Loud budgeting: Amplifying your financial awareness

24 September, 202424 September, 2024 Budgeting, Education

Saving for a first home often requires a significant amount of discipline and sacrifice. The challenge of accumulating the necessary deposit can feel overwhelming, making it difficult to maintain motivation. Everyday distractions, such as weekend outings with friends or the latest gadgets, can easily derail savings efforts.

A common issue is the perception that long-term savings goals are unattainable, which can lead to a lack of motivation to forego immediate pleasures. Traditional methods of managing finances may not always address this issue effectively.

Enter loud budgeting—a strategy designed to tackle these challenges head-on. Loud budgeting is a goal-oriented approach that involves openly sharing savings goals with trusted friends and family, creating a system of accountability. The transparency of loud budgeting helps maintain focus and drive.

Here’s how loud budgeting works:

Review Income and Expenses: Begin by drafting a realistic budget that reflects current financial circumstances.
Set Savings Targets: Break down the overall savings goal into smaller, manageable milestones.
Track Progress Visually: Create a large, colourful chart to monitor progress and place it in a visible spot.
Utilise Technology: Make use of savings tracker apps provided by banks and budget calculators available on financial websites.
Engage with Support Networks: Share updates and invite feedback from friends and family to keep them involved in the journey.
Visualise Success: Maintain motivation by envisioning the achievement of the savings goal, such as moving into a new home.

Incorporating loud budgeting into your routine can transform the savings process into a structured and motivating experience. Each progress update on the tracker brings a sense of accomplishment, and reaching milestones is celebrated with those who offer support.

Consider a scenario where you aim to save $20,000 for a home deposit within 16 months. By adopting loud budgeting, you break down the goal into manageable monthly targets. For example, you set a target to save $1,250 each month.

At the beginning of the process, you create a colourful chart and track your progress regularly. You use budgeting apps to monitor your savings and share updates with your support network. Every time you hit a monthly target, you celebrate with your family or friends, reinforcing your commitment.

Over the course of these 16 months, this approach helps maintain your motivation despite encountering challenges such as missed trips or unexpected expenses. By consistently tracking your progress and celebrating milestones, you remain focused and driven. As each milestone is achieved, the sense of accomplishment grows, making the final goal of reaching the $20,000 deposit feel attainable.

By the end of the 16 months, you successfully reach your target amount. The journey has been marked by steady progress, accountability, and shared celebrations, showing how loud budgeting can make saving for a home feel like a rewarding team effort.

Loud budgeting might not be for everyone, but it’s a great way for many people to hit their financial goals. It can make saving for a home feel like less of a solo mission and more of a team effort that’s both rewarding and fun.

The information provided in this article is general in nature only and does not constitute personal financial advice. 

When was the last time you paid cash?

7 July, 202130 June, 2021 Updated on30 June, 2021 Budgeting, Education

Prior to COVID, we were steadily moving towards a cashless world. Post 2020, even the most resilient of us has made the leap to tap-and-go payments sooner than we expected. From the morning coffee to filling up the petrol tank, we wave that plastic with little thought to the impact on our account balances. In fairness to us, many retailers are now adopting the ‘no-cash please’ trading regime, but we Australians have a reputation for embracing technology and touchless shopping is no exception. According to the Organisation for Economic Co-operation and Development (OECD), Australian household debt is currently sitting at around 210% of net disposable income. That places us fifth in the world, behind Denmark (257%), Norway (240%), Netherlands (236%) and Switzerland (223%). Compared with countries with spending habits similar to our own – the USA with (105%) and the UK (142%) – we’re quite high. If your debt level is pushing northwards of your preferred limit, here are a few ideas for getting, and staying, on track: – Pay your full card balance off every monthSure, it’s an oldie but a goodie. You know what you need to do; if your current balance is too high, pay more than the minimum amount. The first step in breaking the credit cycle is to get off it, which leads into our next point: – Create a realistic budgetThis will identify where your money is going and how much extra you can pay off your credit cards. The government’s Moneysmart website has a free budget planner to help you. Alternatively, chat with your financial planner and work with them to develop a payment strategy to get your debts under control, and stay that way. – Keep your tap-and-go receipts and reconcile them against your account each weekThis is one of the best ways to see exactly how much you’re shelling out, and on what. You’ll identify areas of unnecessary spending, and you’ll spot any errors or dodgy transactions. – Instead of a credit card for your touchless transactions, consider using a pre-paid cardAvailable from banks and other financial institutions – even Australia Post offers one – you load it with your own money and use it for in-person or online shopping. It’s just like a credit card but without the risk of getting into debt. – Consider your subscriptionsYou know, streaming services, magazines and memberships, etc. Many renew automatically and the first you’ll know about it is an unexpected – often expensive – transaction on your card. Do a stocktake to see what subscriptions you have and decide if you really need them. For those you no longer need, change your subscription settings so they don’t automatically renew. Don’t worry, they’ll alert you when the renewal is due in case you change your mind! We’re definitely living in an interesting time. Our lives have altered in ways we’d never have imagined and we Australians, in our typical way, are adapting to these ‘new-norms’. This is a good thing, just as long as we stay in control! The information provided in this article is general in nature only and does not constitute personal financial advice.

