by Amanda Cassar | Oct 26, 2020 | Australian Economy, Economy, Finances, Financial Stress, Money, Wealth
How do you save for a house after being hit by the fallout from COVID? Have you been struggling financially with the COVID-19 pandemic? Has the global pandemic affected your income? How’s you financial stress level, not only in your household, but your overall mental health? If so, how can you get back on track after being hit by CoVid?
The markets took a major hit but now it is starting to stabilise as restrictions loosen. It’s never been better timing to look at your financial position.
When is a good time to start saving for a house?
You might say… “But I’m late bloomer when it comes to finances?”
To everyone who is asking the same question, know that you’re not alone. How can you save for a house? We’ve had clients in their 30’s who’s been focusing on saving for home and to be honest, it’s been rough. We’ve heard stories of journey’s full of pitfalls, late-night tears and anxiety. Lamenting and wishing they’d saved more in earlier years.
Despite tumultuous changes in the market, it’s important to find balance. There’s been remarkable shifts not only how people view their personal finances but also how they view money. Have you heard of the ‘money mindset?’
This article isn’t written to make you feel bad about being a late bloomer. It happens, but this time in history is proving to be tricky to navigate when it comes to financial independence and security. Many have utilised this period of time to review their goals. Here’s some lessons learned when finding their feet and getting those house keys. It’s time to fight back after being hit by COVID.
What not to do!
DO NOT put investments on a credit card. In fact, if you can, avoid a credit card altogether, do it.
The idea of a credit card to spend on the things we can’t afford can be tempting. Making sure you understand the risks before you get a card is vital. But what happens when you’re trapped into paying one off? It makes sense that if what you earn goes onto paying off these high-interest rates you will sink deeper into debt regardless. The best thing to do is assess what you have and then see if you can afford paying this debt off even if you did have a home loan. If your priority is saving for a house, then the other items will seem less appealing.
What to do?
Pay off your debt slowly – even if it’s over time. JUST MAKE SURE IT GETS PAID!
Student loans, credit card debts, car loans seem pretty good at the time we borrow the money. But remember that after some time, they actually gain interest. Paying off debt before you buy a house is a little tricky, but not entirely impossible. Implementing automatic direct debit payments will help you pay it on time, every time. And you’ll avoid late fees. Paying off over time is fine, but making sure you do this as quickly as possible is priority! Ask if saving for a house if your biggest priority.
Learn Patience…
Everyone wants everything now but goals take time… be patient!
Our generation struggles with patience. They want everything right now, from iPhones to houses. We decide to risk all of it for what we want. Stop and think,” have I the income to support everything that is coming out of our bank account?” Asking yourself the question of not only “can I afford it” but “can I save 10% on top of” will allow you to stop and think before you buy and invest in something new. Ensuring you have clear goals for your financial plan will put your mind at ease. Taking these measures can assure ways to increase your finances and where to invest. Take time to contribute and invest in your superannuation fund and don’t spend so easily when you have the money available.
If you are going to buy a house, know all of the pros and cons.
Home loans and investment properties can be frustrating at first glance. You need to know how much you have saved for the portion of your investment as well as the 10-20% saved before you make the purchase. Savings, purchase costs and home loans can be a balancing act and it pays to speak to someone who understands not only the market but how much financially you may need to reach your goal.
Seek the advice of a qualified Financial Advisor
Finding a financial planner to work with is important. They not only help you with your financial mindset but also look at your roadmap of how, what, when, where and why on all areas of investment. And even right up to retirement. Understanding the broader picture will help to move forward and succeed with your specific goals.
Everyone has different journey’s and pathways to travel. But, if you can invest in the bigger things earlier whilst increasing your savings you will be better off further down the track. Is it time you started saving for house now?
So, if you are a ‘late bloomer’ it’s ok, we can help you plan for your future with a view to getting you where you need to be. To meet with your Gold Coast financial planners, Amanda Cassar and Mitch Cassar, reach out. To schedule an online appointment, click here.
by Amanda Cassar | Oct 22, 2020 | Finances, Money, Savings, Wealth
Are you teaching your kids how to manage their money? Teaching our children about money is vital. Do you know how to teach your kids to manage money?
