – you’re not alone!

You’ve made it through your education and have landed your first ‘serious’ job. And now it’s time to learn how to manage your money.

But what should you focus on first?

Here are 4 money goals to aim for in your 20’s.

Generation Y Financial Planning

1 Look at your daily spending habits

Feel like you get paid well but you never have enough money?

It’s a common problem for Generation Y when they enter the workforce.

With rent, transport costs, clothing and entertainment, it can feel like you’re working hard for nothing.

Start by tracking how much you’re spending every day.

Include all your expenses like:

  • your breakfast smoothies on the way to work,
  • any coffees you buy,
  • travel costs like train tickets and petrol, and
  • your lunch expenses.

When our Generation Y financial planning clients do this, they’re often surprised that they’re spending nearly $50 a day on food!

Cutting back your daily spending doesn’t have to involve a switch to instant coffee or eating 2-minute noodles every day.

Instead, consider making your lunch for 3 or 4 days a week and making your breakfast smoothie at home.

 

 2 Have an emergency savings account

Unexpected expenses will happen in life!

From your car needing repairs to your cat needing an emergency operation.

And when this stuff comes up, it’s handy to have some cash reserves available.

Not sure how to accumulate around $1,000-2,000 in an account that’s only to be used in emergencies?

Start by setting up an automatic transfer from your pay account to an emergency savings account.

A $30 or $50 deduction every week will quickly accumulate to a healthy emergency savings account.

 

3 Take out insurances

Worst case scenario thinking can be a downer!

But life can get complicated really quickly if you don’t take some time to think about the ‘what if’s’:

  • what if you forgot to turn off a tap in the morning and flooded your apartment?
  • what if you got injured and couldn’t work for a few months?
  • what if you couldn’t go back to work in the same job and had to re-train?

There’s a range of insurances that we advise our Generation Y financial planning clients to consider including income insurance and life insurance.

 

4 Start investing

Have you ever heard your parents talking about how much they paid for their home – all those years ago?

Do you know how much it’s worth today?

Property may not interest you and shares may hold no appeal, but starting an investment plan in your 20’s will help you live the life you want, not live the life you can afford.

Getting financial advice now can help you sort out where to invest your hard earned money. Taking the time to get organised now, can make a huge difference to your financial health down the track.

Call our friendly, expert Financial Planners in Lilydale, Melbourne’s eastern suburbs on 1300 296 388 or email us here.

 

The advice provided in this blog is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. For our full disclaimer, please click here.

 

 

 

3 Tips For Your Financial Plan

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3 Tips For Your Financial Plan

When did you last sit down with your financial adviser to review your financial plan?

It’s tempting to just keep doing what you’ve always done, to adopt an “it’ll be alright” attitude.

But being informed and aware as to what you’ve invested in is crucial to your long-term financial health and security.

Scheduling a regular time to meet with your financial planner also gives you:

  • Insights into what issues in the current financial markets may affect you and your family, and
  • An opportunity to let your financial planner know what your current financial goals are.

Here are 3 things to consider when you review your financial plan.

1 Review your circumstances

Life can feel like it’s going along really well – but it can also change in an instant!

Illness, work place injuries and deaths in the family all have the potential to shake up life.

Your circumstances may also have changed due to:

  • an inheritance,
  • a promotion at work, or
  • a marriage break down.

Any changes in your life will change the focus of your financial plan.

Letting your financial planner know what’s happening in your life when it happens, gives them the opportunity to look out for your best interests.

waterfall1

 

2 Review your insurances

Insurances such as life insurance, income protection insurance and health insurance should also be reviewed.

Maybe you’ve started a family since you last saw your financial planner?

Letting your financial planner know this will help them advise you on what steps to put in place to protect your family.

Underinsurance is prevalent in Australia with the Lifewise /Natsem study  indicating that:

“An accident, sickness or death of a working age parent will almost always have a significant impact on the financial circumstances of the family.

Despite this, Rice Warner Actuaries calculate that over 95 per cent of families do not have adequate insurance.

In 2008, there were 6,540 deaths of married parents of working age (20 to 64 years) in Australia.

This equates to an additional 47 families with children per day having to face both a health crisis and probably financial hardship until the person recovers.”

3 Review your will

It’s been estimated that around 45% of Australians don’t have a valid will.

Victoria Legal Aid states that,

“…to make a valid will you must make the will in writing and sign the will in front of two or more witnesses.  

It is also a good idea to date it at the time of signing”  

Reviewing your will regularly ensures that any change in life circumstances like marriage or divorce don’t affect what you’d like to have happen.

Need some help with your financial plan? Our financial planners in Lilydale (Melbourne’s eastern suburbs) can be contacted on 1300 296 388 or email us here.

 

The advice provided in this blog is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. For our full disclaimer, please click here.

Christmas On A Budget

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3 Tips For Christmas On A Budget

It’s only a few weeks until Christmas.

A time of celebration – but also a time where it’s tempting to overspend!

Recent estimates show that Australians owe over $33 billion on credit card debt – that’s just over $4,000 each!

So instead of using your credit card for presents and entertainment expenses this year, here are 3 tips to help you avoid overspending and stick to your budget.

Christmas Budget Tip 1 – Plan and budget for what you can afford

It can be easy to overspend at Christmas – especially if your children give you a long list of things they ‘must have’ for Christmas.

The constant advertising pressure to buy more can be stressful. It can sometimes feel easier to give into everyone’s demands!

Writing a Christmas budget will help you feel more in control and less overwhelmed.

Start by making a list of everything you can think of that you will need to buy.

Include presents, food, decorations, drinks and even stamps for Christmas cards.

Now go through this list and add a dollar value next to each item.

