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

What Does Your Spending Plan Look Like?

Whether you are starting your financial journey out of Uni, getting your first job, climbing the career ladder, jumping into, or out of a relationship, buying property, or even starting a business, you need to take control of your financial future.

There are a heap of ‘manage your money’ APPs and Software Platforms out there now.

They are a fantastic start for anyone that doesn’t have control over their money. They scrape your bank accounts and show you what you are spending and categorise that spending (however without too much detail), so you roughly know what you are spending your money on. Better to know than not to know.

These Apps aren’t really going to let you get ahead, or save, they just help you to not overspend.

Now if you are really serious about getting on top of your money, you need to be preparing a budget of your cash-flow – where your money comes in from and where it goes out to.

But no-one wants to create a budget. That’s way too hard. Unless . . .

Your Spending Plan from Your Money Sense is a budget planning tool, stepping further into managing your spending categories than the account scraping APPs, in order to save you real money, and put more in your pocket, and even get you saving for those bigger purchases or life-event needs.

It’s a step-by-step module course showing you how to gather, categorise and act on your expenses and make real savings.

Your Spending Plan is not an automated scraping tool, like the multitude of APPs out there, as the information needs to be accurate and detailed. I won’t sugar-coat it, there is manual entry required to get it started so you will need to gather your bills and expenses together. One of the great things about the Your Money Sense course is that it guides you through each step so you know what to do and have plenty of time to do it.

Once your money flow is categorised you can model your expenses to see what a slight adjustment can do to affect your savings in the short, mid or long term.

Best created on a desktop, the proprietary smart dashboard shows you what your ideal target expenses should be and once you have made some realistic changes, what your expenses target looks like.

Your Spending Plan is a living breathing document that you can, and will want to, adjust every month, if not more regularly.

If you really want to get on top of your money – control it rather than letting it control you – then you should use Your Spending Plan. It should end up saving you considerably more than the $14.99 it costs to use each month.

LEARN MORE

Financial Security? All You Need Is 4 Buckets

If you want to build or maintain a healthy financial life, budgeting should be your fundamental starting point. 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?

There is and it’s not that hard to get started. It starts with categorising your monthly spending into four buckets:

BUCKET ONE Fixed costs. These are bills that don’t fluctuate much and remain pretty constant each week or month, or whatever period they are relevant to: things like rent or mortgage, a phone bill or your car payment. It also includes essential costs that may vary slightly from month to month, like utility bills such as electricity or water. Although they may vary slightly, you can work out an average for the purpose of this budget. But generally speaking, if you can predict how much an expense will be, it belongs in this category.

BUCKET TWO Financial goals.These include any sort of savings or debt goal you’re trying to work towards every month, whether that’s paying off credit card balances, paying down your student loans, saving for a home or paying into an emergency fund regularly, or topping up your Super on a regular basis.

~ Take the FREE Money Personality Quiz to determine your emotional attachment to money ~

BUCKET THREE Non-monthly expenses.Got a bill that you have to pay at some point every year, but just not every month? This could include your home or car insurance or for that matter, most annual insurances, car registration fees, annual health payments, and even school tuition belongs in this category. Add up what those types of costs total to each year, then divide that total by 12. That should be what you’re setting aside each month to cover those expenses when they come up.

BUCKET FOUR Flexible spending.This category covers all those everyday costs that fluctuate each month. This can include groceries, restaurants, shopping, movies, petrol and pretty much any expense that may vary month to month.

So now that you’ve categorized your costs, how much can you actually flexibly spend each month without blowing your budget? Well, that’s a relatively easy calculation. What is your monthly take-home pay? From that, subtract your total fixed costs, and your financial goal contributions, and those non-monthly expenses you calculated. The amount that’s left over is what’s available to cover your flexible spending – the daily coffees, new shoes, magazines, etc.

If you want to know what your flexible spending is per week just divide your monthly figure by 4.3, and you’ll have your weekly spending number to stick to. So if you work out the above, and stick to it, you won’t be in danger of spending more than you earn.