When interviewing for her book “Financial Secrets Revealed,” Amanda Cassar found most of us haven’t been taught how to manage money by their parents. Are you self taught? And what do you intend to teach your kids about managing money? It’s a question worthy of thought.
Times have changed
So, with technology come change. Can you think of the last time your children purchased something using cash? Or saw you use cash? Apple, GooglePay and pay later schemes have given us multiple options to choose from. It has made handing over cash a thing of the past.
With contactless payments becoming increasingly popular, many parents are struggling to help children understand the real value of money.
How do you teach your kids to manage money?
So, start by setting an example and putting thoughtful consideration on what you do and say about money in your home. Amanda explains “our children are sponges, so we need to be careful about how we speak. Be mindful of the messages they receive about money”. Are you teaching your children to manage money? And manage it well.
And, how your children perceive managing money all depends on how and how often you talk about money. Do you give the perception that managing money is difficult? Do you make it private or secretive; easy or burdensome, or associated with negative emotion? Most people have heard the expressions “Money doesn’t grow on trees, it takes money to make money.” As parents are we building a scarcity mindset or one of abundance? Our choices and words matter.
Because, being transparent about finances can help turn negativity into less daunting subject. And, be sure to show how it can be successfully managed and have value.
Emotions and money
And, you can help your kids understand the emotion around money. Explain the psychological aspect of why they want to spend. Explain hurdles and obstacles they will face in life. Start with something as easy like getting caught up in FOMO (fear of missing out.) Understand the urge to spend to keep up with their friends. Keeping up with the latest trends or what everyone is buying to maintain their image is a trap. Ask for their perspective.
And know, these pressures can be really hard control emotionally. But, it’s important our children are given the tools to understand why they want to purchase something. And whether the item or memory will hold value for them.
And finally, teach your children to make smart, practical choices with how they spend their money. Show them how to implement a thought process when making purchases. Teach them to stop, pause and think about why they want to purchase an item. Ask the question “Is it worth exchanging this money for this item? Or should I save it and use it for something else?”
Learning to make conscious choices is a really important tool to help children value money, especially if they can’t count it in their hands like cash.
So, for more ideas or assistance, reach out to your Robina financial advisers, Amanda Cassar and Mitchell Cassar at Wealth Planning Partners on the Gold Coast.
by Amanda Cassar | Oct 12, 2020 | Finances, General, Insurance & Protection, Money
Get ready for storm season!
The Queensland Government want everyone to Get Ready for disaster season. Use the 3 Step “Get Ready” Plan.
Prepare your household this storm season by completing these 3 simple steps:
- Have a plan Firstly, ensure your family is equipped with an emergency and evacuation plan. Make sure everyone knows what to do in a disaster. Team-up with your neighbours for added assistance if required. The Queensland government have put together a Household Emergency and Evacuation Plan form.
- Pack Supplies Secondly, have an emergency kit ready to go. A stocked “Go Bag” will ensure you are ready for storm season. This provides easy access to essential items that will equip your household for at least 3 days of isolation. Your kit should be in a sturdy waterproof
storage container. Make sure it is stored in a safe, easily accessible place within your home. And, ensure it is childproof if necessary. Be sure to let everyone know the kit’s location and document it in your emergency plan.
Please click here for a list of what to include.
- Make sure you’re covered Finally, the importance of having home and contents insurance cover is paramount. Many have found out too late that they did not have adequate insurance cover. Queensland has been impacted by over 70 significant natural disasters since 2011!
And, Step 3 is to make sure your insurance is enough to cover the costs of rebuilding your home and or replacing your possessions. For instance, both home owners and renters should check policies to ensure they are fully aware of what is covered.
What to ask your Insurer…
So, in conclusion, some questions to ask your insurance provider are:
- What disasters does the policy cover?
- How do they define each disaster?
- How much will the policy cover?
- Does the policy provide enough insurance to cover the cost of rebuilding your house and any extra costs you might incur?
- Is your insurance adequate to cover the replacement of your possessions?
