MyCents Learning https://www.mycentslearning.com Tue, 28 Apr 2026 04:03:06 +0000 hourly 1 https://simplero.com/ How Do I Save For A Holiday https://www.mycentslearning.com/blog/43554-how-do-i-save-for-a-holiday Sun, 02 Aug 2020 16:06:50 +1000 http://www.commoncentsfp.com.au/?p=851 What do you talk about when you’re at a party? How big your home loan is or how great your holiday was? How many bedrooms your house has or how many steps you climbed to reach that temple in Central Asia? What stories will you be telling your grandkids: the ones about that time you extended your house or the experiences you had when you holidayed in that amazing location?  Holidays are a vital part of rejuvenation and recuperation and if you can combine your rest time with unforgettable experiences then you’re really ready to get back to work when you return.   Here are a few tips so that you can afford amazing experiences even with all the competing demands on your finances. 
Four steps to a solid budget 
Yes, a bit of therapy time. Acceptance, Awareness, Improvement & Performance are the four steps to creating and running a solid budget.  First things first, we need to Accept that the word budget is not actually a four-letter word. A budget is something that you create, you decide what needs to be spent where. It’s completely up to you. It’s safe to say that a good budget is the foundation to every financially successful person. So you need to Accept that having a good budget means you’ll have greater money management skills which of course leads to you mastering your money and leading your richest life  It can be illuminating maybe even surprising to you to find out just how much you spend in a particular area. Being shown what your financial reality looks like can sometimes be a little confronting. This is what we call Awareness of your expenses. If you don’t know where things are going wrong then how will you know what to change?  Improvement is where you take your new found understanding of where your expenses lie and use this to help you Improve your outcomes so that they better align with what you truly want. This is a constant process of renewal because you are never in your current stage of life for long.   The fourth stage in Budgeting is Performance so that you are hitting your targets month in and month out. Get in the zone and really make your budget work for you.  Now, there are so many different types of budgets going around so, rather than be intimidated or assign an air of resignation you need to try a few out and adopt the one that works best for you. Remember that it doesn’t really matter how your budget works, as long as it does work. 
Get your Vision of your holiday right 
If you’re dreaming of an ideal holiday but you have no idea what that looks like then you’re unlikely to ever actually have that experience.  Ask yourself as many questions as possible so that you can refine what it is you’re after down to something as exact as you can.  For example: 
  • How many people are going with you? Is it a solo trip, with a friend or partner, with kids, with relatives, with a group? 
  • Is your destination just the one place or a group of places to be visited one after the other? 
  • What sort of weather are you looking for? Sun, sand, snow, wind, water, fog, heat? 
  • Are you looking to experience another culture and language or is it more just a location that you want? 
  • Does the travel itself constitute part of the experience?  
  • Is it an active holiday with lot’s of adventures and hikes or is it a passive holiday with lying by the pool the main agenda? 
As you design your holiday and your vision starts to get clearer try and get a mental picture of what your experiences will feel like, what will the sights and sounds and smells be?  You’re not just building a holiday, you’re building an experience. It might not be a life-changing experience but if you’re clear about where you’re going then it’s going to be a memorable one. 
Cost it out 
I’d love to say that you don’t have to think about money but it’s a reality for all of us and if it wasn’t then I also probably wouldn’t be writing this post.  So, it’s time to start costing out your holiday.  Personally, I find the easiest way to do this is using a spreadsheet. I’ve tried different sites online to plan out the trip and its finances but I always end up back at the simple and dependable spreadsheet.  If I put in flights, car hire, fuel, insurance, hotels, day trips and food allowances I can then try and break down the trip to a daily cost per traveller. When added up over the total number of days I’m planning to be away the final figure can get a little confronting. It’s important to be aware of these figures though otherwise you’ll wind up with the most dangerous financial illness of all and one that can be crippling to your future: The Holiday Hangover.  It has nothing to do with the amount of beverages you’ve enjoyed but rather a lot more to do with the credit cards and personal loans you’ll take out to try and pay for everything you’ve committed to at the last minute. Believe it or not, I’ve met many people who have taken this short term finance in the middle of their holiday after they’ve quickly worked out that they’ve run out of money prematurely. It’s not a great place to be nor a recommended experience. 
Automate and hide 
If you’ve followed the steps above then you’ve worked out some of the ‘know’ part of your holiday finances but now you need to ‘change’ some of your money habits so that you can ‘do’ the saving required to get you going.  I find the most successful way of doing this is via the ‘automate and hide’ method.  It’s a straightforward process of taking the total cost of the holiday you’ve worked out and dividing that by the number of weeks until you want to leave. The weekly savings figure you’ve calculated can then be added to a savings vehicle on an automated basis so that it’s deducted straight from your pay or from your pay account as soon as possible after your pay is credited.   Add the money to an account that you are unlikely to be tempted to touch such as an account that is not on your internet banking account, maybe an account at a different bank to your regular bank or maybe even extra repayments on your home loan as long as you’ve checked first that you’re able to draw that money back when you need it.  This is so it is removed from sight and your day-to-day decision-making process and you are less likely to raid the funds to pay for some other urgent but not important emergency. **unless it is actually a real emergency in which case remember the holiday takes a back seat in priority!!** 
Download our free e-book 8 Smart Ways To Get Financially Fit 
Take comfort that your holiday will happen 
Remember the steps: 
  1. Organise your Budget 
  1. Nail your Vision 
  1. Cost out the holiday 
  1. Automate and Hide your savings 
There will always be detours to the financial planning of your holidays but if you follow the steps you can take comfort that your holiday will not just be a dream, it will be a reality experience that you’ll be talking about for the rest of your life.   ]]> 0 What sort of home loan should I get? https://www.mycentslearning.com/blog/43553-what-sort-of-home-loan-should-i-get Mon, 27 Jul 2020 14:14:43 +1000 http://www.commoncentsfp.com.au/?p=848