If you can put your hands on the numbers from your bills, it’s not that hard to work out. And if you can work to a budget each week or month, you’ll certainly be on your way to building a financially secure future. 

If you want some more great advice about securing your financial future start by finding out your emotional attachment to money and how to overcome and manage it by taking the Free Your Money Personality Quiz.

10 Things To Do To Change Your Life Forever

We are surrounded by change, and the more you resist, the tougher life gets. Accept change, look at it as an opportunity to try new things, to meet new people, to challenge you.

Change can come upon us by way of unexpected events or by choice. It’s inevitable so grab it with two hands and see where it takes you.

1  Be Happy

What makes you happy? Really, happy. Is it a person, is it an activity? Think about that true happiness and find ways to get involved and follow through to get more of that happiness. Without true happiness you will go through life wondering what could have been.

2  Create a Dream Board

Some people think it’s corny, some swear by them. Cut out pictures of things you want, and things you want to achieve, and stick them on a big sheet of paper, or a small one if you aren’t making it public. It’s a visual reminder of what make you happy and what to strive for. If you don’t want to make it publically visible, keep it in a draw that you use frequently – that way it’s out of sight but a constant reminder to you of what you want to change in your life.

3  Set Goals To Achieve Your Dreams

Now that you have worked out what your dreams are on your dream board: Holiday, better job, nicer car, get married, have children, retire, etc etc – you need to take action to put these goals in place. Set up short, medium, and long term goals. And then act on them, and that is what will make it happen. If they all don’t turn out, keep at it, or adjust your goals.

4  Let Go Of Your Regrets

Don’t hold back and don’t let anything hold you back. Regrets and negative feelings of what could have been have a tendency to be internalized, upsetting the balance of your gut and brain, and can lead to sickness. Be positive, move forward – history is history.

5  Do Something Out Of Your Bubble

Unless you try something new, out of your comfort zone, you’re never going to give anything a go. You’ll be living in your same old bubble, week in week out. It doesn’t have to be bungy jumping, but something that you’ve thought about but never had the gumption to go and try: make a speech in front of people; start walking to lose weight; go out on a girls night out now and then. It can be anything you don’t do now. Make a change to try something new.

6  Start Living A Well Balanced Life

You need your body and mind to be working together. Unless you look after your body, your mind won’t be clear. Exercise is the best way to clear your head and gain a positive attitude. It’s amazing what you start thinking about if you go for a run, or even a walk,: it’s not the negative stuff, it’s what you need to do, the positive things. Make a change and try it.

7  Face Your Fears

It’s easy to brush off our fears in the hope that they will go away and we won’t have to do anything about them. Your fears are only thoughts on your mind, they’re not real, but they manifest over time and then we believe them to be real. We need to take control of these fears – mind over matter – and not let them control us. Have positive thoughts and move forward.

8  Accept Yourself

You are who you are. You are a combination of genetics and environment. Everyone has something that they would like to change about themselves – if they are truthful and think hard about it. The only person that can make that change is you. A negative attitude to your, let’s call them ‘self-faults’ is only going to make them worse. You need to be positive and want to change, and then you will.

9  Live In The Moment

Don’t dwell on yesterday; don’t be negative if you have a bad event or thought. Negativity only breeds negativity. Be positive and live in the moment, live for what will be, not what has been. The grass may be greener on the other side of the fence, but the only way you will know is if you make the effort to jump the fence. If it’s not greener when you get there, you’ve learned a good lesson and can keep moving forward anyway.

10 Show Gratitude

If you are grateful for what you have and what you can change, then good things will happen and you will see your life change. Your changes don’t need to be monumental, they may be small, but they are still changes, and hopefully changes for the better.

Change you attitude to change.

About the author: Karen Vickers is a Financial Adviser who wants people to learn how to take control of their money. You can also change your financial habits. A good start to understanding the financial habit change process is by downloading our Free Your Money Sense e-Book http://yourwealthvault.com.au/: “6-steps to Financial Security”.

