by Amanda Cassar | Aug 25, 2020 | Budget, Budgeting, Debt Management, Finances, Money, Savings, Wealth
Taking care of household finances can be taxing, especially if you have a big family. But with proper planning and budgeting, there’s no need to stress. Here’s five financial tips for large families. Learn to more effectively manage your household finances.
Here’s Five Financial Tips for Large Families
1 | Examine your finances
Sitting down as a family and figuring out how much money is coming in and going out may help you gauge the state of your family’s finances. A clear picture of your household income and expenses will set you up to manage cashflow better.
2 | Rein in spending
Keeping expenses under control can be tough in a large household. But if you’re spending as much as or more than you’re earning, you might want to consider limiting your family’s discretionary costs by buying only what you can afford. Cutting back and living frugally can help you stay on track.
3 | Set financial goals
Setting financial goals as a family may help you work towards future aspirations instead of simply meeting current expenses. Whether it’s buying a bigger house or going on a dream holiday, having a financial goal may help your family set priorities and stay on track financially.
4 | Keep a budget
Keeping track of spending may help you to better manage your family’s finances. By working with a professional financial adviser or money coach, you could create a budget that factors in not only income and expenses, but also financial obligations. Make use of the MoneySmart Budget Planner if you need somewhere to start.
5 | Build up emergency and retirement funds
Unplanned expenses such as unforeseen medical bills can put a dent in family finances. By growing your emergency fund to cover six months’ worth of expenses, you may be better positioned to handle unexpected events.
While it’s easy to neglect your own financial future when providing for your family, saving for retirement should not take second place. Keep in mind that the earlier you start saving, the better chance you have to grow a sufficient nest egg.
Working with an adviser
Managing finances for a big family need not be a painful exercise. By working alongside a financial adviser to keep track of your spending, and discussing money matters openly, you can succeed. Set financial goals as a family to make handling household finances is a task you can achieve together Make sure you implement these five financial tips for large families.
Or, contact the team at Wealth Planning Partners on 07 5593 0855 to find out if we can assist your family with their household’s financial needs.
https://youtu.be/uo7OzDLGdKc
by Amanda Cassar | Aug 17, 2020 | Advisers, Budget, Budgeting, Money, Savings, Superannuation, Wealth
Getting ahead in your 40’s?
Here’s 5 tips you need to consider to getting ahead in your 40’s..
Being in your 40s requires balancing many responsibilities and it can become easy to neglect your own financial wellbeing. However, it’s not too late to secure your future. By now you might have kids, a substantial amount of debt, career responsibilities and new and old relationships to navigate. Here are 5 tips to financially getting ahead in your 40s.
1 | Create a financial plan
If you don’t have a plan, it’s time to get one. Ensure that it’s based on your needs and priorities. By working with a professional adviser, you will be more successful to tailor a plan that helps you optimise your ability to save and invest.
2 | Grow your savings
Your 40s could be your peak earning years, so it may be a good idea to increase your savings and set aside a portion of your income into your superannuation or investment accounts. However, be sure to do your homework and consult with a professional financial adviser about your options.
3 | Give your super a “health check”
A quick super health check may help you optimise your retirement savings. For example, by choosing an alternative investment option or type of risk, you may be able to earn better returns on your super. If you have multiple funds, consolidating your accounts may help you save on fees. Again, it is wise to seek advice from a professional adviser before acting.
4 | Avoid lifestyle creep
People generally have a tendency to increase their standard of living as they earn more as they can afford more things, such as a better car or house. While it’s only natural to want the finer things in life, you’ll likely end up with little to no financial gain if your spending rises as quickly as your income. Try being disciplined and be aligned to your long-term financial goals and remember the big picture.
5 | Consider investing more
Your 40s may be a good time to invest more – or, diversify your investments – to help you grow your long-term savings. But keep in mind that it’s important to choose instruments that suit your risk appetite and time horizon. Developing a strategy with your financial adviser might make it easier to achieve the return required to reach your financial goals.
Getting ahead in your 40’s
Getting ahead on your own can be a bit daunting. Consider working with a financial adviser if you need assistance to reach our goals. These five tips can help you reach your financial goals. It’s good to start early.
Visit the MoneySmart website if you’d like to find out more about where to start.
Or, if you’d like the assistance of a financial adviser, reach out to the team at Wealth Planning Partners. We’ve helped many to achieve their financial goals. We’re Gold Coast based, but look after clients both via Zoom and in person. Contact us on 07 5593 0855 to find out more.
by Amanda Cassar | Aug 10, 2020 | Superannuation
“Early withdrawal of super” may leave youth $100k worse-off in retirement
Federal Opposition steps up attacks on coronavirus support measures. This allows people in hardship to withdrawal some super early.