Do you have a home loan? What sort is it – fixed rate, variable, line of credit, interest only, principle & interest? Maybe you’re applying for a new loan or an extension to the one you already have?

Here are some tips to keep in mind before accepting the till-death-do-us-part terms & conditions your bank will put in front of you.

Borrow what you should, not what you can

Imagine walking into a hamburger shop, looking at the menu and having an idea of what it will take to satisfy your hunger. Now imagine the very polite person behind the counter taking an assessment of the size of your hunger, the size of your mouth, the size of your waist and then making a recommendation to you that you should, indeed you qualify to be able to have three of their deluxe hamburgers along with an extra large box of hot chips plus a super jumbo sized thickshake.

Imagine then being told that they are now going to give you a leaf of lettuce completely free because you are such a valuable customer to them and they really care about you.

What do you do at this point? You’d probably tell them to rack off, right? You and I both know that what you eat has little to do with your capacity to fit it all in, it’s a lot more to do with your actual needs.

Banks want you in debt to them forever. The word mortgage literally stems from the words ‘dead pledge’, you take this stuff out until the day you die.

Why then, are we so accepting of their ‘qualification’ routine, willingly jump through the hoops to get in their club and so gratefully accept their offer of extra finance? Is it all just to have our egos stroked so blissfully and get into the McMansion so we can gloat to the friends who couldn’t really care anyway?

We don’t accept pushy hamburger salespeople and we shouldn’t accept their finance-doppelgangers.

How do you then get what you should and not what you ‘qualify’ for?

Read on....

What is the term of your servitude?

In the early 1990’s, home loan interest rates in Australia reached record highs of over 20% and today they are at record lows of 2-3% yet we pay more now from our budgets in home loan repayments than ever before. Crazy, right?

This is purely because of the intangible sounding 30-year mortgage so readily offered by banks. Why is it so readily offered? Because when you apply a low interest rate to that oversize menu offering and stretch it over 30 years the repayments come down and all of a sudden it doesn’t seem that bad.

But we have no room to move because we’ve borrowed all we can or more on day 1. You can’t renovate, you can’t extend and your choices to be able to step back from work to study/holiday/travel/write are gone because if you don’t make those repayments then guess who comes knocking? NOT the friendly sales person who got you in this mess that’s for sure!

You now need the value of your home to increase so that you can at least sell and pay out your loan and try to start again OR you can borrow more to get you out of the mess because the bank has told you that this will help you.

Wait, WHAT?

