Technology has changed the way we use and value money.

Apart from all the physical, emotional and family effects, mobile technology has changed the way we use and value money.

We live in a world where we don’t see physical money often. Online purchases are made and cards are tapped or swiped.

Data from comparison site finder.com.au reveals if current trends continue, physical cash could vanish in Australia as soon as 2026.

Children’s games on tablets are purchased online without a hint of any notes or coins being exchanged.

How do they learn to check change or even add up their bills?

How will children learn the real value of money without seeing, touching or paying with it?

Children lack the connection between themselves and the day to day essentials to live in this world.

How will they form an understanding of life skills?

Guiding money-wise kids

Here are a few tips to help your kids to be money-wise:

1. Explain ATMs – how and where the money comes from

2. School banking – if your school has a banking program, open an account, contribute money as a reward and set an end of year goal to withdraw

3. Explain debit and credit cards – that they have to be paid off, topped up with money and that purchases are not free

4. Pay pocket money electronically – set up an online bank account and contribute money for chores and homework. Once they are old enough to manage their own bank account, transfer the money over and teach them how to use ATMs (if they are still around), and to read and check receipts

5. Start educating them about the world of finance from a young age – start with the simple money jar or piggy bank

And for the teenagers, check out the show on ABC ‘Teenage Boss’ hosted by mathematics teacher Eddie Woo.

It follows fifteen teenagers from across Australia as they take control of the family finances for a month, with some surprising and not so surprising results.

Being money-wise is important to us. We can help guide you on the right budgets and investment decisions for a successful financial future – and one to teach your children and grandchildren.

Contact the office today for a confidential discussion if you or your young adult children need help with managing their finances.

Australians’ love affair with property

Why people DO it

Around 20% of Australians invest in property for:

• potential capital growth

• rental income

• tax benefits

They tend to consider property one of the more solid, less volatile forms of investment because you can actually touch bricks and mortar.

They like the feeling of getting ahead financially.

They don’t want to be one of the 80% of Australians who have to rely on the aged pension when they retire

Why others DON’T

They:

• need more information to take the first step

• don’t know how to ensure their investment is not threatened by interest rate rises or unreliable tenants

• aren’t sure about how to pick appealing properties for good rental return

• don’t realise they can probably afford it – even if they don’t have a big salary

• think all debt is ‘bad’ and haven’t realised that an investment property could make them money and even pay for itself

Here are some time-tested strategies to help overcome common initial jitters about investing in property. Getting an education from people who are investors themselves is the fastest way – go to those ‘in the know’.

1. Being comfortable with your debt level and being able to afford the repayments

Borrowing to purchase income-producing assets such as investment properties is considered by financial experts as ‘good debt’. Rental income is generally used to pay the mortgage and expenses whilst the owner benefits from any capital growth in the value of the property. Bank guidelines also reduce your risk because they simply won’t lend to you if they don’t believe you can repay the debt (and they also allow for interest rate rises).

2. How to keep making payments on your investment property if you lose your job

Positive cash flow property – This is where your rental income exceeds the mortgage payments and property expenses. Direct the excess rental income into your offset account and hold it there as your ‘rainy day account’ to cover loan repayments if you find yourself unexpectedly unemployed or financially strained.

Negative cash flow property – Negatively geared property is when the mortgage needs ‘topping up’ from your income.

Your property deductions/out of pocket expenses may help you to secure a tax refund at the end of the financial year. Save your tax refund as a buffer. Alternatively, your accountant can help you request access to your tax refund for a reduction in your weekly tax. Put this extra amount aside each week and it will help accumulate a buffer to maintain the property in the unfortunate event that you lose your job or your income is reduced.

3. Risk of not securing a tenant

The best way to mitigate this risk is to carefully select a property with high rental appeal. Only buy in high rental areas where the vacancy rate is consistently less than 3%. It is also sensible to select a property manager before you settle so they can secure tenants immediately.

