Tips to manage your money when in a relationship

It may sound bleedingly obvious, but couples can reach their shared goals by keeping their finances healthy.

Whether saving for a house or holiday or seeking to grow or preserve wealth, couples can reach their common goals by managing money well. Here are some practical tips for managing your finances together.

Talk about it, talk about it, talk about it, yeh…

At the risk of sounding like a lyric, it’s important for couples to talk to each other about their finances and how to manage them, to avoid any potential conflict. Discuss your financial situation and goals, and any concerns you may have.  Chances are, you may have grown up with wildly different parenting styles when it comes to money, and your personal ideas about money are brought to the joint kitchen table. The American Psychological Association also suggests talking about your beliefs about money to help you better understand each other and set the stage for healthy conversations.[1]  You may hold the ideas your parents instilled, or have vastly different beliefs about money.

Set goals

Couples often have wide ranging and different priorities, but this doesn’t mean you can’t set common financial goals and work together to save for them. Keeping an open line of communication about your aspirations may help you adjust personal priorities to achieve shared goals.  Everything from big ticket household items, new cars, holidays and babies can be covered here.

Divvy up responsibilities

Sharing responsibilities for paying joint expenses and building savings may help ensure you and your partner are on the same page when it comes to finances. You can opt to split those responsibilities equally or put the main breadwinner in charge of most of them. Whatever you choose, it’s important both are happy with the decision.  Some enjoy maintaining their own personal accounts and contribute a set amount to a ‘family account’ to cover all joint expenses and debts.

Create a budget

A budget usually tracks your spending on a weekly or monthly basis, but often the very mention of the word can make eyes glaze over and you suddenly find that doing the ironing is actually more interesting. So, if a budget isn’t your thing, simply agree on how you will spend – and save – your money.

Build your funds

If you are married or in a de facto relationship, you may want to consider helping each other build retirement funds. You might explore contributing to your partner’s superannuation account if your partner is not working or earns a low income.

Before you make such an arrangement, it is wise to get professional advice on how it works. Your financial adviser may talk you through the rules of spouse contributions and the requirements to become eligible for a tax offset.

Bet we can help with some other stuff too!

 

[1] The American Psychological Association, ‘Happy couples: How to avoid money arguments’. Available at http://www.apa.org/helpcenter/money-conflict.aspx.

Here’s why you need income protection

Your ability to earn an income is usually one of your biggest assets, so why not protect it?

Income Prot

A sudden illness or injury can keep you from working and leave you in financial difficulty. You may get help from a worker’s compensation payout or personal savings, but are they enough to help you meet your expenses and financial obligations?

Taking out an income protection (IP) plan may help provide peace of mind that you’ll be able to meet your financial responsibilities and focus on recovering. IP cover may provide a monthly income while you’re unable to work as a result of illness or injury. It generally replaces up to 75 per cent of your income for a set period of time.

Standalone or through super?

Getting your IP cover through your superannuation fund may be a good idea if you want to avoid paying for your insurance out of pocket. But keep in mind that the policies offered through super may not cover all your financial obligations for an extended period of time.

A standalone IP policy may provide more adequate coverage. It may also offer you tax benefits – IP premiums are usually tax deductible when you fund your cover outside super.

Making your policy affordable

If cost is a concern in taking out a standalone plan, there are a few ways you may be able to make your premiums more affordable. One of them could be choosing a longer waiting period before you receive benefits after being unable to work due to illness or injury. Generally, the longer you wait, the lower the premiums you have to pay.

Opting for indemnity cover may also help you keep your insurance costs down. You’ll have to choose between indemnity and agreed-value cover for your IP plan. Under an indemnity policy, your insurer bases the monthly benefit you would be paid on your income at the time you make a claim. For an agreed-value policy, the benefit is based on your income when you apply for coverage. Premiums for indemnity cover are usually lower than for an agreed value policy.

But indemnity policies may vary among providers, so speak to your adviser about which cover may suit you. Your adviser may also help you tailor your plan to meet your income protection needs.

Gold! Glorious Gold!…

Recently, I was privileged to be given a tour of Gold Bullion Australia, located in Miami on the Gold Coast, of all places!  If you’re like me, then you probably think of capital cities, bank vaults and the Perth Mint as the places where it all happens in the precious metals arena.  Who knew I could try something so local?

It was pretty brilliant I must say to be able to get my hot little hands on a 1000g bar of gold and eye off the gorgeous ingots of silver and gold… sadly I didn’t get to hide any in the handbag and do a runner!

But when markets look like they may turn south and people traditionally flee to the perceived safety of gold and precious metals, I’m often asked… “How can I invest in Gold?”  (Apparently, ‘try Tiffany’s is the wrong answer!’)

You might be surprised, that there’s actually up to 4 different ways that you can invest in precious metals!

Exchange Traded Funds (ETF’s)

Precious metal Exchange Traded Funds (ETFs) are the cheapest, easiest and most convenient way to buy and sell gold.   Unlike physical gold however, there are a number of things to be aware of with ETF’s.