The challenges of being a Carer

22 November, 202310 January, 2024 Updated on10 January, 2024 Aged Care, Budgeting, Centrelink

Caring for a loved one can be deeply fulfilling but brings its fair share of challenges too – as Laura discovered. When her mother Shelly had a stroke, she didn’t require a nursing facility, but could no longer live alone. Laura was working part-time while studying a Bachelor of Dental Surgery and dreaming of one day opening her own boutique dental practice. She assumed that moving home to care for Shelly wouldn’t greatly affect her career plans, and, in fact, giving up her rental accommodation would save money. Unfortunately however, Shelly had had to quit work so the pair only had Laura’s wages to live on. Yet the bills kept coming in, and on top of everyday living costs, expenses such as medicines, transportation and modifications to the home soon added up. Additionally, helping Shelly attend medical appointments and assisting with errands put Laura behind in her studies. Since Shelly’s condition was not going to improve, Laura deferred her course; telling friends she’d return later. A great emotional weight settled on Laura’s shoulders as she automatically prioritised her mother’s day-to-day needs above her own. As expected, Shelly’s condition worsened. Medical sessions often clashed with Laura’s work commitments leaving her no option but to give up her job as well. While expecting to support her mum physically and emotionally, Laura wasn’t prepared for the financial hit. Fortunately, the Australian government offers a range of financial assistance packages, such as: Applicants must meet prescribed criteria and the amount of payment varies depending on the situation. The Government website www.servicesaustralia.gov.au contains a wealth of information for carers, including eligibility criteria, entitlement estimation calculators and information on how to claim. Shelly’s doctor provided program leaflets and additional details, and helped Laura gather the medical paperwork and other relevant documents. For Laura, giving up her job impacted more than just her finances. Having already lost friends after too many declined invitations, she now lost her last source of social interaction. Resigning herself to a life of care, Laura abandoned all thought of returning to university, along with her dreams for the future. It was around this time that Laura discovered Carer Gateway www.carergateway.gov.au and Carers Australia www.carersaustralia.com.au. These websites provided valuable carer resources, information and assistance services. While recognising that financial relief was crucial, their emphasis was on the relevance of self-care, urging carers not to underestimate the importance of their own well-being, particularly their physical and mental health. Laura found a community of people who understood her situation, and a network of support groups, counselling services and respite programs encouraging carers to balance their care-giving responsibilities with their own needs. One of Laura’s new friends suggested she seek legal advice around Powers of Attorney, and a financial adviser specialising in estate planning for both her own and Shelly’s peace of mind. These days Laura says she feels the world opening up as the silence around caregiving is broken. With her mother’s illness, her life took an unexpected turn, yet it has expanded in other ways. Laura’s future is looking brighter; she has even enrolled in an online dental assistant course. Not exactly what she’d originally planned, it’s nevertheless a pathway to her own future, and more than that, she’s daring to dream again. The information provided in this article is general in nature only and does not constitute personal financial advice. 

A helping hand for the holidays

23 November, 202216 November, 2022 Updated on16 November, 2022 Education

Summer and the festive season are times we all look forward to, balmy evenings, relaxing holidays and social get-togethers. Like a beacon on the horizon, it provides something to aim for as we work, play and navigate our way through twelve, long months. Our modern world is busier and more stressful than ever, and for many, the holidays also represent a time when feelings of isolation, worries over work, finances and family conflicts, seem intensified. A time when more families than ever seek the assistance of charities. Tin-rattling events and fundraising campaigns don’t happen as often over the Christmas period. Charity chocolate boxes – always popular in the office – are ineffective if most people are on leave. So how can you help? People are traditionally very generous around Christmas-time, but for some organisations, it’s not always about cash; there are ways to contribute that don’t involve donating money. For example, the needs of disadvantaged children are foremost for organisations such as The Smith Family. This organisation focuses on enabling children to build better futures for themselves; aiming to break the poverty-cycle through education. Regardless of your education, skill set or background, if you want to make a difference to the lives of children, see www.thesmithfamily.com.au for further information. During times of crisis, not everyone has a shoulder to lean on, yet a caring ear is close by thanks to organisations like Lifeline. Lifeline provides emotional support 24/7, existing, “…so that no person in Australia has to face their darkest moments alone.” Lifeline has a volunteer program where you can be trained to support people in need via phone or web chat. Alternatively, Lifeline can assist you to set up your own personalised fundraising page so instead of receiving gifts for your wedding, anniversary, birthday (whatever occasion you choose), friends and family can donate to Lifeline instead. For further details, go to www.lifeline.org.au. During the holiday season, with all the associated excitement and frenetic activity, it’s easy to forget the voiceless, those unable to speak for, and support, themselves. This time of year, wildlife charities struggle through lack of funding, and an inundation of animals injured or left homeless after bushfires, habitat loss or road accidents. While cash donations are needed to buy food and medicine, if you’re unable to help financially, donations of bedding, old towels, blankets and food are equally important. You can also organise your own fundraising event. Alternatively, if you’re a knitter you can make possum-pouches, or those handy on the tools, can assist wildlife carers in building pens, fences and enclosures for animals. Each state has administrative wildlife centres that distribute aid and workers where they’re most needed, in Victoria contact Wildlife Victoria www.wildlifevictoria.org.au. As we face the end of the year our focus is naturally on summer holidays and festive celebrations but remember that if you or your family are experiencing difficulty, these charities exist for you too. So now we turn to a new year. We draw a line beneath the last one and look forward to twelve months of renewal and possibility. The information provided in this article is general in nature only and does not constitute personal financial advice.