I strongly encourage you to aim for a 15 year term on your mortage. This means for every $100,000 you borrow you should be paying $800 per month in repayments.

You can still take a 30 year mortgage but you should make extra repayments so that you are on track to pay it off in half the time, 15 years.

By making a decision based on what you can afford in YEARS, then you will likely be limited to what sort of property you can buy and what location you can buy in.

This is a good thing, purchasing a lower priced property means you need to save up a smaller deposit, pay less stamp duty and will be debt free in half the time.

Do you want to be debt free at age 40 or 55? Do you want to be taking family holidays in amazing locations in your forties or do you want to be still working a second job so you can meet mortgage payments?

Watch out for the marketing hype

Repayments are the most significant factor in paying your home loan out ASAP. Other items such as low interest rates are just the ‘icing on the cake’ for you so whilst it’s important to be aware that your interest rate is in line with current rates it should not be the primary driver of how much you’re borrowing.

Advertisements that show low-fees or loyalty program bonus points quite often don’t show the higher interest rate that goes with it. I’ve seen these advertisements for loans that carry an interest rate that is almost 1% higher than comparative loans without the shiny additions. To illustrate, if your loan is $300,000 then your additional cost just for the first year is $3,000 yet the fee saving or loyalty program bonus won’t even come to $500.

Who is it that they are in business to help?

You still need a loan

It’s nice to think that you don’t need a loan and that you can save for everything you need however in the current economic environment this is not likely to be achievable.

Keep the main points in mind:

  1. Borrow what you should, not what you can
  2. Aim for a timeframe that leaves you with choice, not a pledge till death
  3. Ignore the slick marketing

Taking control of your finances is a simple process but it is rarely easy, approach your decisions slowly and with care and celebrate your future with less financial headaches.

]]> 0 What do I have to do to get ahead financially?? https://www.mycentslearning.com/blog/43552-what-do-i-have-to-do-to-get-ahead Fri, 23 Aug 2019 15:14:40 +1000 http://www.commoncentsfp.com.au/?p=766

Do you have a friend that is always droning on about what they’re going to do next so that they don’t need to worry about money anymore? If they’re like a couple of my friends, they will no doubt spend more time talking and very little, if any time putting these ideas into action. Getting ahead financially is rarely done quickly and it’s never exciting but by taking the following simple steps you’ll set yourself up a much richer life.

Vision -

Most of the time when taking a drive you know where you’re going and it’s only seldom that we’ll hop in the car and just drive without direction. Yet it’s the opposite for many when it comes to money -  the thought of doing something with purpose to achieve a particular goal is rare.

Having a clear, descriptive vision of what your richest future looks like to you is vital. You must know what you want - at least vaguely - so you’re not wasting your time and money now.

Income & Expenses -

While there is no rulebook that tells you what you should be earning and spending, you should use some rules to control how your spending works with your earnings. Get a grip on the basic relationship between what money flows into your household and what flows out.

Your rules don’t need to be complex, in fact it’s best if they’re as simple as you can make them. The primary aim is to keep your spending less than your earnings. Bypass your own biases by paying bills and making savings directly out of your pay, automatically. Have a spending account and know that when it’s empty then you have to wait till next pay for your next indulgence.

Borrowing -

In Australia, we are in a period of record low interest rates which is great considering our borrowings have never been higher. House prices are massively overvalued according to some which only feeds the household borrowings getting higher.

What’s amazing is that today, at a time of record low interest rates, the amount each household pays in interest on their home loan is higher than that paid by each household in the late 1980’s at a time of record high interest rates.

Don’t be fooled by low interest rates, the principle of your loan still needs to be repaid and when this is unaffordable to you then your family will be sacrificing their future to maintain this large debt today.

Plan B -

Sometimes things don’t go according to plan and taking some time to work out a backup can payoff in unexpected times.

Today, there are more homes lost to illness and disability than there are to fire yet only one third of working Australians have any form of disability insurance.

If you had a machine in your house that generated $80,000 per year do you think it would be wise to insure it?

Guess what that machine looks like? You!

You must be an investor! -

I’ve worked with thousands of financially successful families from all walks of life and they are all investors. None of them waited to have lots of money before they started investing, they all started with small and regular savings and then kept at it over long periods of time.

