Category Archives: General

Just stuff

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.

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.

Educate yourself on financial advice

You might be surprised to know, that working out how to achieve your financial goals is easy and you don’t have to earn a high income to do it.

Whether you’re looking to get your financial affairs in order, buy a first or subsequent home, start a family or prepare for your retirement, seeking quality advice from a qualified financial expert can help you achieve your goals sooner, and with more confidence.

So just what is financial advice?

Financial advice is about much more than just making money. It’s about creating new opportunities to help you achieve whatever you desire in life. A financial planner can help work out what’s important to you. They can help develop a plan that aligns your financial decisions to your lifestyle goals.

Priorities can change over time, as can economic conditions, government legislation and investment markets. Advisers can help re-focus your plan, track your progress and keep you accountable along the way, whether you’re starting out, building wealth or planning for retirement.

Seeking financial advice will help you identify solutions to important questions like:

  • Will I have enough income to live comfortably in retirement?
  • Is my family protected should something unexpected happen – what do I need to know about life insurance?
  • How can I make sure I have enough money to fund my children’s education?
  • How can I invest and structure my finances in the most tax effective way?
  • How can I manage my debt and pay off my home sooner?
  • How can I make my money work harder for me?
  • What’s the best structure to protect my investments and assets?
  • How can I maximise my entitlements to government benefits?
  • How does estate planning fit?

At its best, financial advice is an ongoing long-term partnership centered entirely on your goals.

If you’re weighing up whether financial advice is right for you, consider booking an initial complimentary obligation free appointment.  We’d be happy to help!

Are you a Key Person?

Key-person insurance is Protection for your business

How would your organisation cope if something happened to a key person?

Unexpected events can play havoc not only with people’s lives but also with businesses.

However, business owners are often so busy they don’t stop to consider the true cost of the loss of a key employee, business partner or even themselves.  Eeeek!

The knock-on effects may include disruption to other staff, missed opportunities, delays or penalties for late delivery of projects, lost revenue, increased expenses, significant costs to find and train a suitable replacement, loan repayment and even loss of the business.  Ouch!

What is key-person insurance?

Key-person insurance protects a business’s financial position against the significant impact of a traumatic event such as the death or disablement of a key person.

A key person may be an employee, owner or an individual whose contribution to the business is significant.

This cover is not a specific kind of insurance but the application of life insurance to protect against key-person risk. It can be used with buy/sell life insurance (also known as business succession insurance) which covers the change of ownership if an owner dies or becomes incapacitated.

The benefits

Often a cash injection to an affected business may keep a bad situation from becoming worse or even catastrophic. The insurance proceeds may be used to:

  • minimise or eliminate the potential loss of revenue, sales or profits
  • help cover the often significant costs of finding or training a replacement
  • service or repay any debts that are called in
  • cover the impact of a writedown in the goodwill of the business
  • provide needed liquidity
  • help keep staff and maintain essential supplier relationships.

Are there alternatives?

A business may have other strategies to help manage their risks, including asset sales, promoting staff or reallocating workloads even temporarily, using profits, borrowing more, or drawing down existing loan facilities.

However, insurance is the only practical alternative where a business doesn’t have the capacity to cover its risks.

If you want to know more and see if it can apply to your business, why not give me a call? 07 5593 0855.

Protect your assets from expensive mistakes

Protecting yourself from frivolous creditors and lawsuits is becoming an increasingly common concern. Here we outline some of the ways you can insulate your assets.

Check your insurances

Liability insurance is a must if you want to safeguard your assets in the event that you need to pay compensation. Lawsuits can arise for a range of reasons – from personal injury to financial loss resulting from any products or services you provide.

You can choose from three key types of cover – public liability insurance, professional indemnity insurance and product liability insurance. Seek advice from your financial adviser or insurance broker to determine which, if any, of these are suitable for you.

Separate business and personal assets

If you are a business owner and your family home is held in your name, it may be at risk from bankruptcy or litigation procedures.

One way to protect your home is to give majority ownership of the home to a person who is not an owner of the business, typically a spouse. The business owner generally retains some interest in the home, however, to ensure the asset is not dealt with without his or her authority. It is also important that the spouse does not having any dealings in the business, for example guaranteeing loans. You should also know that the trustee in bankruptcy will consider other factors to determine the bankrupt’s interest in the house and if you transfer your home to your spouse for no consideration or for less than its value, before bankruptcy, the trustee in bankruptcy can in some cases reverse the transaction.

Create a trust

Trusts can be beneficial asset protection strategies, as you are transferring ownership of an asset away from yourself and into a legal structure, so the asset is not yours to lose in the event you are sued.

