Category Archives: children

Have you heard about Child Trauma Cover?

If you’ve got kids, then one of the biggest things to concern you is their health.  Sniffles and colds are par for the course, as are bruises, bumps and scrapes.  But sometimes, life takes a much more serious turn… and I don’t just mean a broken arm!

Serious childhood illnesses can include cancers and tumours, organ failure, severe burns, traumatic head injury and blood borne illness.  Most of us know someone who’s had to nurse their little ones through leukemia or heart surgeries from quite young.

Many I speak with however, are unaware that Child Trauma cover even exists.  When I first heard about the cover, I made sure my children were signed up as soon as eligible. They have to be aged 2 to qualify.

In the event of a claim, the funds can be used to cover medical costs that may otherwise leave you well out of pocket.

A major factor in a child’s ability to pull through a major illness or injury can be the ability to spend time with parents, both preferably, through their convalescence.  So the lump sum received isn’t just about costs, it may also allow time off work as unpaid leave to allow you to just ‘be there’ for your little poeople.

But if you’re thinking the cost is prohibitive, think again.  Cover is approx. $1 for $10,000 cover, per month.  So, $100k is around $10 per month or $120 per annum and can be added to your existing personal insurances like your own Trauma cover (and only outside of superannuation.)  And, when the kids turn 18 or 21, cover can be converted to Adult Trauma cover with no underwriting.

 

 

If you’d like to investigate this cover further, don’t hesitate to give me a call or chat with your financial adviser.

Mother’s Day

Most of us wouldn’t doubt for a second the love and advice of our mothers.

From when we were very small, they’ve watched over us, with those eyes in the back of their head, and given us the wisdom of their guidance (which we may now have passed on to our own children… or view as incredibly bizarre!)

And whatever you do to celebrate Mother’s Day, we hope it’s a good one for you.  For those who’ve lost their mums or a having their first Mother’s Day without mum around, it’s going to be a tough one.  Try and remember all the wonderful times you had, the love and smiles and great moments you shared.

I came across one very special gift that i think mums of young ones everywhere would approve of:

  • Celebrate your kid’s mother this year by giving her a time machine – that is, a return to a life before diapers, sleepless nights, and the pressure to always be thinking of everything at once.

Sounds like a winning idea to me!

And whether you get breakfast in bed, a pasta necklace or something amazing, I don’t know too many mums who won’t value the greatest gift of all, your time.

Saving for the Kids’ Education

Preparing for higher education

Like most parents, you want your children to have the best education possible, yet school and university expenses and fees are undeniably costly. The money you spend on your kids’ education could be one of your family’s biggest expenses.  Depending on where you’re based, it may be right up there with your Mortgage repayments.

Not that many of us begrudge the spend, viewing it more of an investment in our children’s futures.

Some will need to decide whether 12 years of formal schooling will be undertaken in the private space or whether just the high school years will be funded.  Others are also happy to help with University costs and some allow Fee Help (formerly known as HECS) to pick up that tab.  Whatever you choose, there’s costs attached and it’s best to be prepared.

Once you’ve worked out your family’s preference, starting to save early will help your children have a high-quality learning experience.

It pays to do your homework.  Research what schools in your area charge each term so you have an understanding of what is required.  Will you need to move to be in the catchment area of your preferred school?  Do you know other parents or students of the school you can ask for testimonials about their experience there?  Do you need to register your child years in advance to get into your preferred school?  Knowing your costs early will give you greater time to save and help avoid disappointment.

The decision to send your children to public or private schools and then to university will determine just how much you need to put aside to start saving.  Despite your wishes, it’s also hard to know whether your children will want to go on to University until they’re some way into their academic career and begin to form some idea about what they’d like to do for a living.  Will a gap year needed to figured into the equation with money for travel?  Or will they fund that by working a part-time job from when they’re able.

What will you need?