- Are your possessions covered for damage caused by potential local hazards, such as storm, cyclone, flood and bushfire?
- In what circumstances will the insurer reject the claim?
- Are you covered for the cost of temporary accommodation if your home is uninhabitable?
- Does pre-existing damage caused by a previous natural disaster or lack of home maintenance impact eligibility of insurance claim payouts?
For how to Get Ready for Storm Season, visit the Qld Government website.
As a result, you’ll be ready to go in the event of any disasters. Or get in touch with the Team at Wealth Planning Partners, your Gold Coast Advisers to find out more. And ask, what do you need to do to Get Ready for Storm Season? Don’t leave it too late.
by Amanda Cassar | Oct 7, 2020 | Australian Economy, Budget
Federal Budget Update 2020 is out. See how this may affect your family.
Proposals
The Federal Budget Update 2020 is out, and is all about jobs, and spending to make more jobs. We already have JobSeeker and JobKeeper, and now we have JobMaker and JobTrainer.
The announcements in this update are proposals unless stated otherwise. These proposals need to successfully pass through Parliament before becoming law and may be subject to change during this process.
Announcements…
Each announcement the Treasurer made was translated into jobs. Tax cuts for 11 million taxpayers equals 50,000 new jobs; expanding the instant asset write-off and the carry back of current losses is another 50,000 jobs. Bringing forward the Stage 2 personal income tax cuts were the order of the day, and there will be no increases in tax in order to pay for spending. So unlike other economic downturns, there will be no deficits tax on high income earners.
One key theme throughout the Budget, is that the Government is keen to improve outcomes for young people. We know this recession has hit young people hard and many have taken early release of their super.
For more information about how the Budget may affect your family, click here.
Or contact your Gold Coast advisers at Wealth Planning Partners to see if you’re impacted. Call your Financial Planners at Robina on 07 5593 0855 to discuss further.
by Amanda Cassar | Sep 28, 2020 | Advisers, Australian Economy, Budget, Budgeting, Finances, General, Retirement, Superannuation
Are you affected by the increase in the Age Pension’s qualifying age? Take steps now to avoid getting caught short on retirement income.
The minimum age to qualify for the Age Pension has started going up. For those born on or after 1 July 1952, the qualifying age increases by six months every two years until it reaches 67 in July 2023. It rises to 66 in July this year.
So, if you’re turning 45 this year and plan to retire when you reach 60, you will need to wait until 67 before you can apply for the Age Pension. You’ll have to rely on your own savings and super. This makes it crucial to ensure you have enough money put away. But, the good news is that there’s still time to grow your retirement savings. So just how do you take control of your retirement savings?
Boost your super
Contributing more to your super can be a reliable route to bolstering your retirement fund. By making extra contributions through salary sacrifice, you can grow your super and at the same time reduce the amount of income tax you pay. The government will tax salary sacrificed contributions at 15 per cent. This could be much lower than your personal marginal tax rate.
Making non-concessional or after-tax contributions is another option. You can contribute up to $100,000 each financial year if your total superannuation balance is less than $1.6 million. To understand how these contributions work, it’s wise to get professional advice.
Jump onto the MoneySmart Superannuation Calculator to see how much you could have in retirement.
Beef up your savings
Your personal savings can supplement your super payments in retirement. But are they growing enough now to provide you with some income when you retire?
To build up your savings, you may have to invest part of it and make sure it’s growing faster than the rate of inflation. Investing in a managed fund or buying an investment bond may help you increase your nest egg. Seek professional advice to see if these instruments are appropriate for you.
Know your entitlements
Besides the Age Pension, you may be eligible for other government benefits and concessions. The Seniors Card, offers individuals over 60 discounts on some commercial and public services. Concessions that allow you to buy prescription medicine at a discount are also available.
But keep in mind that these benefits have strict eligibility rules. There’s also no guarantee that these entitlements will still be available by the time you retire. So take charge of your retirement today. By working with your financial adviser, you can develop a strategy that helps ensure you’ll be well provided for regardless of changes to pension policies.
If you’d like more information on how to take control of your retirement savings, reach out to the Team at Wealth Planning Partners.