Firstly, you can expose yourself to counter-party risk and liquidity may be an issue, meaning you can’t sell out as quickly as you usually could. In short, when you buy an ETF, the metal you buy may not be held by the ETF provider, it’s held by a large global bank.  Just a possibility to be aware of!

Junior Miners

As gold production is primary, there are a selection of mining companies that explore and extract the glittering, precious metal from Mother Earth’s crust.  By investing in these “Junior Miners” you are investing in gold indirectly.  The price of shares in these companies will be affected by the mining stocks as well as many other factors such as the position of the mining company and markets in general.

Futures and options

Futures and options are vehicles known as derivatives which are available to investors via platforms or exchanges.  A futures position can become a physical position in precious metals and they have a delivery mechanism for buyers and sellers.  Options are like an insurance policy on price.  Most use the recommendations of a reputable Stockbroker and/or their Adviser when looking at these style of investments.

Buying Physical Gold

There are many seasoned investors who have been long term loyal fans of physical gold; the real stuff!  I’m kind of a fan of wearing it myself! (All donations graciously accepted!)  They like to be able to hold a tangible asset with no third-party risk which has been a valuable form of currency for over 5,000 years.  And getting your hot little hands on a 1kg bar is seriously a lot of fun – but may make some of the scenes in the Italian Job look a little less real than previously thought…

To Note ~

Gold does not replace income – that is the role of cash and fixed interest or even real estate – what it does do, is provide a non-correlating alternative to traditionally defensive assets.  Unlike property, cash, stocks and bonds, gold is not sensitive to Macroeconomic factors such as inflation and interest rates – in fact, it usually performs better in a volatile market.

Physical gold can be more expensive than investing in an ETF, although since it is an internationally recognised and trusted form of exchange, the worldwide network of dealers can provide prices 24 hours a day and you can exchange gold for cash practically anywhere in the world.

What are the costs?

Dealers charge a premium on the world spot price of gold; there is a production cost depending on the type of product you purchase and there may also be delivery, storage and insurance costs.

If you can buy from a dealer closer to your location, you will also save on the cost of shipping.  For precious metals, this cost can be significant due to their weight and value.  (Wandering out of the vault with a backpack of gold bars isn’t great for the back!)

When it comes time to sell, the dealer will buy back at spot price less a premium.  The dealer will want to see the physical product, so again it is best if your dealer is close by.  Alternatively, you can store your precious metals with the dealer so you can buy and sell instantly with them.  Buying bullion isn’t risk free, but then, there’s not much in life that truly is.  Researching a reputable trader is imperative.

Have a chat to your financial adviser to see whether physical gold, silver, platinum or other investment options are worth a position in your portfolio.

And for those who want to know a little more, here’s an e-book put together by Gold Bullion Australia for your viewing pleasure called “Why Buy Gold.”

Exotic India Tripping!

Well, you may know from former blogs, that my trips to Malawi and Uganda with The Business Chicks Leadership & Immersion Program in partnership with The Hunger Project in the past few years have changed me in so many ways.

I’ve learned incredible lessons in resilience, leadership and mindset from possibly, not one of the first places I’d  look.  Yet, seeing the amazing work of providing a hand-up, rather than a hand-out has been inspirational.  I’ve learned new perspectives and totally not to sweat the small stuff.

I’ve loved it so much, that I’ve signed up for Round 3 and will be heading to India with THP in February, 2019 with an amazing and new bunch of ladies.  We all need to raise a minimum of $10,000 each and my latest journey is just beginning.

Having seen firsthand the impact that just small amounts can make, and knowing that over 81% of the funds provided to directly to where they’re needed, rather than funding the CEO’s learjet, I’m reaching out for your support.

If you can please assist in my journey, I’d be amazingly grateful, as I know are those in receipt of the education, literacy classes and micro-finances loans supported by THP.  Please donate here!

India is also ‘in my blood’ so to speak with my grandparents meeting there and my father and uncles all being born there.  A few of us are looking to extend for a couple of days to see Delhi and the Taj Mahal before heading home and I can’t wait to share my adventures of empowerment and success over adversity with you all.

Stay tuned for more!

Ze Bank in Ze Wall

Many years ago, a gorgeous friend of mine, Dutch back ground, owed me $20.  I wasn’t terribly worried about it, but she really wanted to pay me back this particular day.  So, she suggested that we head to ‘ze bank in ze wall’ to get my cash out.

I think I looked at her blankly for a moment before realising she meant an ATM and I loved it, and the name stuck… for my family anyway!

Tho these days, we don’t even need ‘ze bank in ze wall’ terribly often.  A few dollars out  to cover the rare occasions that I need cash is accomplished during a grocery shop.  According to some futurists, the ATM’s days are numbered… but others disagree.  So will it survive? or thrive?

And how the use of cold hard cash has changed over the years!  In the early 90’s I assisted in a payroll office for a large Gold Coast cafe and remember stuffing envelopes with the exact amount of cash required in each staff member’s particular packet.  Things then progressed to electronic transfers directly into our accounts, and then we had to withdraw what we needed to cover ourselves each week – especially for those using the ‘envelope system.’  Seems like a hassle now!