Labour said the Covid-19 economic crisis will greatly affect the younger generation. It estimates someone aged 25 who withdraws $20,000 may be up to $100,000 worse off in retirement.
Early Access to Super Scheme
The opposition is stepping up attacks on government’s handling of early access to superannuation scheme. This enables those dealing with economic effects of Covid-19 to withdraw up to $10,000. And, people were able to access up to $10,000 last financial year.
Shadow assistant treasurer, Stephen Jones, states “young Australians have borne the brunt of this crisis and will be forced to continue to pay the cost in years to come”.
Australia is easing superannuation access for those worst-hit by coronavirus. But can we afford it? Read more
“After accounting for inflation and cost of living, a 25-year-old who withdraws $20,000 will be $80,000 to $100,0000 worse off in retirement. A 35-year-old who withdraws $20,000 will be around $65,000 worse off. Collectively, under 35s will be at least $51 billion worse off at retirement.” Jones.
However, the Labor party released estimates a few days after it asked the auditor general to look into failures in implementation of the scheme.
Early Super Scheme Releases to date
The superannuation early release program has currently paid out $32bn from retirement savings. This is is set to top $42 billion by December. Former PM, Paul Keating raised concerns 590,000 accounts had been withdrawn to a zero balance.
While Opposition says it supports the original intent of the scheme, it argues there has been insufficient checks. This is especially true on whether people accessing superannuation are in real hardship. Retirement savings have been exposed to fraudulent scams.
“They’re going to look back on this and think of this superannuation policy as being as dumb as the introduction of cane toads in Australia.” Jones told reporters, “this is a bad policy that has been poorly implemented.”
Fraud & Identity Theft
Allegations of identity theft involving 150 Australians prompted Government to temporarily halt withdrawals in May. Police froze $120,000, believed to have been ripped-off from retirement savings.
An interview with Guardian Australia and Assistant Minister for Superannuation, Jane Hume, said people had always been able to access their superannuation. This is especially true in times of financial distress. Hume accused Keating of being out of touch with needs of those who have early access to super.
“[It’s] extraordinary that a man in a Zegna suit on a generous parliamentary pension can sneer at the decisions made by ordinary Australians who are facing some of the most challenging economic circumstances we’ve ever seen,” Hume said.
And, Labour’s figures were based on the party’s own internal modelling.
Some calculations are broadly similar to estimates published by the Grattan Institute in the past last week. The thinktank argued much of the losses to such individuals would be offset by larger government-funded pension payments.
Long Term Outcomes
The Grattan Institute calculated a 35-year-old who took out $20,000 allowed under early release of superannuation would see total funds fall by about $80,000. Also, the institute indicated a person’s total retirement income would fall by only $24,000 in today’s dollars.
Brendan Coates, Grattan Institute’s household finances program director, said government’s priority when launching the scheme was to get money out quickly. However, he said it made sense to tighten checking of applications to ensure people were genuinely eligible.
And, Coates reaffirmed Grattan’s position the amount of compulsory superannuation paid should not increase, because of potential effects on wages.
Superannuation Contribution Increases
Hume told Guardian Australia scheduled increases in compulsory superannuation from 9.5% to 12% were already legislated. It would be “very difficult to unwind”.
Government has “no plan” to abandon superannuation guarantee increases. However, it would be “irresponsible” not to consider trade-offs between superannuation increases and wages.
Therefore, the government is considering a retirement incomes review. This was submitted to the prime minister and treasurer in late July.
If you’d like to discuss whether the withdrawal is right for you, please contact the team at Wealth Planning Partners to assess your situation.
by Amanda Cassar | Aug 3, 2020 | Australian Economy
Melbourne suffers under Stage 4 Lockdowns
Melbourne continues to suffer under lockdowns. Stage 4 lockdowns announced by Victorian Premier, Daniel Andrews, along with shutdowns of particular industries, are said to have delivered a hammer blow to the Australian economy.
Federal Treasury forecasts require Prime Minister, Scott Morrison, to inject substantial amounts of money into Victoria. This is to avoid prolonging what is already classified as an economic disaster.
Australia’s second-biggest state, by population and economic output, has been in an increased state of reinforced lockdown conditions. It has been almost a month and will now go into a state of near hibernation for at least another six weeks or more.
The Federal government may need to provide financial aid to sustain Victorian economy to mitigate flow-on effects throughout Australia.
Jobkeeper
The down-turn in economic effects will be felt across Australia. Many who believe JobKeeper and JobSeeker support can be safely reduced at the end of September, (less than 60 days away) – is a dangerous fantasy. Melbournians continue to suffer the effects of long term lockdowns.