Three steps to your children’s financial success

27 January, 202117 September, 2021 Updated on17 September, 2021 Budgeting, Education

For many of us, our first experience of banking and savings was the school Savings Account Program. But in 2019 the Australian Securities and Investments Commission (ASIC) raised concerns that these accounts had little lasting impact on children’s savings behaviour. All parents want their children to be better-off than they were – more secure and financially independent, but the big question remains: where do you start? Ushering your children toward financial security can be a simple three-step process. Step 1: Create good habits Start early; learning to save is one of life’s great lessons. In an increasingly cash-less society, it can be difficult for children to understand the value of money and how to save. Help them by: Providing a piggy bank for very young children, or a glass jar through which they can see their savings mounting up. Teaching the difference between needs and wants. Lead by example with your own savings habits. Involving them in the household budget; compare prices at the supermarket and demonstrate bill-paying. Paying pocket money for age-appropriate chores and helping them to create a mini-budget, apportioning money to: spending on anything they want. donating to charity to instil a sense of community and empathy, saving for a goal; helpful in teaching kids restraint and how to avoid impulse buys. Step 2: Inform Nothing is free; water in the tap, electricity and even the internet don’t just happen by magic. One of the best ways to teach kids about responsible money handling is to explain debt and the consequences for not meeting financial obligations, which segues neatly into a discussion about personal credit scores. People with better credit scores find seeking finance approval easier and often qualifies them for more advantageous lending deals and better interest rates. Helping kids understand the concept of a credit score can be a little daunting, so try these tips: Brush up on your knowledge first. Try our eLearning section for some great general information. Don’t focus on numbers, explain that it’s about financial behaviour over time. Avoid complexity and keep the information age-relevant. Use examples. Discuss mistakes you’ve made in the past, explain how you rectified them. Step 3: Consider where you’re saving Record-low interest rates have taken the fun out of savings, but don’t let that stop your kids from calculating how much they can earn from the right type of account. The Moneysmart website has savings calculators that kids can play with and learn from. The banking and finance industry offers a plethora of accounts specifically designed to encourage kids to save. Help them research the account that will suit them; consider fees and interest. Additionally, searching online will reveal a range of websites, blogs and apps dedicated to engaging and educating kids about money and savings. Introduce your kids to good habits while they’re young, and you’ll be setting them up for success. Finding the most child-appropriate plans and accounts that specifically suit your child’s needs can be a minefield. Our financial advisers will work with you to assist you to guide your children into a financially secure future. The information provided in this article is general in nature only and does not constitute personal financial advice.