4. Possible problem with bad tenants

How do you pay the mortgage if the tenants don’t pay their rent? Or pay for repairs or damage caused if they ‘do a runner’? The answer is landlord insurance to cover any losses. The cost of this insurance is minimal when you consider the cost of not having it – and it is tax deductible as well.

5. Coping with interest rate increases

Changes to interest rates are a fact of life. If you are going to invest in property allow for interest rate increases and only purchase property that you can afford to hold onto even if rates rise.

6. An exit strategy is your ‘pull the pin’ plan

It is best to put this plan together in the cool light of day, before you buy, because doing it under pressure can lead to the wrong decision. An exit strategy gives you peace of mind and allows you to sleep at night.

Call our office today and make an appointment to discuss your property investment plans. You’ll need a clear idea of how much you can borrow before you start looking at properties.

Technology and Kids

A state of insufficiency

We all know that technology has become an increasing part of our everyday lives across all generations – and none more so than children.

In fact, Australian children as young as four and five years old are spending 2.2 hours each week day watching screens. Those numbers increase to 3.3 hours by age 12 and 13 and longer on weekends.

Effects of technology are long and varied

The long and varied list of the effects of technology include online addiction, access to inappropriate content, reduced physical activity, security, hacking, online predators, sleep difficulties and family conflict.

Amongst the problems cited above, technology can affect family wellbeing and harmony.

Television has been around since 1954 and in Australia since 1956. Back then those who were fortunate enough to have one often watched television as a whole family activity. But times have changed.

New technology offers children independence from their parents’ involvement in their social lives with social networking and messaging sites. Parents see it as a loss of connection – but it is not all the children’s fault.

Parents can be just as much consumed by technology as their offspring. In fact, if you have an iPhone, check out your daily and weekly screen time usage. It is alarming. As adults, we typically use our smartphones not just for communication but as an ‘escape’ to the online world of social media – seeing what others are doing, browsing and even reading books.

Most of us have our work and personal life all in one phone. That ‘ping’ we hear during family dinner time or even when we sleep may be an email from the office or calendar notification of some sort!

Children are born to learn

Children are born to learn, to socialise. We have known for decades that without social interaction and relationships, we are denied connection and bonds – a core part of being human – as explained in Maslow’s theory of a human’s basic needs.

Modern family life often consists of TV dinners and TV (or iPad) baby sitters which seem to be the way of life now. Yet we have all heard about the numerous studies and warnings on how harmful these are for our society and the impact this will have in generations to come. We are already seeing the scary evidence.

Effects on children’s learning

A former teacher and education and technology researcher, Kristy Goodwin, studied the effect of technology on children’s learning which was highlighted in an SBS Insights segment.

Although there are benefits to using devices to create digital content for storytelling, movie making, creating animations or coding, there are also many complaints.

Screen time causes myopia – a condition of the eye where light focuses in front of the retina instead of on the surface, resulting in blurred vision.

The research showed that the premature introduction of screens, before the eyes have time to develop, was a cause of the condition. Another common complaint when it comes to kids and technology is the way screens can captivate and hijack their attention. There are two main reasons why we all find it so hard to digitally disconnect.

The state of insufficiency

1. The brain releases neurotransmitter dopamine. Looking at social media will give our brain dopamine hits. Dopamine is associated with the pleasure system of the brain. This in turn motivates us to do, or continue to do, certain activities.

2. When we’re online, particularly on our phones, Goodwin says “…we enter something called the state of insufficiency. We never, ever feel done. We never, ever feel complete.”

We have all seen the trance like looks on children’s faces – the tantrums and those videos that have gone viral on social media showing children ‘losing the plot’ and having demonic screaming meltdowns due to the lack or removal of access to Wifi or their computer games.

Technology is here to stay. Be proactive and control it. Don’t fear it. Set boundaries, install parental controls and educate your children on the dangers of technology and appropriate information.