As an example… if you send two children to private high school for six years each, which costs around $20,000 a year for each child, by the time they graduate you’ll have spent $240,000 on school fees. And that doesn’t take into account any extras like school uniforms, textbooks, trips and excursions, tutoring, extra-curricular activities, sporting clinics and the like.  This could see costs closer to $275,000 by the time they’re through.

If you only wish to save only for high-school years, you’ll have around 11 to 12 years to save for each child.  If the figures seem out of reach, you may need to rethink what you have to put aside, or review the schools your child will attend.

Public schools are much cheaper but there’s still no such thing as ‘free education.  There are extra fees for textbooks, uniforms, trips, stationery and school camps to pay for. These can easily add up around $1,000 per annum.

Trade Colleges are dearer than public schooling but for those looking to enter trade’s or take over dad’s business, these can be a great option for later high school years.  Often they’re around $4 – $7,000 and only two years is required.

The cost of going to university or college can also vary. If your child is eligible for HECS-HELP (a government loan available to tertiary students) they can choose to defer payment of university fees until they’re earning a living.  Entering the work force with large student loans may not be ideal, but in many cases is unavoidable.

Even if you (or they) aren’t paying upfront tuition fees, there’s still books, textbooks and materials, union and sports fees, lunches, accommodation and transport costs. Contact the university or college and find out how much each of these things will cost each semester, so you have an idea of how much money you will need to save.  And if you’re thinking ahead, don’t forget to allow for inflation too.

The earlier you start saving for your children’s education, the better. Education costs are usually a long-term goal that can take more than 5 years to achieve so stashing early is your best bet.

Then, once you’ve got a ballpark figure in mind to reach for, work out where you’ll put that money.  Are you happy with high interest, web based savings accounts and term deposits or want to invest in education funds or bonds for the longer term?  With interest rates at historical lows, it’s hard to find good returns on conservative styles of investments.

If there’s a top tip to getting set for education costs, it would be to research, plan, track and manage your savings goals on the go.  And be sure to review on at least a half yearly basis to make sure you’re on target.

Kids and Money

I think the education system needs a massive overhaul and is ripe for disruption.  No longer are we children of the British Empire training to be clerks in far flung places.  We’re a part of mass globalisation (whether we like it or not) and need the skills to be able to cope with the brave and constantly evolving new world.

No longer do we need to graduate being fluent in Algebra, all over Pythagoras’s theorem, knowing how to dissect a frog, being able to wrangle a Bunsen burner or able to recite Romeo & Juliet (Ok, maybe that.)

What we need is a mass of life skills – how to open bank accounts, understanding medicare and health insurance, learning when and how to switch off from devices and social media, defensive driving courses, how to cope with moods and emotions (our own and others,) getting job ready, learning about business and how to run a home.  You know, real world stuff.

And teaching kids about money is vitally important.  Yet often, we haven’t been taught ourselves to pass those lessons on.  Sometimes we’ve had to learn the hard way, but sometimes we wish we’d known a lot more a lot earlier.

Money permeates every part of what we do.  We work to earn money to make and living and a life.  We need it to put a roof over our head, food on the table, buy the shirt on our back, fund the phone and pay for those holidays and hobbies we want along the way.  Yet few of us know that insuring our income should be our top priority for without it, we can’t fund the rest of our lives.

We also seem to be moving ever closer to a cashless society.  Money is becoming invisible in the digital age.  (My sister tells me I’m considered a vagrant because you’re supposed to have at least 40 cents in your purse for a phone call, which I rarely do – but seeing I have a very capable mobile, I really don’t see the need!)  How much harder for children to understand the value when it’s not even a physical commodity anymore!

Fortunately, there’s also a lot of tools online now available to help.  Start talking to your children about money when you head to an ATM or you withdraw cash at the supermarket, even when writing up a shopping list.  Tell them how many hours you had to work to buy that week’s groceries and how banks and lenders give you money for big purchases but charge you extra for the privilege. Discuss online purchases and how to handle them securely and explain the difference between our needs and our wants.  Make it real and understandable in words they can comprehend and appropriate to their age.

