How Much Are Our Parents Going To Leave Us?

The wealthiest generation we have seen in history are the Baby Boomers (1946-1964) – approximately 25% of Australians. They are now ageing and preparing to pass down a record-breaking amount of assets to their children.

Or are they?

Today's Boomers are currently living in a “You Only Live Once” mindset, driven to try new experiences and stay active in their golden years. Not only are they pursuing expensive retirement activities, and spending more on consumer goods than today’s younger generations, but they are also taking risks with investments.

Their years of children’s school fees, down payments on homes and cars, caring for grandchildren financially and so on, are taking a back pocket to their own future enjoying their money while they still can. Boomers are still spending, taking care of themselves for a change, and not ready to hand over their hard earned and accumulated wealth.

To compound this dwindling wealth transfer, our Boomers just aren’t even thinking about how to deal with their money when they’re gone. And if they have had that back-of-the-mind thought, they’re certainly not talking about it.

The discussion between parents and their children about wealth transfer is still a taboo subject.

Why could that be? Many parents are hesitant to have that conversation in fear of realising their mortality, but also in fear of raising their children’s financial expectations.

Parents also tend not to discuss their wealth transference ahead of time because they don’t want to deal with the ramifications of a child that feels hard done by. They may not have to deal with it when they’re gone, but someone does, and it can break future generations apart. So best to deal with it now.

 “Money is the root of all evil”, a biblical passage based on a letter from Apostle Paul, was never truer when it comes to inheritance. Some stories you hear of family fights over “unfair” distribution of inheritances would make their parents turn in their grave. Of course, they would never think that their children would fight over money. But it does create family problems. Often.

Planning what happens to this wealth transfer is a very important subject that does need addressing, whether it is initiated by the parent, or by the child. There is only one way to plan this Estate Planning, and that is to establish a plan.  

This Boomer inter-generational wealth transfer is fast-approaching, and the discussion needs to be initiated now. This discussion also needs to include every concerned party – those that are doing the leaving, and those that are doing the receiving. Every concerned party needs to understand the process and how it may affect them, and the positive impact it will have. The best place to start, is to form a relationship with a financial adviser. They are dealing with Estate Planning most days of the year.

Our Boomers, and their children, need to understand how financial advice can help avoid tax burdens, manage existing investments, develop retirement plans, and avoid family infighting down the track.

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Karen Vickers is a Sydney based Financial Adviser, at Arc Wealth, with years of experience helping individuals, couples and families manage their finances and transference of wealth. www.ArcWealth.com.au

Pay-Later Debts reach $903M in Australia

Did you see the report in LinkedIn Daily Rundown today that Australians collectively owe $903 Million in Buy-Now, Pay-Later debts?

An ASIC report found 1 in 6 customers who use payment methods like Afterpay and Zip Pay were in financial trouble like being overdrawn, delaying bill payments or borrowing money to pay off debts.

Of those people struggling, 60% were aged between 18 and 34.

Your Spending Plan can help you Take Control Of Your Money

It gives you a clear path; know exactly what you have to spend, and watch your savings grow.

Create www.yourspendingplan.com.au in an easy-to-follow course format.

Its cheaper than 4 cups of coffee.

#financialgoals #savings #linkedin #shopping #payments #financialfreedom #financialplanning #personalfinance #afterpay #zippay

When is Too Early to Start Your Christmas Shopping?

Are you ready to start Christmas shopping yet? Is it too early? Are you emotionally ready yet?

Can you imagine buying whatever you want: An iWatch, or even a new iPhone, that handbag you keep eyeing off as you walk past the store, a new jacket, or the latest sports shoes. Put it on your credit card, or split it over two credit cards, then it won’t seem as bad when you look at the statement.

We’ve all done it and it feels good. Coming home with bags of goodies, trying them on in secret, then when quizzed weeks later “When did you get that?” you retort “This old thing”. Haha, they’ll never know. Surely you’ve heard the old saying that “You live up to your income”, as your paycheque or income rises, so does your lifestyle. There’s nothing wrong with living well.

But, and there is always a But… that one-off spending spree is very rarely a “one-off”. It is addictive and gets the pleasure endorphins pumping. “Why not do it again, next week, it was fun and there’s still credit available on the card” And on top of all that the airlines are giving you reward points! Why wouldn’t you use your card?