Regaining financial control after a scam

23 April, 202430 April, 2024 Updated on30 April, 2024 Budgeting, Education, Retirement

A year before retirement, Tess’s superannuation plan was on track, and she was imagining her post-work life. With savings of $34,000 at the bank, she was looking to park it somewhere it could earn better interest while rates were rising. Considering herself reasonably savvy with money, she began investigating her options. After hearing about someone who’d made a fortune with cryptocurrency, Tess was intrigued and decided to look into it. Tess researched crypto-companies and compared what was on offer. When eventually she made her decision, she believed she’d chosen the right investment – how wrong could she be! Within hours Tess realised she’d been scammed. Shocked and feeling ill, she reported it to ScamWatch, but over the following days the self-blame settled in. How could she be so gullible? So naïve? What was she thinking?! How could she have fallen for such an obvious fraud? Who knew that financial shame was a thing? But there it was in the form of an empty bank account. Deeply embarrassed, her financial security shattered, Tess lay awake every night berating herself; through her foolishness she’d lost all her cash savings! She became withdrawn, declined social events and refused to unburden herself, even to close friends. Finally, in desperation, she decided to speak with a counsellor. Tess discovered organisations like Beyond Blue, ScamWatch and Lifeline offered advice and emotional support. She chose one that felt right for her. Initially, it was difficult to open up and acknowledge her mistake, but the counsellor explained that part of her recovery was confronting her feelings head-on and realising that victims came from all cultures, backgrounds and levels of education. Feelings of humiliation and shame were normal, although unjustified, as the crooks were highly skilled criminals with access to the latest technology. Heartened by the counsellor’s words, Tess learned to stop blaming herself and confided in her daughter Louise. What a relief that was! Louise was gentle and supportive, and introduced Tess to her friend Jarrod, a financial adviser. Throughout Jarrod’s career, he’d assisted innumerable people who’d fallen victim to scams. Most felt insecure and vulnerable, so his approach was to assist them with practical advice around getting their finances back on track. He believed that Tess would benefit from a temporary, part-time job. She could rebuild her cash savings, and staying busy would distract her from her worries and help her move on. When discussing her interests and skills, Tess mentioned she loved animals so Jarrod suggested she consider pet-minding or dog-walking, adding that he could setup the necessary insurance. Then, Jarrod explained, that while her superannuation was on target, there was a difference between investing for retirement and investing for wealth. Retirement investing was about saving to fund an income stream that met post-work lifestyle goals. Complying retirement funds offered tax advantages and focused on generating returns. Conversely, investing for wealth involved accumulating assets beyond what is needed to provide retirement income. For Tess, financial security was critical, so Jarrod considered her risk tolerance and structured a tax-efficient portfolio of growth assets to support capital appreciation and wealth accumulation. It also meant that Tess could leave something behind for Louise – a legacy she hadn’t felt was important, until she realised how financially exposed the scam had left her. Tess’s recovery wasn’t without its challenges. It took time and sacrifice, but along the way she developed a greater sense of independence and resilience. She delayed retirement by a year, so she could recoup her lost savings and contribute the money from her new side hustle to her wealth portfolio. In the end, Tess’s Dog Minding and Walking Service continued well after Tess’s retirement, for the sheer enjoyment she derived from hanging out with dogs. The information provided in this article is general in nature only and does not constitute personal financial advice. 

Why financial advice may be your best investment

30 March, 202223 March, 2022 Updated on23 March, 2022 Education, Investing

It is commonly assumed that seeking financial advice is for the wealthy, and it only helps the rich become richer, yet financial advice can prove useful to anyone who wishes to better their financial future. Financial advice is like getting a health check-up for your financial situation. Your financial adviser is like your personal trainer, assisting you in achieving your best possible financial health. Seeking professional financial advice provides you with a clear path to achieve your financial goals, and that is an investment worth making. Why invest in financial advice? Financial advice isn’t only about investing your money in the share market. Want to save to buy your first home? Want to protect your children in case of your death? Want to enjoy a comfortable retirement? Don’t understand what to do with your super or how to invest in the share market? Think of a financial adviser as a one-stop shop for the majority of your financial issues in life. Come to think of it, be it your parents telling you to save money from your first job or an Instagram ‘finfluencer’ explaining the benefits of compound interest while dancing to a trendy song, these are all informal pieces of financial advice you receive throughout your lifetime. However, a professional adviser can legally provide holistic advice by reviewing your entire financial situation and your risk-taking capacity to recommend an appropriate investment portfolio. Also, an adviser’s investment recommendations are based on research which can give you comfort over your decisions rather than constantly worrying about the investment you made based on your work colleague’s stock ‘tip’. Is financial advice cost effective? The financial advice industry has undergone a monumental transformation following the Financial Services Royal Commission of 2017-2019. As a result, new education and compliance requirements have been legislated to further protect the client’s best interests. This has led to a drop in the number of financial advisers Australia-wide – from approximately 28,000 in 2018 to just 19,000 in 2021. The silver lining here is that while there are fewer advisers to choose from, the quality of advice is deemed to improve exponentially. As per Russell Investments “Value of an Adviser” report, advisers added a value of approximately 5.2 per cent to their client’s portfolios in the 2020 COVID-19 pandemic. Still, the true value of financial advice is much more than comparing the fees you pay against the performance of your investments, or the tax saved on your income. A financial adviser can be a sounding board for your financial ideas, a resource to answer the simplest or most complex of queries, provide research-backed recommendations, and guide you over the long term based on their experience. Ready to make the investment? Your day to day job may not allow you to focus on the financial aspect of your life. In contrast, your financial adviser’s primary daily responsibility is to help you handle your finances efficiently. So, are you ready for your financial check-up? Take the first step and book an appointment with us today. The information provided in this article is general in nature only and does not constitute personal financial advice.

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