I love the story of two friends, Wal & Wendy. Wendy started investing $200/month when she was 20 and she did this for 10 years until she turned 30 and then didn’t invest anymore. Wal chose to do the same as Wendy but he didn’t start investing until he was 30 and then kept investing the same $200/month until he turned 65.

At age 65 you’d think Wal would have more money as he invested every month for 35 years but Wendy only for 10. What’s amazing is that Wendy actually wound up with $425,000 and Wal with only $388,000! This is purely because Wendy’s money was invested for longer.

The moral of this story? Start now, not later!

Take the Project Finspiration quiz to learn how you behave with money

Depending on how your finances are looking at the moment you may feel a little unsure of the points above.

Out of all the families we’ve worked with over the last 20 years, these are five of the crucial elements (and also the easiest to do) of building your financial fortress:

  • Dream your clearest and most detailed Vision
  • Understand the relationship between your Income & Expenses
  • Only borrow to meet your needs
  • Use insurances for simple and cost effective backup
  • Learn to invest. Small & regular & long term

I’ve read complaints from people stating that organising their finances takes too much time, there’s too much effort, it’s too boring, there’s no point, they have no money etc etc.

All of this is rubbish. Really. I’m not saying you need to spend all of your time pouring over financial information, this is just crazy.

Just spend a little time now to get things started and then revisit what you’re doing at least annually. Maybe as you’re getting started doing a 6 monthly revisit would be worthwhile.

Remember that knowing what to do will only have a 20% contribution to your wealth but actually getting in there and doing it will contribute 80% to your ultimate financial success.

So? Get out there and get started!