Consider how the online world is affecting the way we use our finances and the important lessons our children are missing out on as we move towards a cashless society.

3 Essential Behaviours for Financial Success

TOO MUCH OF THE MONTH LEFT AT THE END OF YOUR PAY?

Do you tend to overspend?

If so, you are not alone!

Did you know?…

• A staggering 86% of the Australian population don’t know how much money they are spending every month, although 90% think they have a good handle on their spending.

• With the convenience of alternative payment methods (ie tap and go), 63% of Australians have increased their spending in the last five years.

• 91% spend without thinking, and 86% lose track of their spending.

• About 70% of people believe that alternative payment methods make it easier to spend money that they would not spend otherwise.

As living expenses rise, but wage growth remains subdued, Australians increasingly overspend and dip into their savings – if they have any at all! In fact, more than one in five Australians have no cash savings.

Many of us are spending our hard earned salaries without tracking what we are doing with it and not ‘capping’ the different areas of expenditure.

Consequently most of us miss out on channelling that unnecessary spend into something more meaningful:

• a holiday

• extra superannuation payments

• future family commitments

• home renovations/upgrades

• new furniture/car/other

• future investments

Beware the money wasters

Here are some examples of what could happen when we are not paying attention to how we spend our earnings:

• Using ‘easier’ alternative payment methods that result in higher cost outcomes.

• Using credit cards for ‘tap and go’ (when we may not have the cash at hand) instead of debit cards (knowing the money is already in the account). • Overspending at social events such as drinks and meals when out with friends (46% of people admit that they have shouted a round of drinks that was not reciprocated).

• Overspending on special occasions (like birthdays and Christmas). Your budget should include all special occasions for both family and friends, AND stick to your limit!

• Bad online habits – especially teens and tweens who are blowing the family budget. Half of Australian parents of tweens and teens have covered the bills for unapproved online spending for mobile calls or data, in-game purchases, music, video streaming or apps.

Caught up in social media advertising and online shopping remarketing?

Let’s face it – technology makes online shopping easy and accessible. More sophisticated social media marketing is increasingly putting more products and services in front of consumers more often.

So what are the 3 essential behaviours for financial success?

1. DISCIPLINE

Disciplined saving and controlled spending WILL put more money in your pocket.

Consistent habits make a big difference when it comes to wealth building and financial success.

By regularly checking how you spend your money (if only say 30 minutes – once a month) will help maintain focus with where it is going.

There is no better feeling than accomplishing something financially – whether it’s paying off a bad debt (like that credit card), saving for a holiday, getting your super sorted and working for you or simply building up an emergency fund for times when the cost of living is so high.

If nothing else, it will take some of the stress away knowing that you will be able to access the funds that you have set aside when you need to, whatever the need may be.

2. PERSISTENCE

Nothing great ever happens overnight or typically without a constant and persistent approach.

While others may be appearing to be having all the fun, it is usually short lived and ends up as one faded memory running into another.

• Avoid tempting situations – If you’ve spent your budget for the month, avoid the shops (and jumping online) or cut back on your social outings.

• Maintain good money habits – Spend less than you earn and set automatic savings.

Get help – this is where we fit it in!

3. ADAPTABILITY

Inevitably you will encounter bumps and distractions along the way.

In most cases, what you start out to do, and what you end up with, are not always the same. Part of success with anything is to be prepared for a change in advance and be willing to take a few calculated risks along the way.

APPlying good money habits… There’s an app for that!

With so many cards, accounts and transactions, combined with less time and more financial stress, we’ve been racking our brain on how to help our clients track their spending better and help them take some financial accountability.

So we thought we’d share a few easy to use, low or no cost ways of helping you track and manage your finances.

There are easy smartphone ways to budget, save and invest that don’t require much effort by you.

Q. How do I know how much I am spending?

Many of the lenders we recommend to you offer great online tools to help you track and manage your spend.

When you log into your online banking next time have a look around to see what they offer.