For example, if you’ve got 10 people to buy presents for, write down what you’d like to spend on average for each person.

With a detailed budget like this, you will find it easier to stay on track with your spending.

Need more information on budgeting? MoneySmart has detailed information here.

 

Christmas Budget

Christmas Budget Tip 2 – Delay giving Xmas presents until after Xmas

It happens every year!

After a full day of visiting family and eating a lot of festive food, you lie on the couch in front of the TV.

Have you noticed how most of the TV ads are for the Boxing Day sales?

And there’s always ads for items that you paid full price for a few days before Christmas – now heavily discounted!

So this year, consider giving your family members an “IOU” Christmas present.

For example, if your 15-year-old daughter wants the box set of True Blood DVD’s – give her an IOU for it and buy it at the sales.

 

Christmas Budget Tip 3 – Start a family tradition of no gifts for adults

Ever opened up a Christmas present and wondered, “what were they thinking?”

People waste a lot of money, time and energy buying gifts that aren’t needed or appreciated.

So this year, consider giving gifts to children only – letting the adults know that their birthday present will be added to in value can placate them.

Which gives you less presents to buy now and more time to put some thought into their birthday presents!

Like some help planning your Christmas budget?

We’d love to help you out!

Email us here or call us on 1300 296 388 to set up an appointment.

The advice provided in this blog is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. For our full disclaimer, please click here. 

 

 

Financial Investment: 3 Things To Consider Before Jumping In

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3 Financial Investment Tips

It doesn’t matter if you’ve been working for a few years or thinking about retiring in the next 15 years or so.

Financial investment is a fact of life.

But it can feel overwhelming and even intimidating when you start exploring where to invest your hard earned money!

Before you start out on your financial investment journey, it’s important to:

  • get clear about what your financial goals are,
  • what type of investment you’d like, and
  • what risk tolerance you’ve got.

 

Financial Investment

 

1 Goal setting

When we work with our clients we suggest they write their financial goals down – from saving for a home deposit, to boosting their retirement savings.

Once the goals are written down, the next step is to give each goal a timeframe. 

If you’re Generation Y and saving for a home deposit, a regular savings plan may mean that the timeframe is short-term (up to 3 years).

If you’re Generation X and want to save money for your children’s university education, the timeframe will be medium-term (3-7 years).

And if you’re a Baby Boomer wanting to increase your retirement savings, the timeframe will be long-term (more than 7 years)

Once you’ve got timeframes written down its time to look at what types of investment choices you could make.

2 Growth, balanced, conservative and cash investment

Moneysmart defines these as:

  • Growth – invests 70-90% in shares or property. Aims for higher average returns over the long term.
  • Balanced – invests 50-70% in shares or property, and the rest in fixed interest and cash. Aims for reasonable returns, but less than growth funds to reduce risk of losses in bad years.
  • Conservative – invests 30-50% in shares and property with the majority in fixed interest and cash. Aims to reduce the risk of loss and therefore accepts a lower return over the long term.
  • Cash – invests 100% in deposits with Australian deposit-taking institutions. Aims for stable returns over a short term.

When we sit down with our clients, this information is covered in a lot more detail.

Once you’re clear on what type of investor you are, it’s time to get clear on what your risk tolerance is.

3 Risk tolerance

Risk tolerance refers to investor’s ability to cope with a drop in the value of their investments.

Everyone’s risk tolerance will be different and is influenced by their age, health and ability to recover from any capital losses they could experience.

Ask yourself, “If you woke up tomorrow and your investment balance had dropped by 30%, how would you feel?”

Moneysmart defines your overall risk tolerance as, ‘…the lesser of the risk you’re comfortable with and the risk of your timeframe will allow you to take.”

If you’d like help to get started on your financial investment journey, call us on 1300 296 388 or click here to send us an email.

The advice provided in this blog is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. For our full disclaimer, please click here. 

 

 

 

Don’t Make These Mistakes With Your SMSF

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Don’t Make These Mistakes With Your SMSF

Thinking about using your SMSF to buy property?

Go to any weekend get together in Australia and there’s probably going to be a discussion or two about property, superannuation and investment.

As the population ages, there are more people in their late 40’s to mid 50’s who are considering boosting their retirement savings by using their self managed superannuation fund (SMSF) to purchase property.

This seems like a logical move for many people, especially when they can see property values skyrocketing.

But without professional advice, this seemingly easy solution to creating extra wealth in retirement can fail.

Seven years ago the Australia’s Superannuation Industry (Supervision) Act 1993 was amended to allow SMSF funds to gear investments by using limited recourse loans.

Since then the Australian Taxation Office estimates that these loans represent less than 0.5 per cent of total SMSF assets.

But there’s been a rise in dollars being borrowed with estimates  of around A$2.7 billion in limited recourse loans early in 2014.

SMSF Tips

Before you put your retirement savings in jeopardy, here are 7 key things to consider:

  1. Always get professional advice. Make sure the advice you get includes the appropriateness of the gearing strategy to the SMSF investment strategy and trust deed.
  2. Remember that the property your SMSF purchases can’t be lived in by you, other trustees or any one related to them.
  3. Know what can go wrong. What happens if you lose your job? What happens if geared assets lose value resulting in loss of savings? 
  4. Avoid buying ‘renovator’s dreams’ – there are strict rules that must be followed.
  5. Think about getting life insurance to cover the size of the loan
  6. Make sure the investment fits in with your overall investment plans.
  7. Plan your exit strategy with your advisor including the consequences of eventually selling the investment.

Like to get some FREE advice? Contact us for a consultation on 1300 296 388 or email us here.

The advice provided in this blog is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. For our full disclaimer, please click here.