]]> 0 Worry is a futile exercise https://www.mycentslearning.com/blog/43551-worry-is-a-futile-exercise Sun, 18 Aug 2019 14:36:16 +1000 http://www.commoncentsfp.com.au/?p=757 From my twenty years’ experience working with family’s finances there’s nothing that gets a person more upset than an unwanted third party reaching in and threatening the sanctity of the household budget.  What challenges us as individuals the most when we’re threatened from outside the home is the feeling that we’re not in control. Having control over your money means you can make choices with your money that ultimately leads to greater comfort, security and happiness – in other words a richer life. Less control over your money is risky and while risks are an ever-present reality such as changes in legislation and investment risk, there are some more controllable risks that you can act on now – these are the risks associated with your personal debts. Household debt in Australia is rising sharply and is highly topical in discussions from interest rates to property prices. To give some perspective, in 1990 the ratio of household debt to income sat at 70% but today it’s approaching a staggering level of 200%.  In 1990 Australia sat in the lowest 33% internationally of household debt to income yet today we sit in the highest 20%. The difference has been driven by long term low interest rates and an interest-only culture.  Low interest rates might give a feeling that you’re about to save some money and that some pressure is about to be relieved on the household budget and while this can be true in the short-term, history shows us that unattended financial behaviours lead households to grow their borrowings rather than reduce their borrowings. Remember those interest rates from the late 80’s or if you don’t perhaps you’re familiar with your parents complaining about the interest rates from the late 80’s? It wasn’t unusual for home loan interest rates to be in the vicinity of 20%, a figure that should terrify anyone today with a mortgage. Interest rates now are only a fraction of what they were then but what’s interesting here is that there’s no more surplus in the household budget today than there was then.  IN FACT, home loan interest repayments today at a time of record low interest rates compared with household incomes are 21% higher than when interest rates were at record highs in the 1980’s. You read that correctly: households spend more on interest today with record low interest rates than they did at the time of record high interest rates.  Why? Interest rates might be a lot lower today, but they are charged against a much, much larger debt pie and coming back to the topic of control - you don’t need much to go wrong with your debt before you can spiral well and truly out of control. Your risks in having debts are varied: risks of rising interest rates, risks of losing your job, being retrenched or getting ill or injured among others. Being happy with your debts means you’re in control of them and this is where the trick lies because having control of your debts means putting in some hard work. There’s no substitute for this. Here are 3 actions you can take now to stay in control or maybe take back some control that you’ve possibly lost:
  1. Increasing your loan repayments so that you’re paying your loan off within 15 years. If you can’t afford the repayments to do this immediately then increase your repayments incrementally until you reach the required figure eg. increase by $100/month now then again in six to twelve months’ time when you’re able. Keep ‘stepping up’ your repayments until you reach your figure or till the loan is gone.
  2. Change any interest only loans to Principle & Interest so that you are at least making some reductions on your loan principle over time. When interest rates rise again you don’t want to be stuck with a massive debt.
  3. Never capitalising interest. Some spruikers say that not making repayments at all is the best way to maximise tax deductions on an investment loan however this is highly dangerous for you because the interest just compounds against you. Not to mention the tax office takes a dim view of allowing deductions for interest on interest.
Make sure too that your personal risks are covered by taking at least Income Protection insurance. If you lose your income because of an injury or illness there’s not a whole lot of options to repay the mortgage and keep food on the table. Try taking some time to reflect on the risks facing your household debt and calculate just how much control you really have if any of those risks came to fruition. If the answer is a little discomforting then now is the time to address them, while you have the control. If you need assistance with taking control of your money contact the office on 1300 376 781 or try our free ebook: 8 Smart Ways To Get Financially Fit]]> 0 Losing & Choosing https://www.mycentslearning.com/blog/43550-losing-choosing Mon, 01 Apr 2019 09:00:20 +1000 http://www.commoncentsfp.com.au/?p=687
  • Referral – Ask a professional you trust (accountant / solicitor) or trusted family or friends if they can recommend anyone with confidence?
  • Financial Advisers Register – ASIC maintain a register of all advisers licensed to provide personal financial advice in Australia – as well as important information about how long they have been practicing and their qualifications. Go to moneysmart.gov.au to search.
  • Adviser Ratings Website – Although not the only ratings website around I believe adviserratings.com.au is the most comprehensive and well worth a look. It is even possible to read reviews from other clients who have used an adviser, and you can search in your local community or by specialist advice topics if your needs are more specialised.
    • I would always recommend talking to at least two advisers before deciding on who to trust your family’s financial future with. Be sure to ask the prospective adviser for their Financial Services Guide or FSG (often on their website), and if you want a list of smart questions to ask - the ASIC MoneySmart website mentioned above has a great list to get you started. Losing your adviser and choosing a new one doesn’t have to be a traumatic experience. Know that there are thousands of caring professionals ready to help you and your family should the time come – use my top three tips and you never know you may wind up in a happier more secure advice relationship than you started in? If you’d like help to discover the right way forward, give us a call. Get in touch with us.]]>     0     Simple tools to avoid the debt trap https://www.mycentslearning.com/blog/43542-simple-tools-to-avoid-the-debt-trap Sun, 18 Nov 2018 18:58:02 +1000 http://www.commoncentsfp.com.au/?p=134 Here are the three mistakes many of us make:
    1. We borrow too much,
    2. We repay too little,
    3. We let the lender dictate the term.
    And here are the easy ways to avoid them:
    1. Take control and ask this question! The first mistake most of us make is letting the lender decide the amount. Don’t! Always remember, this your money, or more importantly, your debt to pay off. Start the whole process by understanding how much you can borrow, and make sure you’re comfortable with it. Turning up and asking a lender, how much you can borrow, is like sitting down at a restaurant and saying, ‘How much are you going to feed me?’ Both have a product to sell and it’s up to you how much you consume.To work out your maximum appetite - the most you can possibly repay - multiply your take-home household income by 30%. Your repayments should never exceed this amount, even with personal loans and credit cards combined.