Did you know that Australians owe approximately $33 billion in credit card debt. Here’s an easier number: Thirty-Three Billion Dollars. Personal debt per credit card holder is $4301.00 with an average of $723.45 in interest per annum. Yikes!

For many of us refusing to use a credit card is simply not an option. Without one it’s difficult to pay bills and even make reoccurring payments. So use it for that and not for shopping. What should you use for shopping and spending I hear you murmur sarcastically, Use a debit card. You can’t spend more than you have in the bank that way. You’ll find you will spend less and when you next look at your bank statement you’ll even question what you are buying and maybe start to budget.

While you’re at it, have a look at your monthly credit card statement. It shows how long it will take you to pay off your balance and how much interest you’ll pay if you only pay the minimum each month. (The short answers are “forever” and “heaps.”)

So overspending once in awhile is good for you; hopefully it shows you how addictive it can be and gets you to review the financial consequences of that binge. Although a “once-off” may not impact you that much now, think about those endorphins that are working to create a monster, and there’s nothing more destructive than a spending monster.

What about all that money you are spending on short term pleasure, and could be using toward the car, or house, renovation, holiday: the big ticket items that need saving for. Shame as those would be long term memories, not just a day of short term pleasure, even if it is in the name of Christmas.

What can you do to resist the “spending-money-I-just-don’t-have” urge?

Firstly use your debit card more than your credit card. Secondly put a simple budget in place, and then you’ll know what you have to spend, and what you don’t. We like to call a budget ‘Your Spending Plan’ as that is what we are all working around: Spending.

Here’s a helpful downloadable guide to control your spending and build your savings. 6-steps to Financial Security, a Free e-book from Your Money Sense. It’s a good starting point to get you in the right mindset to manage your money.

So next time you go for a bender at the shopping centre, take a few deep breaths before walking in, and think about the long term financial goal.

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Arc Wealth Financial Adviser - Karen Vickers

Suite 20 / 6-8 Herbert Street, St Leonards, NSW 2065

Australians Addiction to Debt is at a New High

When house prices are strong, household spending is also often high. Home owners think they are sitting on the golden egg, so they just keep spending.

When house prices drop, so should spending. But as we have seen in the past 6 months, housing prices have come off the boil, yet consumer spending is at an all-time high.

Are we in a property bubble? Probably not.

Will there be a crash? Probably not.

You need a bit more than a cooling off of Chinese investors to crash a property market. Factors like a depression, massive unemployment, exceedingly high interest rates, and an excessive oversupply of properties also need to be in play. They’re not.

So, although a crash is not on the horizon, the drop in the value of ‘Your Castle’ should give you cause to ease off your spending.

The Australian Bureau of Statistics says that “if their debt is either three or four times more than their income, or 75% or more of their assets value”, then a household is over-indebted.

Two-thirds of Australians’ debt is secured by their property. So, if your spending keeps increasing, yet your property value drops, you’re actually in a position of borrowing too much. And there will come a time when you need to reign it in. Probably sooner than later.

But managing your spending is easier said than done, right? Firstly, because not many of us know how to create a budget to check just how bad our spending may be. And secondly because it’s easier to ignore it.

Budgeting should be your fundamental starting point to make sure your spending is in control. After all, how can you tell you’re on track if you don’t know where your hard-earned pay-cheque is going?

Some of us, correction: most of us, will find it daunting to maintain a budget. Getting all your expenses together, tracking what should be paid and when, how much you have left for entertainment, saving for long-term goals – it’s enough to make you give up before you start. But what if there was an easier way to manage your cash-flow that didn’t require hours of sifting through receipts or crunching numbers?

Online spreadsheets and budget are a challenge, for anyone. Where do you start, what does this mean, what does that mean? What goes here, what goes there.

Let me help you there. Here is a link to Your Spending Plan as built by a Sydney based company, Your Wealth Vault, which educates people through the process of setting up a personal budget.

They have built an easy to use Course which guides you through the important steps to making a budget, and half way through you’ll have your fully functioning Spending Plan, just by way of following through the quick and easy course.

You’re probably thinking that all sounds too easy, there must be a catch.