“That will mean there are less people working less shifts,” Andrews said. “There is less contact. There is less seeding of this virus from workplaces back into families and throughout the Victorian community.”
A third group will have to temporarily, but entirely, shut down. Andrews was not able to confirm which industries will fall into which category. However, COVID has spread through some industries such as meat works. Industries hardest hit have a high count in casual employees where people work within close proximity.
Andrews repeatedly said it is a huge cause for concern that casual workers keep turning up to work when they feel unwell because they fear they will never get another shift.
Stay at Home
The Victorian government offers $300 for people to stay home between getting tested and getting their results. This is enough to cover a few of their shifts. However, it raises the question for employees “if you’re thrown off the books, what are you supposed to do after?”
The Government has also provided a $1,500 payment for people who test positive, but take-up has been poor. Forcibly shutting high-risk industries should stem infections at work, but the cost to workers will be enormous.
The hit will also be felt through the economy across Australia as spending vanishes and the goods and services they supply diminish. People are losing jobs and it’s older workers who are feeling the effects the most.
Hospitality Sector
Workers in the devastated hospitality sector, who though they could get back to work, now have no chance. Workers hit hard by this new wave of chaos will need money from the government in order to eat and pay bills.
The question is: which government? The Victorian government’s finances must be nearing their limits. On the other hand, the Commonwealth apparently has oodles of spare capacity to borrow at the lowest interest rates in history.
Reach out
If you’d like to discuss your financial situation of eligibility for government payments, please reach out to your local Gold Coast financial planning team. The Advisers at Wealth Planning Partners are available on 07 5593 0855 between 9 and 5 most days.
by Amanda Cassar | Jul 27, 2020 | Australian Economy, Economy
We’re in the midst of a global recession…
The COVID-19 pandemic led to a global recession unfolding within the space of two months, with share markets collapsing and then staging a strong recovery. Markets have performed strongly even as we remain in the midst of tumultuous recession and a worsening global pandemic. So if we’re in the midst of a global recession, just why has the sharemarket rallied?
Why has the Sharemarket rallied?
How is this possible?
Two types of data have been used to help understand the collapse and rapid rally of share markets throughout the month of June:
- Business survey data, aka Purchasing Manager Indices (PMI), are available for most economies and track expected future production.
- High frequency (daily) data produced by technology applications track day-to-day travel and purchases by the household sector.
What does the business survey data tell us?
Substantial shifts in PMI surveys have been linked to changes in expected earnings that companies are predicting. This generally drives up share market returns. We have seen share markets rally as global PMI surveys lifted firmly through June.
This rapid recovery reflects massive support governments and central banks have provided, stepping in to stimulate economies.
Assessing technology platform data
High frequency data hasn’t been around for long but given its daily and weekly nature, it is a useful way to track economies. This also provides a good ‘check’ when looking at the lift in earnings expectations from the PMI data.
Transport
Looking at transport data, where increased movement indicates that economies are ‘opening up for business’ again, the data has broadly improved in-line with the bounce in PMIs. Apple transport data for driving and public transport has recovered from the mid-March low.
However, across regions the recovery has been uneven with Europe (except for the UK) and Japan showing the strongest recovery. Driving in the US has recovered above January levels. However, in contrast to the EU and Japan, public transport remains well below peak levels.
Consumer Data
When we assess high frequency consumer data in the US, we can see that consumption has recovered from a fall of around 35% post-lockdown (to be down around 7%).
In the last week of June, possibly reflecting the recent surge in cases, the improvement in both Apple mobility and consumer data has flattened in July to be down around 9%. The data tells that overall, the sharemarket rally has been supported by a solid bounce in key leading indicators since the lockdown collapse.
The US sharemarket has seen technology (growth) stocks lead the recovery. Other markets such as the EU and Japan should now build support. China’s economy appears to continue to recover from the pandemic, supporting markets, and has now overtaken recovery in US markets. The Australian share market, still recovering, has lost some momentum with the spike in COVID cases in Victoria.
What may be ahead?
Overall, the rapid and broad-based improvement in both PMIs and high frequency data appears to be flattening out in the month of July. The indicators suggest that markets have captured the initial bounce and are now consolidating. The next catalyst is likely to be the timing and effectiveness of vaccines made broadly available. Initial news seems to be positive, but until there’s some greater clarity from the current vaccine trials, markets could track sideways or possibly weaken if the infection rates in the US continue to advance. In these challenging times it’s wise to seek professional financial advice if you’re feeling concerned about your investment strategy.
A qualified financial adviser can support you to assess your short and longer-term financial goals, which may help to provide peace of mind with regards to any concerns about the current market environment.
Give the team at Wealth Planning Partners a call on 07 5593 0855 to discuss your needs.