    2. Do the sumsNow that part’s out of the way, take a moment to work out what your repayments should be based upon how much you’re going to borrow. This is where you need to customise the repayments so it suits your long-term debt goals.Take the amount you’re going to borrow and divide it by 100,000, then multiply it by 800. For example, is you’ve borrowed $300,000, divide it by 100,000 which makes three, Multiply that number by 800 which makes 2400. This is your monthly repayment ($2,400) and means that you won’t be trapped by debt for longer than you want.The maximum repayment should be the lower of points 1 & 2.
    3. 15 is the magic numberLastly, ignore the loan length your lender puts in front of you. The maximum term you should be looking for is 15 years. If these repayments seem a little high for what you want, take some time out and revisit your goals. Ask yourself, ‘Do I want a pretty house or do I want a life that’s rich and full?’ Then, take as much time as you need to answer it - this can be a tough decision for many households. If you’d like help to discover the right way forward, give us a call.
    Get in touch with us.]]>     0     Surefire ways to enhance your wellbeing https://www.mycentslearning.com/blog/43543-surefire-ways-to-enhance-your-wellbeing Thu, 01 Nov 2018 18:58:02 +1000 http://www.commoncentsfp.com.au/?p=135
  • Make your minutes count Stop counting your pay cheques and the hours at work, and start counting the minutes you spend with your loved ones. Some of you will remember Bonnie Ware, the Aussie nurse who spent years working in palliative care. Bonnie wrote the book The Top Five Regrets of the Dying which featured simple gems like ‘I wish I hadn’t worked so hard’. Set some healthy boundaries and choose more time with the ones that matter.
  • Feed your brain with beauty Whether you’re an avid reader, TED Talk connoisseur or audiobook buff, it pays to fill your mind with things that inspire you or simply, make you feel good. A little bit of self-love, self-compassion and kindfulness can go a long way. Here’s what’s lining our bookshelves, and headphones, at the moment:
    • Kindfulness (How to be kinder to yourself and find true happiness), by Caroline Millington Mix mindfulness with being a little kinder to yourself and you’ll quickly discover a whole world of magic. Millington maps out practical tools and encourages readers to take 10-minutes a day to cut through the psycho-babble many of us have become accustomed to. Overcome guilt and build your confidence. What’s not to love?
    • The Happiness Track: How to Apply the Science of Happiness to Accelerate Your Success, by Dr. Emma Seppala As science director of Stanford University’s Center for Compassion and Altruism Research and Education, Seppala offers practical tips on managing wellbeing at work. If you’re living in the fast lane and you’re ready to change gears, this one’s for you.
    • Why we all need to practise emotional first aid, TED Talk, Guy Winch Winch gives great insight into how invested we are to our physical health, compared to our emotional health. The sad truth is we spend more time learning how to take care of our teeth, especially as children, than we do our mind. How will you treat yourself the next time you feel emotional pain? And imagine what the world would be like if we practised emotional hygiene? This is 16 minutes you won’t regret.
  • Take the CC Walk’n’Talk ChallengeWe spend a lot of time ‘talking’ these days, through a screen. Chatting to ‘friends’ and ‘liking’ acquaintances without any real face-to-face connection. So, this week, we’re arming you with the CommonCents Walk’n’talk Challenge. Find a buddy, friend, brother, sister, son, daughter or other human you love, and set out on foot. Go for a walk, talk to each other and connect in all the ways you used to. We’d like to say, ‘Leave your phone at home’, but we know you’ll feel inspired to take photos. When you do, find us on social media and #commoncents #walkntalk #challenge
  • Write a to-do list you actually want to do Close your eyes and make a list of the last three moments you were really, utterly content. Take your time, then ask yourself these questions; How long ago were these moments? Do they have anything in common? How could I have more moments like this? This is a fun exercise that will give you insight to how you’re filling your days. Are you finding time to do things you really want to do? Are you so consumed by work, you’re not spending enough time with the kids or your hubby or wife? Have you let go of hobbies and things that inspire you because you’re too ‘busy’? Let’s face it, the to-do list never ends, so start filling it with things you actually want to do.
  • Join the Action for Happiness movement If you’re after super-practical tips to increase your happiness check out the Action for Happiness website. We love it because it’s full of fun tools, courses and tips you can start implementing today. Action for Happiness is a movement of people committed to building a happier and more caring society, all backed by leading experts from fields including psychology, education, economics and innovation. Jump in and check it out.That’s it for our wellbeing wonders. Got a few of your own? Share them with us below.
    • ]]>     0     10 tips to end your year on a financial high https://www.mycentslearning.com/blog/43544-10-tips-to-end-your-year-on-a-financial Thu, 01 Nov 2018 18:58:02 +1000 http://www.commoncentsfp.com.au/?p=136
  • Create a budget: Getting organised is empowering and essential to feeling great about your finances. Grab a pen or your computer, and make a list of any big expenses coming up in the year ahead. Plan your annual expenses out in monthly breakdowns then track your ongoing spend against your plan - this will quickly make you aware of any potential problems.
  • Reduce debt ASAP: Credit card debt in Australia is a staggering $32 billion! That’s a lot of zero’s! With an interest bill of almost $6 billion there’s no greater reason for you to reduce your debt, now. Start with small additional repayments and build up to force your debt down.
  • Review 2018: How did your 2018 finances fare? Add up your income, all your expenses and tally the progress of your net worth. Then you can decide now if you’re headed in the right direction.
  • Invest in your children’s future: Wanting a decent education for your children and paying for it are two different things. Start saving now into a designated account, perhaps even an offset account. This will give you and your kids more options.
  • Think of the rainy day: We all know the despondent feeling that sets in when an avalanche of bills arrive at an inconvenient time. It’s amazing how much a steady accumulation of small amounts will build over time. This creates a healthy buffer to overcome surprises.
  • Think of your ultimate financial future: Adding steadily to a good savings plan is the most reliable, and secure way, of securing your financial freedom. It doesn’t matter if you prefer property or shares, superannuation or not, start doing something!
  • Super: Now is the time to review your Super. Look at where it’s invested, what fees you’re paying and why, how much you contribute and how this affects your tax. Use the SuperSeeker service, offered by the ATO, and consolidate your lost super funds into one of your choice.
  • Manage your bank manager: Set up a meeting and talk to your bank manager; is your home loan the right one for you? Can you make extra repayments? Can you use an offset account? Will they help you consolidate some debt and rearrange payments to get debt free faster? Your bank manager is a part of your financial toolkit so get in touch and utilise their expertise. This conversation will also help you determine if your bank manager is the right one for you. If they’re not get a new one or use a broker to do it for you.
  • Manage your tax: This is a no-brainer but use your specialist Accountant to make sure you’re not paying any more than you need to.
  • Kids & finance: In most cases, your children learn about money from you. Open up with your kids about simple money lessons like budgeting and saving, making wise financial choices and insuring what’s important.