Anthony Lieu, Lawyer at Legal Vision, says trusts also provide a degree of flexibility.

“Just as each family is different, each discretionary or family trust is also different. Trusts generally take their rules and operation from the trust deed, so each trust will have to abide by a different set of rules,” Lieu says.

Summary

Structuring your assets the right way is one of the most important things you can do to protect your hard-earned wealth. As these strategies can be complex, always seek the help of a qualified professional such as your financial planner, lawyer or accountant.

We’d love to assist and can also help you find the right professionals to help.

Where to turn for advice?

Time and again, we hear and see headlines on the latest scams and the heart-breaking journeys of those ripped off.  From a dodgy tradie to those cashing in on the bitcoin boom, scams can come in all shapes and sizes and are getting harder to recognise.  Sometimes, it’s easy to sit back and judge when it’s not us involved and it seems ‘glaringly obvious.’  But for those who got ‘done over’ it’s very real and very painful.

The Australian Competition and Consumer Commission (ACCC) report that over $5 million per annum is lost to scams, but seeing that many are too ashamed or embarrassed to admit their error, the number is quite likely much higher than that!

So, where to turn?

When we have serious health problems, we head to the doctor or specialist.  A serious legal issue means we call in the lawyers.  We want someone with training, experience and qualifications to assist…, but Aussies, in particular, seem pretty happy to take financial advice from family and friends… or even the hot tip from the cabbie!

Professional advisers, however, are likely to have years of experience and training and can help size up investments in ways that our loved ones, just cant.  We don’t want to get left behind with the latest buzz, but we also don’t want to be caught in the latest get-rich-quick scam iether.

Devoting years to study and having inside knowledge of investments and markets plus hours of ongoing education and professional development, can mean a bonus for you.  A good adviser is a steady hand at the tiller and the calm voice during the storm that can help you stay on track and naviagate the good and bad times.

Planners develop investment strategies based around your personal timesframs and financial goals and help you assess the risk and the return.  They’re the ones who help guarantee a good night’s sleep instead of staring at the ceiling and worrying.

Advisers now are on an ASIC register so you can check them out: Financial Advisers Register.  You can find who they’re licenced through, what they can advise on , their qualifications and training and if any disciplinary actions have been taken against them.

To find out what others think of your adviser or leave feedback yourself, you can now also head to Adviser Ratings to see feedback from both clients and colleagues.  There’s lots of research you can do before getting advice so ensure you interview a few to find the best fit for you.

Your finances will be glad you did!

 

Confronting Child Marriage in Malawi

Part of our visit to Majete 5 involved meeting people in the village who were open enough to share their homes and stories with us.

For some background, for many years, their homes and village formed part of the Majete Game Reserve, and naturally enough for people suffering chronic persistent hunger, the wildlife was viewed as a food source and the trees were cut down to burn and sell the charcoal as an income source.  Over time, this decimated the area until the Government finally decided to partner with private enterprise and re-establish the game reserve to entice tourist dollars back to Malawi.  It was pitched as good for the villages to bring money back to the country, but to those starving, made little sense.

Fencing the entire reserve meant that those living in the Park were forcibly relocated outside of the perimeter and much antagonism arose with the local communities cut off from what they once viewed as their own.

To assist in helping villages find their feet again and look for new sources of income, The Hunger Project was asked to partner with communities around the Reserve and assist with mindset change and leadership.  Education assists in helping find new sources of income and building a better life.

Yet for now, some things remain the same in the villages.

Maxwell (32) and his wife Shiveira (28) welcomed us to their home.  Shiveria was very shy and is currently expecting their 5th child.  Their eldest is now 15 (do the math!) was married at 12 and is a mother herself.  Maxwell told us she wanted to be married and wasn’t forced, but they needed the dowry to be able to eat.  We were witnessing firsthand inter-generational child marriage and teen pregnancy… and it was a little confronting.

I found it difficult to suspend judgement and just listen to the story for what it is seeing it’s so different, unacceptable and unusual in my own culture.  Child marriage however has long been considered normal in the area and no-one raises an eyebrow.The legal age for marriage in Malawi is 18 however child marriage still regularly occurs in the village areas with little to no intervention from the village leaders.

Maxwell’s daughter stopped attending school once having the baby and may never have the opportunity for further education… until The Hunger Project bring their literacy classes to the area.

At home, remain 2 sons and another daughter, plus the baby on the way.  Hopefully by the time their existing daughter is a teenager, the mindset training will be complete and her parents will take part in the Vision, Commitment and Action workshops, educating them with alternate options.

Well, here’s hoping anyway!