Every lender is different but some of the useful tools are money or expense trackers allowing you to:

• set budget targets and savings goals

• view and categorise your transactions

• select time frames to achieve these goals

• display your spending as a graph

You will be surprised at how they already categorise and split your spending without you even knowing.

Some lenders allow you to add all your loyalty cards into their app. This keeps your wallet from exploding to ensure you don’t miss out on all those loyalty points.

BUT BEWARE – if you add these to your lender’s app they will know all of your spending habits intimately from Chemmart to Dan Murphy’s.

There are many apps outside of your lender that offer the same convenience for storing all your loyalty, store and other cards for ease of use and the goal of having a smaller wallet (like Stocard and Apple Wallet).

Have more than one bank account?

If you are like most people, you may not keep all your accounts with one bank.

Enter Pocketbook and Finch.

These are FREE Australian budgeting apps that collate multiple bank accounts and track your expenses.

They automatically sync and categorise data from your bank accounts daily. You can then set a monthly allowance for each category or types of spend. You can even set bill reminders and it can send notifications when you are nearing your limits.

Pocketbook was named best money management app in the 2018 Mozo Experts Choice Awards, however there are some critics who say it isn’t very user friendly.

Finch will allow you to:

• pay your friends directly if you owe them money

• split the dinner bill

• help you track your spending and money owing from housemates

• collect fees from your sports team and

• help you split travel expenses with your friends!

Q. How can I track all my other finances such as super, credit cards, investments and loans?

There is an app for that too!

MoneyBrilliant. It works much like the others. This FREE app allows you to track bank accounts. For a $9.90pm plan you can also connect your credit card, super, loans and investments in addition to all your assets and liabilities.

PLEASE NOTE – there are many, many applications available now to help you with your budgeting, savings goals and tracking features – too many to keep track of really. (Maybe there’s an app for that?)

THESE ARE NOT RECOMMENDATIONS FROM US TO YOU.

This is an awareness article to let you know there are tools, MANY tools, to help you track and manage your finances.

Have a look at your lender’s tools as a first place to start. You will be surprised at what is already there.

As with everything to do with your finances:

do your own research

read the terms and conditions

understand ALL the third parties who will now have access to everything that you do financially and the consequences of sharing your information

AND

• call us first if you are struggling to meet your daily or monthly commitments We are, after all, your finance specialist who (other than yourself) cares the most about your personal finances and financial wellbeing.

Look before you leap and plan ahead before you retire.

There is no end of financial advice on preparing for retirement: superannuation, investments, tax minimisation, age pension eligibility, funding your desired lifestyle – the list goes on. All these areas of advice highlight the importance of planning ahead – the sooner you start the better prepared you will be.
One of the biggest decisions for many retirees is whether to stay in the family home or purchase smaller or ‘retiree’ accommodation. It may be their most significant decision both financially and emotionally.

Is it better to plan ahead? In the years prior to retirement many homeowners find themselves with substantial equity in the family home and fewer expenses as kids (hopefully!) leave home. It’s an ideal time to consider using the equity in your home to buy that retirement property now. In the years leading up to your retirement, the rental income and possible tax benefits will help pay for your property.
With the potential benefit of positive movement in the housing market – and now having two properties – this may place you in a good position to increase your retirement nest egg if you choose to sell your family home when you downsize. Depending on your situation you may even be able to keep the family home as an investment.

Downsizing is on the move According to the Productivity Commission, approximately 20% of Australians aged 60 or over have sold their home and purchased a less expensive one since turning 501. It is expected this percentage will increase as more Baby Boomers move into retirement.
As a result, there has been increased demand for suitable housing for retirees such as villas, townhouses and units. Growing competition for limited stock in many established areas has increased prices – in some locations the cost of a villa can be as expensive as a three bedroom house. This trend may continue.
But beware – the reverse can happen in an off the plan situation. Some off the plan properties are valued lower than purchase price upon completion and lenders have restricted lending in certain areas.