    • COMMONCENTS FAST FACT:

    Set SMART financial goals: Specific, Measurable, Achievable, Realistic & Time-bound. Thinking about retiring tomorrow is nice, but the fact it feels unachievable can lead you to ignore how simple wealth-creation really is. Set your goals and get excited! Want to learn more? Get in touch or come in the see us for a coffee to see how we can help. ]]>     0     Invest with purpose (and never worry about another Market crash) https://www.mycentslearning.com/blog/43546-invest-with-purpose-and-never-worry Mon, 01 Oct 2018 19:58:02 +1000 http://www.commoncentsfp.com.au/?p=138 SPEND WITH PURPOSE Every investment you make must have a purpose. In other words, if you have money in a bank account it needs to be for a reason that’s specific to you, not a general assumption, like, ‘it’s safe’. At CommonCents we advise clients to have three key areas of spending purpose - now, shortly and later. Now - Any spending you have upcoming in the next five years sits in this area. This includes items like, groceries, utilities, fuel, car maintenance and annual holidays. Shortly - Spending destined for the next 10 years sits here, and are typically larger in price tag. This may include a new fridge/washing machine, car, overseas holidays and school fees. Later - What comes later? Hopefully retirement, being debt free, or maybe that once-in-a-lifetime holiday or purchase of a business. Anything that requires 10 years, or more, of dedicated saving to achieve, sits here.