10 Things To Do To Change Your Life Forever

We are surrounded by change, and the more you resist, the tougher life gets. Accept change, look at it as an opportunity to try new things, to meet new people, to challenge you.

Change can come upon us by way of unexpected events or by choice. It’s inevitable so grab it with two hands and see where it takes you.

1  Be Happy

What makes you happy? Really, happy. Is it a person, is it an activity? Think about that true happiness and find ways to get involved and follow through to get more of that happiness. Without true happiness you will go through life wondering what could have been.

2  Create a Dream Board

Some people think it’s corny, some swear by them. Cut out pictures of things you want, and things you want to achieve, and stick them on a big sheet of paper, or a small one if you aren’t making it public. It’s a visual reminder of what make you happy and what to strive for. If you don’t want to make it publically visible, keep it in a draw that you use frequently – that way it’s out of sight but a constant reminder to you of what you want to change in your life.

3  Set Goals To Achieve Your Dreams

Now that you have worked out what your dreams are on your dream board: Holiday, better job, nicer car, get married, have children, retire, etc etc – you need to take action to put these goals in place. Set up short, medium, and long term goals. And then act on them, and that is what will make it happen. If they all don’t turn out, keep at it, or adjust your goals.

4  Let Go Of Your Regrets

Don’t hold back and don’t let anything hold you back. Regrets and negative feelings of what could have been have a tendency to be internalized, upsetting the balance of your gut and brain, and can lead to sickness. Be positive, move forward – history is history.

5  Do Something Out Of Your Bubble

Unless you try something new, out of your comfort zone, you’re never going to give anything a go. You’ll be living in your same old bubble, week in week out. It doesn’t have to be bungy jumping, but something that you’ve thought about but never had the gumption to go and try: make a speech in front of people; start walking to lose weight; go out on a girls night out now and then. It can be anything you don’t do now. Make a change to try something new.

6  Start Living A Well Balanced Life

You need your body and mind to be working together. Unless you look after your body, your mind won’t be clear. Exercise is the best way to clear your head and gain a positive attitude. It’s amazing what you start thinking about if you go for a run, or even a walk,: it’s not the negative stuff, it’s what you need to do, the positive things. Make a change and try it.

7  Face Your Fears

It’s easy to brush off our fears in the hope that they will go away and we won’t have to do anything about them. Your fears are only thoughts on your mind, they’re not real, but they manifest over time and then we believe them to be real. We need to take control of these fears – mind over matter – and not let them control us. Have positive thoughts and move forward.

8  Accept Yourself

You are who you are. You are a combination of genetics and environment. Everyone has something that they would like to change about themselves – if they are truthful and think hard about it. The only person that can make that change is you. A negative attitude to your, let’s call them ‘self-faults’ is only going to make them worse. You need to be positive and want to change, and then you will.

9  Live In The Moment

Don’t dwell on yesterday; don’t be negative if you have a bad event or thought. Negativity only breeds negativity. Be positive and live in the moment, live for what will be, not what has been. The grass may be greener on the other side of the fence, but the only way you will know is if you make the effort to jump the fence. If it’s not greener when you get there, you’ve learned a good lesson and can keep moving forward anyway.

10 Show Gratitude

If you are grateful for what you have and what you can change, then good things will happen and you will see your life change. Your changes don’t need to be monumental, they may be small, but they are still changes, and hopefully changes for the better.

Change you attitude to change.

About the author: Karen Vickers is a Financial Adviser who wants people to learn how to take control of their money. You can also change your financial habits. A good start to understanding the financial habit change process is by downloading our Free Your Money Sense e-Book http://yourwealthvault.com.au/: “6-steps to Financial Security”.

If you change this habit you’ll quickly improve your financial situation?