Why downsize? The decision may be as simple as living in a property that is easier to maintain, closer to family or one that supports your lifestyle choice – many grey nomads LOVE being able to lock up their small pad and hit the road!
Selling could also release money for other investments that provide you with additional income in the future. This may give you more choices in retirement and avoid alternative equity raising options such as a reverse mortgage on your current property.

Look before you leap Before putting your home on the market you should consider the following:
Understand your reasons for selling. Don’t just consider short term needs – factor in potential long term needs.
Explore ALL the implications of selling your house – financial and otherwise.
What are the advantages to YOU? If you’re moving to be near family what will happen if they move elsewhere?

Smaller isn’t always cheaper. Explore all the costs of moving and maintaining a new home. Will you be ahead?
Have you sought financial advice? How will funds from the sale of your home affect your Centrelink assets and income tests? Will selling impact your Age Pension?
You may miss people, activities and services in your current area if you relocate to another region. Make plans to re-establish yourself or keep contact with your social circle.
You will need to cull a lifetime of possessions. ‘Letting go’ can be difficult. Try doing without items or living in a confined area of your house for a bit to see how you adjust to ‘smaller living’.
Ultimately, downsizing from your family home should provide you with a whole new way of life that is better than the one you left behind. With careful planning and a clear understanding of your future goals you could be well on the way to making it your best move yet!

Keeping your credit score healthy

Your credit file is one of your most important financial assets.  Safeguarding this file is an important part of the finance application process.

Your credit file contains credit applications, overdue credit accounts, payment defaults, clearouts (as a missing debtor), commercial credit information and public record information. You will have a credit score calculated from your credit file.
From September 2018, there is additional information about the credit products you hold on your credit report including:

• The type of credit products you have held in the last two years
• Your usual repayment amount
• How often you make your repayments and if you make them by the due date.

Did you know that a score of less than 500 will severely affect your ability to gain finance from many lenders?

Do you even know what your score is or how easily it can be affected?

What is your credit score?

Credit scoring is a mathematical assessment of the data included in your credit report. The credit score is calculated by the credit reporting agency using a number of complex formulas. The score shows the likelihood of an adverse event recorded in the next 12 months. Scores range from zero to 1,200.

The higher your credit score the lower the risk that you will default. A ‘good’ credit score is between 622 and 725.
Credit reporting
The credit report is the basis for your credit score. In Australia there are four credit reporting agencies: Equifax, Experian, Dunn & Bradstreet and Tasmanian Collection Service.
You can access a free copy of your personal credit report through the following online providers: Creditsavvy, Creditsimple, Finder, Getcreditscore and WisrCredit.

Your credit report is very important as it provides the information used to calculate your credit score.

You will have a credit report if you have applied for any form of credit.

This can include:
1. phone contracts
2. credit cards
3. residential or personal loans, or
4. hire purchase

So what affects my credit score?

There are some behaviours you can control that will affect your score:
1. late payments,
2. overuse of credit, and
3. limiting the number of credit applications

We have had clients lodge a loan application with us only to be rejected due to a poor credit score. When we investigated the cases we found there had been multiple credit enquiries listed in a short period of time. What the clients didn’t realise was that every time they were offered (and accepted) a new credit card (at their local grocery store and service station) these services were individually lodged as a credit enquiry.

Our clients had also sought pre-approval from various lenders while they were searching for a new home. These pre-approvals were also listed as a credit enquiry. When the time finally arrived to acquire their home loan, it appeared they had submitted many applications for a range of credit over a very short period. This history resulted in a low credit score and subsequent rejection by the lender.

Surely the lender can understand  what really happened?

Unfortunately many major lenders are now treating credit scores as a black and white decision. If your score is too low then the loan application will be rejected – no questions or discussion!

What should I be doing?

You need to be conscious of your credit report. Make sure you meet all your credit obligations. If you are considering refinancing in the next couple of years, be aware of all agreements, pre-approvals and enquiries you make (where you sign a privacy agreement) as these will generally result in an entry on your credit report. These entries  stay on your file for 5 years.