Today, it’s rare that I carry cash.  My sister tells me I’m classified as a vagrant as I don’t often have 40c for a phone call (do they still cost that?) but who needs 40c when I’ve got a mobile?  And seriously, if I can’t tap and go, you’re unlikely to get a coffee order from me.

So, our children have grown up as the Invisible Money Generation or Gen Z (born post 1995) or even Gen Alpha (the wee bairns.)  Well, my 2 have anyway… and what does the change mean for them?

We’ve understood the value of money all our lives.  We’ve seen it, touched it, saved it and spent it – the real stuff, that is.  But things can be a different story for those who’ve never understood the real value of cash and used the real McCoy.  Although the young these days are ‘digital natives’ many parents are too stressed to talk to them about money as they’re battling financial issues themselves.  And chances are, their parents never spoke to them about money either.

I remember a friend often being told by her son, ‘just put it on Visa, mum’ and I’m sure he had no concept that mum needed to repay Visa, with interest.

If you’d love to know more about the Invisible Money Gen, how to talk to kids about money, pocket money, work, find out your money personality and so much more, please feel free to download your copy of the FPA’s Share the Dream Report here.

You’re welcome!

Retirement Goals!

For some, retirement is a long way off!  For others, it seems to be creeping up a lot more quickly than expected.  The years have flown by and it’s time to start taking stock.

Many who visit me in their late 40’s to mid 50’s sometimes realise that they’ve put retirement on the back burner for a little too long.  With taking care of the Mortgage and the kids… retirement saving was a long way down the list!

But for those ready to hang up the boots, whether at 65, 70 or beyond… what can you expect?

Many advise that a new kind of balance is required, one that takes a bit more planning than expected.

It’s good to start thinking about your vision for your retired life and the values you have that may drive those goals.  Have you been planning travel? volunteering? hanging out with the grand kids? visiting more with elderly parents? taking up a hobby?

Strange tho it may seem, retirement and pure leisure hours only, can impact your health.  Everything you’ve ever known has suddenly stopped.  Routine, income and your network is no more which can have a big impact on mental health especially.  Choosing to be optimistic about your future options is incredibly important.

Family relationships can also come under scrutiny.  Suddenly spending 24/7 with your life partner may not be what either of you expect.  Learning how to communicate what both of you need, while maintaining some sense of independence is vital!

Are you looking to replace the hours you spent working with something else?  Some enjoy volunteering, others enjoy researching the family history or writing that book that you always put off, even learning a new skill or going back to school can be considered.  Travel plans also need consideration – those who’ve traveled extensively during their work life may not wish to venture so far from home, others can’t wait to become intrepid explorers!

Often, what to do with the family home also needs consideration.  Some empty-nesters love keeping their family home and it’s memories, others like to move on and downsize for less maintenance and possibly availing themselves of additional funds.  Moving interstate to be near the family or a group of friends also needs consideration but taking on too many things at once can be a little overwhelming… it’s good to learn to pace yourself.

Managing the finances also requires careful consideration.  Some find that their immediate spend in the first few years following retirement is much higher than they’d previously thought it might be.  Funding travel or new gadgets may be fun, but if they haven’t been budgeted for, can impact the long term value of savings.  Longevity risk is gaining a lot of exposure now, with many living well into their 90’s and hoping they don’t outlive their savings.

Who knew that ‘hanging up the boots’ could be so complicated?

It’s a great idea to sit down with your adviser and talk through your options.  What works for one, won’t work for all, so setting and achieving what’s important to you is vital.

5 ways to keep business debt under control

Managing business debt can help you steer clear of financial trouble!

Piling up a lot of debt could leave your business in financial difficulty or, worse, bankrupt. Here’s five ways that may help you manage debt and avoid a financial mess.

1. Understand your business situation

It’s important to keep track of debt and money owed to you by having a record of your creditors and debtors and amounts involved. If tracking your business finances requires more than a simple spreadsheet, you may want to consider a bookkeeping system to make monitoring more efficient.

2. Prioritise debt payments

Once you have a good understanding of where your business stands financially, prioritise your debts.  Identify which debts you must repay now and which ones you can put off or put onto a payment plan. When prioritising, consider the urgency of the debt or the importance of the creditors to your business.

3. Negotiate with creditors

It may help to speak to creditors openly and honestly about your business situation. Ask if there are any hardship provisions or if you can have your due date extended. Talking to your creditors as early as possible can save you from paying more penalties and other charges. It may also be a good chance to negotiate for better terms and rates on your business loans.

4. Collect outstanding payments

You may want to collect payments from your own debtors to help improve business cash flow. If you have a long list of debtors, prioritise them by going after the biggest accounts first.

5. Protect what’s important

There are steps you can take to help protect your business from risks that can affect its ability to continue operating. Taking out a business insurance policy, for example, may help you by replacing lost income or maintaining cash flow.

A financial adviser may be able to help you determine if business insurance might work for you. I’m happy to chat further about any protection questions you may have.

A little bit of life… according to Amanda