There is no "catch", but there is a charge to use this ground-breaking money-saving software. Good thing is it’s no more than the cost of a few cups of coffee a month, or a bottle of wine, and way less than a few hours parking at a Sydney beach.

If you are serious about getting your finances organised and knowing exactly what is coming in and what is going out, then start the Course and create Your Spending Plan. You can always easily cancel if you feel it’s all too hard and life can get back to “overspending normal”.

SO start here >> Your Spending Plan

Australian’s Household Debt Ranks #4 In The World. When Will We Listen?

You’d probably think the consumer country, United States would rank above Australia, but they are almost half of our debt per household.

Australians have a debt problem and they’re not listening. High household debt is worrying at its best. It’s like a big semi-trailer screaming down the highway. If something bad happens in front of it, the driver has an extremely difficult time trying to stop, or even manoeuvre.

You’re probably saying it’s ok because our interest rates are low. What happens when they go up a quarter of a percent or half a percent, let alone when they creep up 1%? It’ll hurt.

The cost of ‘necessities’ like power, insurance, transport and health creep up every year. The fastest real household spending growth (2016/17) has been in Communications (phone, internet etc) at a rate of 6.6%, Medicine and Medical Aids at 4.9%, Household Appliances (because we are a Nation of consumers) at 4.9%, and Transport Services at 4.8%. Have your wages crept up at those rates?

Something has to give when household expenses are increasing each year, and household incomes are not. It’s usually the household savings that suffer.

So, you are in a better position than most if you actually have savings when things change. What if you don’t?

Then your debt increases. You borrow against your home, or you chase around for another credit card and start that evil route of spending money you don’t have.

I don’t want to get all technical and confuse you with WPI and GDP numbers as most of you will switch off so I’m keeping it simple.

It’s ok to have debt if it’s manageable within your means, but just be wary that low interest and a fairly good economy does have cycles and can change for the worst.

You need to keep a close eye on your finances, not just in your head, or a bank’s phone APP on your account’s activity this month. No, you really need to sit down and create a budget.

The secret is to have a plan, some guidance, direction, a helping hand. When it comes to saving, or not spending, it’s easy enough to put a plan in place, but whatever tool you use must break it down for you.

To take control of your money you need to understand the flow of it: Money comes in from . . . and Money goes out to . . .

Your budgeting tool needs to show you what your finances currently look like, what simple options are available to budget, and then how you can easily save money from that budget.

Everyone talks about a “Budget Plan”. I personally call it “Your Spending Plan” because that is what we are trying to control here – your spending

By creating a Spending Plan you can learn:

• ·       What your expenses are to the dollar
• ·       Know exactly what you have to spend
• ·       How to use your credit card wisely
• ·       And be able to take charge of your money and build financial security.

If you understand how your money flows, and you can learn that, you will see exactly what you are spending, what your expenses are, and how small changes can save you big money.

If you’re still reading this, you obviously know that you need something to help you manage your spending. I’m not saying to stop spending. You just need to be able to manage your money better.

Your Wealth Vault has created a course format budget which guides you step-by-step to create Your Spending Plan giving you the knowledge and capability to have optimum control over your money.

Spending, which you’ll still do, will take on a whole new light. You’ll be able to do it without the guilt and remorse you currently face.

The course, and creating and managing Your Spending Plan each month, will set you back the cost of 3 cups of coffee each month, but what you will save on your expenses should far outweigh that cost.

If you have ANY concerns about your finances and your spending, you need to visit Your Spending Plan.

#1 Way to Stop Overspending and Get Your Budget Under Control

You start every month with really good intentions, or maybe you wait for your new years resolution to roll around to “save more money this year.” Just like the diet, you soon succumb to “oh just this once” and then you get buyers remorse at the end of the month when all of your bills come in.

The signs of being a spending culprit should be fairly self-evident so I won’t go into detail other than to list them:

·       Your budget doesn’t add up – if you even have one. You’re spending more than you make.

·       Your credit cards are always at their limit.

·       You can, or do, only pay the minimum payment. This can get you into so much trouble financially.

·       You splurge on buying stuff, or on entertainment, and neglect your bills.

·       If your income rises, so do your expenses.

·       There’s more in your wardrobe than in your bank account.