Is ‘free’ credit card travel insurance worth it?

Do your research and watch your spend!

‘Complimentary’ travel insurance is an increasingly used feature on many premium credit cards.

According to ASIC’s Money Smart, 20% of travel insurance is used through a credit card compared to 19% through a travel agent and 31% direct from an insurer.

Traveller beware Credit cards with complimentary travel insurance can be a great way to save money, but it is important to check the eligibility criteria and what the policy will cover.

Travel insurance that comes with credit cards may not in some cases cover as much as a stand alone travel insurance policy you buy separately.

There’s the old saying that nothing comes for free…

Complimentary travel insurance isn’t really ‘free’. The travel insurance premium is usually paid through the annual fee on the card. So you might as well take advantage of something you have already paid for – right?

Do your homework first!

As with all types of insurance, it is advisable to do your homework, compare policies and always read the terms and conditions.

Generally, travel insurance covers you for medical expenses, loss of luggage or personal items, disruptions to travel and theft. Always check the limits and exclusions before you buy.

A travel insurance policy included on a credit card offers varying levels of cover when travelling domestically and internationally.

In many cases, for the credit card travel insurance to kick in, you need to satisfy certain terms and conditions. For example, you may need to pay for your departure ticket on your card to activate cover, while other cards require you to exceed a minimum spend threshold of trip expenses on your card before that particular journey will be covered.

Activation requirements, where consumers are required to use their credit card to pay for travel arrangements, vary from provider to provider.

Do your own research with travel agencies, direct with insurers or through online insurance comparison sites to help you make the right decision between stand alone and credit card travel insurance. These online sites provide further details about pros and cons of ‘free’ credit card travel insurance.

They will help answer questions like:

• How do credit card travel insurance and stand alone travel insurance compare?

• Who is covered?

• What is covered?

• What are the price comparisons?

• What excess will you pay if you make a claim?

• How much of your luggage and valuables are covered?

• What is the maximum period you can travel?

• What is the limit of your medical expenses?

Take control of your travel spending

The activation requirements (eg paying for that plane ticket), minimum spend requirements and on-the-go holiday spending and shopping could lead you to a hefty credit card bill at the end of your travels. Budget well upfront!

You don’t want to be one of the one in six Australians drowning in credit card debt or going over your credit card limit as a result of your holiday spending.

If you need to fund your holiday, talk to us first before you overload your credit card. There are other options to pay for those big ticket items!

Helping your Family

If you or a family member is heading for retirement, this information will help.

Will you have enough super to retire and live the lifestyle you aspire to?

With the average life expectancy of Australians being 82.5 years, how long will their savings last? Recent ‘Super Shortage’ research indicated that a retirement age of 65 years could create a super shortage of 12.5 years for Australians to live the retirement lifestyle they aspire to from 65 years.

Will you find yourself asset rich but cash poor in your retirement?

There are many options to consider when planning your future retirement cash flow. HOW will you fund your ideal retirement lifestyle? WHEN do you make changes?

Just one retirement strategy is downsizing, but…

Is it time to downsize?

One of the biggest decisions for many retirees is whether to stay in the family home or purchase smaller or ‘retiree’ accommodation. It may be your most significant decision both financially and emotionally.

Ultimately, downsizing from your family home should provide you with a whole new way of life that is better than the one you left behind. With careful planning and a clear understanding of your future goals you will be well on the way to making it your best move yet!

Is the government’s ‘downsizing into superannuation’ for you?

From 1 July 2018, the Australian government allowed homeowners aged 65 years and over to downsize their family home and invest up to $300,000 of the surplus into their super (eligibility criteria apply).

It was announced by the government as part of reforms to reduce the pressure on housing affordability. It may also come as a relief and a welcomed strategy for many retirees, particularly those on the east coast who may have reaped the rewards of equity growth over the past decades.

