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by Jodie | Sep 29, 2014 | Advisers, Debt Management, Finances, Insurance & Protection, Superannuation
A recent chat with a friend soon turned into a request for a review of his financial situation, as I had a bit of time over the weekend we ended up having this very important discussion.
The lack of proper financial advice soon became very evident when looking at his situation. The family home still has a substantial mortgage; and he and his wife also own an investment property, which is being serviced with an interest only loan.
The husband is 54 years old, and is the main income earner who works in a very physically demanding job.
When the simple question was put to him that should he be injured and could no longer work or worse still, suddenly pass away, in what financial situation would his wife and daughter find themselves in?
His answer staggered me, he said: “Well, my wife could go back to work and my daughter is at uni, so she still has many years ahead of her to earn an income, my family will be fine and besides, I have $120,000 in my six superannuation funds which will be more than enough for them.”
Wow,! His 52 year old wife would have to go back to work, sell the investment property which would not generate any profit at current market conditions, his super payout would not cover the amount owing on the family home and his daughter would be left without any financial legacy from her father. Besides this worrying situation, if he was injured and could not work for any length of time, this family would be in dire straits.
Unfortunately this individual has set himself and his family up for failure in the event of the unexpected. What a sad legacy to leave his family.
I explained that this situation had an easy fix and provided him with a few strategies to think about, and showed him how inexpensive it would be. One of these was rolling his super into one preferred fund and saving hundreds, if not thousands of dollars a year in fees. As an option, death cover could be funded through the super, incurring no ‘out of pocket’ expense to the family but enabling them to be debt free in the event of his premature demise.
Having left this information with my friend for a week or two, I contacted him to see if he had given his situation any further thought and if he wanted to implement any of the strategies we spoke about. Once again his answer was very disappointing, although he thought doing the super consolidation was a good idea, he still didn’t think that he needed any other insurance.
It is not amazing that most people are willing and do provide for their families when they are alive, this is who we are as humans and it is what we do. It is the nature of things. What is truly staggering though is that so many people still fail to provide for their families once they have passed away.
In the end, the choice is always ours, we can ensure our families are well cared for financially once we are gone, or we can fail them, leaving them at a time of sadness and distress with a financial burden that could so easily have been avoided.
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by Jodie | Sep 4, 2014 | Debt Management, Finances, Money
Unfortunately, financial literacy still isn’t a staple part of our education system, and until that time comes, people will continue to struggle with Credit.
Want to finally understand how credit can work for you?
If you can actually afford to borrow?
Want to know how to find out if the people you’re dealing with are reputable?
What options do you have if things go bad and you can’t pay your debts?
Where can you turn to complain?
Download the MoneySmart brochure here and start investing in your financial literacy. Learn tips on credit cards, car loans, rent to buy schemes and mortgages.
Isn’t it time you took the challenge today to get a handle on your finances?
Download here: http://ja3g3rz5bt9fph259ux610b4.wpengine.netdna-cdn.com/wp-content/uploads/sites/13/2014/07/Credit-Loans-and-Debt.pdf
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by Jodie | Sep 1, 2014 | Budget, Budgeting, Debt Management, Finances, Insurance & Protection, Money, Women
What’s your biggest financial challenge?
We all have an area of our finances that we know could do with some attention but
let’s face it – most of us would rather think about something else. The problem is
that by doing that, we’re costing ourselves money – and more than likely causing
ourselves unnecessary stress.
For instance, if you have several superannuation accounts, you are probably paying
account and management fees across all of them, rather than having that money
working for you and building your retirement savings.
Similarly, if you have a credit card debt of $3,000 and you only make the minimum
repayments, this could cost you up to $6,000 in interest charges alone.
None of us like to cost ourselves money but the task of fixing the situation can seem
like too much hassle: “Where do I start? Who do I ask? Am I making a mistake?”
These are the questions we ask ourselves and without easy answers, we often opt to
do nothing.
MoneySmart Week understands these are common challenges and aims to do
something about them. Running from 1 – 7 September, MoneySmart Week is an
independent, not-for-profit initiative designed to raise awareness of the importance of
financial literacy and to encourage all Australians to take action on their finances. The
initiative was founded in 2012 by members of the Australian Government’s Financial
Literacy Board, led by Paul Clitheroe AM.
This year, they’re running the MoneySmart Week Challenge.
The MoneySmart Week Challenge asks people to pick one financial challenge to
address and provides a free, step-by-step guide to completing the challenge with a
range of great resources that can help answer any questions you have along the way.
People can sign-up online and pick from the following Challenges:
• Ditch Your Debt – credit and debt
• Sort Your Super – superannuation
• Manage Your Money – budgeting
• Protect What’s Precious – insurances
• Build Your Worth – saving and investing
• Plan Ahead – estate planning
• Female Financial Fitness
There’s even a savings Challenge for secondary school-aged students: Start Early.
The best way to deal with money stress is to become financially resilient and we all
know that resilience is built from facing up to our challenges. By taking simple steps
to improve your money health, you will save yourself money and build your resilience.
Take the first step today by signing up for the MoneySmart Week Challenge at www.
moneysmartweek.org.au 