·       You can’t make a start to make a change.

You may think you can’t change, but you can as long as you firstly realise there is a problem. It’s kind of like being a gambler, smoker, or alcoholic – you want to quit but it’s too hard to know how, or where to start, let alone stick to it.

The secret is to have a plan, some guidance, direction, a helping hand. When it comes to saving, or not spending, it’s easy enough to put a plan in place, but whatever tool you use must break it down for you.

To take control of your money you need to understand the flow of it: Money comes in from . . . and Money goes out to . . .

Your budgeting tool needs to show you what your finances currently look like, what simple options are available to budget, and then how you can easily save money from that budget.

Everyone talks about a “Budget Plan”. I personally call it “Your Spending Plan” because that is what we are trying to control here – your spending.

By creating a Spending Plan you can learn:

·       what your expenses are to the dollar

·       know exactly what you have to spend

·       how to use your credit card wisely

·       and be able to take charge of your money and build financial security.

If you understand how your money flows, and you can learn that, you will see exactly what you are spending, what your expenses are, and how small changes can save you big money.

If you’re still reading this, you obviously know that you need something to help you manage your spending. I’m not saying to stop spending. You just need to be able to manage your money better.

Your Spending Plan is a step-by-step budgeting tool which gives you the knowledge and capability to have optimum control over your money. 

Spending, which you’ll still do, will take on a whole new light. You’ll be able to do it without the guilt and remorse you currently face.

The course, and creating and managing Your Spending Plan each month, will set you back the cost of 3 cups of coffee each month, but what you will save on your expenses should far outweigh that cost.

If you have ANY concerns about your finances and your spending, you need to visit Your SpendingPlan.

Just Because You Spend Money Doesn’t Mean You Have Money To Spend

Does your overspending get the better of you? You know you need to do something about it but there is always a Sale on, and a Bargain at the next store.

You start every month with really good intentions, or maybe you wait for your new years resolution to roll around to “save more money this year.” Just like the diet, you soon succumb to “oh just this once” and then you get buyers remorse at the end of the month when all of your bills come in.

The signs of being a spending culprit should be fairly self-evident so I won’t go into detail other than to list them:

• Your budget doesn’t add up – if you even have one. You’re spending more than you make.

• Your credit cards are always at their limit.

• You can, or do, only pay the minimum payment. This can get you into so much trouble financially.

• You splurge on buying stuff, or on entertainment, and neglect your bills.

• If your income rises, so do your expenses.

• There’s more in your wardrobe than in your bank account.

• You can’t make a start to make a change.

You may think you can’t change, but you can as long as you firstly realise there is a problem. It’s kind of like being a gambler, smoker, or alcoholic – you want to quit but it’s too hard to know how, or where to start, let alone stick to it.

The secret is to have a plan, some guidance, direction, a helping hand. When it comes to saving, or not spending, it’s easy enough to put a plan in place, but whatever tool you use must break it down for you.

To take control of your money you need to understand the flow of it: Money comes in from . . . and Money goes out to . . .

Your budgeting tool needs to show you what your finances currently look like, what simple options are available to budget, and then how you can easily save money from that budget.

Everyone talks about a “Budget Plan”. I personally call it “Your Spending Plan” because that is what we are trying to control here – your spending.

By creating a Spending Plan you will learn:

• What your expenses are to the dollar

• Know exactly what you have to spend

• How to use your credit card wisely

• And be able to take charge of your money and build financial security.

If you understand how your money flows, and you can learn that, you will see exactly what you are spending, what your expenses are, and how small changes can save you big money.

If you’re still reading this, you obviously know that you need something to help you manage your spending. I’m not saying to stop spending. You just need to be able to manage your money better.

Your Wealth Vault has created a ‘Your Money Sense’ course which guides you step-by-step to create Your Spending Plan which gives you the knowledge and capability to have optimum control over your money.

Spending, which you’ll still do, will take on a whole new light. You’ll be able to do it without the guilt and remorse you currently face.

The course, and creating and managing Your Spending Plan each month, will set you back the cost of 3 cups of coffee each month, but what you will save on your expenses should far outweigh that cost.

If you have ANY concerns about your finances and your spending, you need to visit Your Spending Plan.