Explain the relationship between leaving the lights on and the power bill you receive. Help them work out their first budget when they start work.  Do they need to pay board, cover debt, give to a charity, save for their first big purchase, make sure they put aside for petrol, registration and insurance?  Open lines of communication can be started with basic concepts introduced as early as preschool.

So, don’t leave it to the education system.  Be your babies first line of financial defense in the world that awaits them.

Get it Together!

There’s so many things that fall into the too hard basket!  Life is busy and there’s so many other priorities!  Just making it through each day and falling into bed at night is a good day’s work for a lot of people.

But, when a tragedy befalls someone near and dear to us, we often see the fallout when people don’t have their sh*t together.  I’m often approached for insurances or to update beneficiaries of a super fund prompted by the life events that happened to ‘someone else.’

So what are the main areas to ‘get on top of’ when it’s time to get your act together?

Here’s my top tips!

  • Make sure your Will is current and reflects your wishes
  • Ensure you have appointed Powers of Attorney – Enduring and Medical
  • Make sure beneficiaries are nominated on Superannuation & Insurance Policies
  • Consolidate those Superannuation funds that you have lying around – or keep them if they have vital insurances
  • Ensure assets are owned correctly and your bank accounts are in order
  • Check over your Insurance Policies – especially Life, TPD, Trauma and Income Protection – are the levels of cover enough?
  • Bring the people who’ll be involved in sorting out your Estate up to date with your wishes
  • Ensure tax returns are up to date and completed annually – personally and for your business entities
  • If you have a partner or family, make them aware of what you’d like to happen
  • Let a couple of different people know where your important documents are stored in the event of the unexpected

Life changes.  Partners can come and go, children grow up and live their own lives, grandchildren arrive and significant people can waltz in and out of our lives.  It may be hassle to work through the list, and yes, some of it may be costly, but if you truly love those you’re leaving behind, one of the best gifts you can leave, is to have your sh*t together.

You really don’t want the crazy ex to benefit from your estate when your gorgeous new partner will be left destitute because you didn’t take the time to update your paperwork!

So, set a date to every year, ensure everything is just how you want it.  It could be on a birthday, an anniversary or at the turn of the calendar or financial year.  Get each area finalised then run an annual check to make sure they still reflect what you’d like to happen when you’re not there to arrange it.

I’ll bet there’s a few people who’ll be very thankful you did.

 

The Truth About Cats and Dogs

Did you know that 3 in 5 households in Australia own a pet?  38% of us are dog owners, 29% have a cat, 12% fish, 12% birds and 9% some other animal like reptiles, bunnies (not for Queenslanders!) or guinea pigs.

Mostly, we love our furry friends for the companionship they give us – that undying love and having someone who actually wants to see us waiting at home every night!  Others buy to teach the kids responsibility and some to keep them fit and active.

But there’s plenty of good reasons why we don’t own pets as well!  Some don’t want the responsibility, others don’t have a home that’s suitable or aren’t allowed by their body corp.  But a very large reason comes down to cost!

Have you every had to weigh up the average cost of pet ownership to see if it’s for you, or don’t know where to start?

According to one source, the average cost of owing a dog annually is around $1,475 and a cat around $1,029.  Fish would be lucky to set us back $50, depending on how luxurious our tank is, and a bird around $115 per year.

Pet insurance is still in its infancy with only one in four dog owners having cover (costing approx. $293 p/a) and one in five cat owners taking out cover (approx. $246 p/a.)

Pet insurance isn’t always available if your furry friend is getting on in  years and some breeds are dearer than others to insure.  You’ll also need to check what’s covered as some  routine check-ups, desexing and dental may not be insured events.

Having three pets, I’d decided against pet insurance, but when my English Staffy did her patella in last year, needed medication and X-rays and then emergency desexing, the average costs went out the window!  Having said that, it certainly paid to shop around with one vet offering a service for $4,000 that another did for $1,200 – and very well thankfully!

The kids were not prepared to let their beloved dog suffer or be put down and were happy to pitch in to cover the costs.