About the downsizer measure

The downsizer contribution:

• Is not a non-concessional contribution and will not count towards your contributions caps

• Can still be made even if you have a total super balance greater than $1.6M

• Will not affect your total super balance until your total super is re-calculated to include all your contributions including downsizer contributions at the end of the financial year

• Will also count towards your transfer balance cap, currently set at $1.6M

• Is only applied for the sale of one home. You can’t access it again for the sale of a second home

• Must be made within 90 days of receiving the proceeds of sale, which is usually at the date of settlement

• Is not tax deductible and will be taken into account for determining eligibility for the age pension

If you sell your home, are eligible and choose to make a downsizer contribution, there is no requirement for you to purchase another home.

There are other eligibility criteria to meet and each individual’s circumstances must be assessed for suitability.

The ATO website explains all eligibility requirements. Or contact us and we can put you in contact with a specialist to help you.

Time will tell if this downsizing contribution into superannuation will be an attractive option for retirees.

As your finance specialist we welcome the opportunity to discuss your future plans or those of your parents!

Through our own knowledge and that of our networks, we can help you live your dream retirement lifestyle.

DID YOU SAY $1M TO EDUCATE MY CHILDREN?

You thought babies were expensive? Predictions show the cost of private education could be as high as a family home…

For most people, when starting to plan for a family, we usually consider the cost of babies and child care.

Cast your mind forward to when that baby is at primary and secondary school. Do you know how much he or she will cost to educate?

The cost of education has soared 61% in the past decade and is growing faster than average wages at 34%.

In fact, for a child born in 2018, the estimated cost for primary and secondary education is estimated at $66,320 in the public system and $475,342 for the private system per child.

If you have three children, the cost of educating them in our capital cities’ private education could top $1.6M – the same cost of some family homes!

Even conservative estimates from the Australian Institute of Family Studies show a couple with two children can expect to spend over $40,000 for 13 years of education .

Regardless of where you live and if you use public, faith-based or private education, school fees continue to be a major expense.
Many parents fail to appreciate the many additional expenses associated with funding a child’s education.

• Extracurricular activities

• School excursions

• Uniforms • Camps

• Technology (bring your own computer). iPads are required at some primary schools as young as year 3 and laptops at high school!

• School fundraising

• Travel expenses

Over the years, having worked with many clients who have children and have had to adjust to additional costs, we have at times observed the following:

• Mortgage payments reduce

• Personal debts and/or credit cards build up

• Refinancing options are limited due to lower servicing levels

• Investment plans placed on hold

Investments are typically the first item we see families put on hold while their children are young.

How can we change this?

Hidden savings from life after day care

For many, ‘big school’ also means no more childcare fees.

The usual average weekly cost of formal care for 16 hours per week in 2017 was $110.50 per week after subsidies. If your child is one of the almost 50%4 who attend care this could mean significant extra cash to redirect into contributing to education expenses.

The start of school is also an opportunity for a lot of parents to increase their hours of work or return to the workforce on a part or full time basis. This can also have a substantial effect on family income and lifestyle.

How do you best use these hidden savings?

Our other observations are that these hidden savings are typically absorbed into everyday living. We forget that we have actually been managing ‘without’ for a while. When we stop paying day care fees, our retail shopping goes up, or that holiday is booked and/or we buy that new car we’ve been waiting for.

These hidden savings can contribute to many things that will help you with your plight for affording your children’s 13 years of education:

• Investing

• Paying off credit cards and other debt

• Paying down your mortgage (leaving you with more equity to invest)

Depending on your individual circumstances, we may be able to assist you to structure your finances and savings accounts to not only fulfil your home buying and investing goals, but ALSO help cover your children’s future education costs.

And let’s not start talking about university…

If your children’s future education costs concern you, why not call us for a chat?
You may be surprised how, by redirecting some hidden savings, we might actually get you on track with your family’s education costs and investment dreams.