    INVEST WITH PURPOSE

    From spending purpose we can draw parallels with investment purpose and start to ‘quarantine’ the three spending purposes into three areas of investment risk. I like to call these time-based-risk-tanks. Tank #1 - This is for your now money and the risk taken needs to be very low. This is where bank accounts and term deposits come into their own. Invest monies here for no longer than five years. Tank #2 - Your shortly money lives here and risk can be a little higher, but not much. Some people might choose to use a term deposit for this Tank. But considering you’ll have a little more time (up to 10 years) and you should be adding to it regularly, Bonds/ Fixed interest investments could be more appropriate. Tank #3 - Pop your later money here. Risk and return in this Tank needs to be higher as you won’t be using this capital for at least 10 years and you need better returns. I’m not talking, ‘Horse 7, Race 6’ here, I’m talking quality business’ listed in Australia and around the globe. Market crashes are only devastating when you’re forced to sell your investments at the worst possible time. Using Tanks allows us to think of a farmer. Imagine a farmer who has plenty of water in reserve. Hopefully she’ll have enough time up her sleeve to wait for rain to make the grass grow, the cattle fat and decent buyers to come out of hiding. If you sell a farm in the middle of a drought, what price do you think you’ll get? Keep enough in Tank #1 and #2 and you can stay happy and relaxed when the financial drought comes and Tank #3 drops a little lower. When you’re next talking money with someone and they say they’re not sure if they have enough left in the tank, ask them which tank they’re talking about. Want to learn more about your Tanks and how to keep them flourishing? Give us a call or drop in for a coffee. ]]>     0     3 F’s your finances can’t live without https://www.mycentslearning.com/blog/43545-3-f-s-your-finances-can-t-live-without Mon, 01 Oct 2018 19:58:02 +1000 http://www.commoncentsfp.com.au/?p=137 If you’re anything like the rest of the human beings on this planet, you might be starting to think about next year, and how it could look a little different to the past year. Some of you will be checking out your finances, or doing a bit of research to see how you can do things differently to make real impact. If this is you, pay attention to the following three items. If you get these three F’s right, we know you’ll have a happier financial journey in front of you!
    1. Fees : Yep, as you may have been suspecting for some time, there’s a chance your fees are too high. Legislation, introduced on the 30th September 2017 requires super and investment funds to disclose all their fees, including related entity costs which many funds have used for decades to hide the truth from their members. The new requirements have some funds squealing from the attention, much like someone would who has been exposed when the tide goes out and we find they’re swimming without bathers. An investor who pays an additional 1% in fees, than what they need, can be short hundreds of thousands of dollars at retirement. This can be the difference between living comfortably and living, while trying not to lose sleep. Higher fees rarely translate to better returns so stop what you’re doing right now, and check what you’re paying.
    2. Fears : It’s one of the strongest emotions we can experience, and we all know what it feels like. Fear can motivate you (FOMO, anyone?), paralyse you, distract you and, at times, make you completely and utterly irrational. We all worry about something at some stage. And worry that our finances will be, negatively affected, ruin the future or destroy the hard-work-to-date, ranks up there with the best, or worst, of them. Market volatility is nothing new but when it swings in the opposite direction to what you want or expect it can terrify the most stoic of us. The fact is, fluctuations in markets are as normal as droughts, floods and fires. We don’t like them, we don’t want them but they happen and the way we react to them can have greater impact than the events themselves. Share Markets often have 20-year returns close to twice that of the average investor and the only reason for this is our fear emotion. When markets are rising we fear we’re missing out, so we buy in at the top. When they’re falling we fear we’re losing money, so we sell out at the bottom. Crazy, right? Aren’t we supposed to buy low and sell high? So remember, master your fears, don’t panic in times of turmoil and don’t praise yourself when markets are performing well. Markets don’t care for your emotions and they’ll leave you behind if you pander to your fears. All you need to know is, these are feelings, not facts.
    3. Fricking around : Do you want to know the single greatest reason why people don’t have enough money in their bank when they hit retirement? It’s not because the Government didn’t mandate a higher Super contribution rate, it’s not because the GFC hit or because Super wasn’t a thing for most of their lives. It’s because procrastination took over and instead of making small sacrifices early in life, they were forced to make major sacrifices, with limited savings, at retirement.  Act now and save more!  We know, it sounds simple but it’s not always easy. 20% of your household income is a great figure to aim for and will give you greater choices in the future.If you can’t reach that in one hit work on reaching it using the Step Up method  which is where you start small – say 1% – and then increase in small 1%  increments every six to  12 months. If you do it this way the changes will be so gradual you’ll hardly  notice the difference to your paypacket.
    Allowing fees, fears and procrastination to get away from you will restrict you to a poor retirement and a stress and worry-filled life. Get on top of them now to increase your knowledge, raise your confidence and grow your personal financial wealth. If you want more advice on living a richer life, don’t hesitate to reach out to us for a chat. Remember, the coffee’s on us. ]]>     0