So, if you’re counting the pennies, it’s definitely worth weighing up the costs before taking the plunge into being the resident human for your new fur love.  But if you adore your fur babies more than anything, cost is hardly likely to be a factor in your pet ownership adventures.

Sources: Pet Ownership in Australia 2016 (Animal Medicines Australia) and Pet Insurance Australia, 2015.

Get your finances baby-ready

A pre-baby financial checklist can make all the difference to new mums, writes Sally Patten.

For the majority of women, having a baby is one of life’s magical moments. It is also a moment that brings new responsibilities, including those of the financial variety.

Ideally, planning for a baby in financial terms should start a year, or even two years, before birth to ensure there is enough money tucked away to cover maternity leave and that other arrangements, such as life insurance, are in place.

Being prepared will help mothers to revel in their newborns as they should.  “If you are stressed about money, the experience is not as enjoyable as it should be,” says Kellie Payne of RI Advice Group Caloundra.

In the early planning stages, it is important to investigate how much money you can expect to receive through work entitlements and the government’s parental-leave pay scheme. Taking into account your expected income, the amount of time you plan to take off, your current expenses and any additional expenses that come with having a baby will enable you to figure out what the shortfall might be and how much you need to save ahead of time.

“Be prepared for additional medical and pharmacy costs for both you and the baby,” warns Payne.

Adele Martin of Firefly Wealth recommends opening a separate bank account for parental expenses, or better still, put the money into a separate mortgage offset account.

Check your insurance levels

In the case of health insurance, not all contracts cover pregnancy and baby-related services and if you do need to raise your level of cover, a 12-month waiting period will typically apply.

If you want to be covered by private health insurance for pregnancy “you’ll need to be on a health cover that includes pregnancy at least three months before you start trying to fall pregnant”, warns health insurer nib health funds.

Having a child is also an ideal time to look at your life insurance, which may pay a sum of money in the event of death, and income-protection policies, which may pay a regular sum of money in the event of serious illness or injury. Both can be critical when there is a baby or child who will need providing for if something happens to you.

Finding the right life insurance and income-protection policies is no mean feat and advice is recommended.

Strategies for Life Queensland financial adviser Tanaya Bendall says in terms of income-protection policies, would-be mothers should consider whether the policy will pay an agreed amount without having to show proof of income.

Martin notes that many insurance companies won’t insure pregnant women after the last trimester because they are viewed as higher risk.

A convenient way to increase insurance levels may be through superannuation, because this won’t have any impact on your cash-flow levels.

Finally, Martin believes women should not ignore superannuation during this time. She suggests investigating whether they are eligible for various super contribution allowances, such as the government co-contribution and spouse contributions while they’re not working or working part-time.

How a baby changed Emily’s financial outlook

A lot changed for Emily Shields when she had her first child, not least her financial outlook.  The embryologist knew she did not want to go back to work full-time.

“I wanted to be able to spend that time with Evie. But it also makes you think about being able to provide for her,” says the 37-year-old.  “We were lucky when we were kids that we never had to want for anything, and I want to be able to provide that for Evie.”

Shields was in a fortunate position: her partner Sam could support them. He had just started his own financial-planning company when Evie was born, and Shields was able to take a year’s maternity leave from her position at one of Melbourne’s leading IVF clinics.

She extended this leave by becoming a home-based sales rep for a health and beauty company for six months.  Now back at work two-and-a-half days a week, Shields is pleased to have resumed her career, knowing Evie is well looked after.

“All I knew was that I didn’t want her going into childcare,” says Shields. “It’s been easy knowing she’s going to family and Sam’s aunt can work around us with times and dates.”

The immediate financial plan is to continue working part-time while keeping a long-held investment property “ticking over” until they are ready to buy a house.

“We’re quite happy with a public primary school but I’d like Evie to go to a private school for high school if we have the money.”

Case study: Natasha Hughes

This article is part of a series published in the Sydney Morning Heraldand The Age called Her Money, that aims to help women take control of their financial futures. This series has been created in partnership with ANZ.