Change your habit; the habit of spending. Firstly you need to learn how to save on small things. Saving, spending, they go hand in hand. This is probably the fastest and easiest way to improve your financial situation. We’re not always fully aware about the money we spend on certain daily habits. Habits are a very strange thing. They just happen time and time again, and generally subconsciously.  

If you put a value on each time you ‘do’ a habit it ends up costing a small fortune. If you go to the same coffee shop day in and day out: that’s a habit. Drinking coffee in a local coffee shop on a daily basis drains your monthly budget. How can you break that habit? Well that’s not for us to say, but we’ll give it a go anyway. We know you need your coffee, but just consider how it gets into the cup. Maybe pick up a home coffee machine, or get one at work, they really do produce great coffee these days and cost cents on the dollar. Try taking a bottle of water with you so you might sip on that rather than get a coffee for the sake of it.

How much electric energy or water are you using each day? It’s not one of those free resources that are just there like air, it costs money. If the weather outside is not very hot, you don’t need to use the air conditioning and vice versa, if it is not very cold you can turn off or set the heating at a lower temperature. If no one is watching TV or if no one is working on the computer, turn them off, or power them down. Make sure that the taps are turned to the end and don’t let the water run unnecessarily. Have a 10 minute shower instead of a 30 minute shower. It all costs money and if you adjust the way you do or use these things, they’ll end up saving you money.

This has nothing to do with skimping – it’s just a case of thinking what it is costing you unnecessarily, and then adjust your habit. By cutting down on some of those habits, you’ll have reasonable savings by the end of a few months.

No-one is saying “don’t do that anymore” but if you’re honest with yourself you know there are many, many, more “habits” that you could adjust. A slight adjustment will save you a lot of money over the course of a month.

So do you know what the fastest way to improve your financial situation is yet? Habit: Change: Adjustment: Realigning; any of those will cover it.

What habit do you need to change?

A good start to understanding the habit change process is by downloading our Free Your Money Sense e-Book: “6-steps to Financial Security”.

The Association of Financial Advisers (AFA) and TAL have announced the semi-finalists in the 2016 AFA Female Excellence in Advice Award.

Developed in 2011 as a joint initiative by the AFA and TAL, the Award recognises and showcases the talents and contributions of women in financial advice to their clients, community and profession. The Award criteria includes assessment of the candidates’ contributions to financial literacy in the community and/or campaigns targeted specifically at helping female clients take control of their financial lives.

AFA CEO, Brad Fox, said the Award is a reflection of the AFA’s commitment to continue to generate and encourage positive change in the financial advice sector, with women constantly being encouraged to enter the advice profession.

“The AFA is immensely proud of this Award, the calibre of entrants it attracts, and ultimately the finalists and in particular the winner. Our profession is going through significant change, and to see more women advisers coming through providing great advice to Australians is very important from a diversity perspective.”

When asked about her business and contribution to the financial services industry, Karen Vickers proudly explained, “My primary business is ARC Wealth, a financial advisory service to an established core of clients. From the strength and security of ARC Wealth I am building an online platform, Your Wealth Vault, which educates and guides people through a series of educational courses called Your Money Sense. These courses are aimed at guiding individuals to take ownership of their financial security, through courses of basic understanding of their money and then onto more sophisticated courses guiding them to their own financial management and wealth building.”

Your Wealth Vault courses are designed to help Australians understand how their money works and what they can put in place to manage their finances whether that is for day to day survival, or wealth creation.

The finalists for the AFA Female Excellence in Advice Award winner will be announced at the AFA National Adviser Conference in Canberra from 5-7 October.

The average cost of your pet per year is . . .

They’re our four legged-friends, our furry family members and our instant mood-boosters after a particularly stressful day. We love our pets—so much that most Australians consider their cat or dog to be another member of the family. And they can be pretty expensive family members, at that.

A dog’s life certainly isn’t cheap anymore, with Australian families spending more than $25,000 on their pet dog over its life-time, according to a report by Bankwest. Apparently the average Aussie family can end up spending more than $25,000 over the life of their beloved friend.

Over the average lifespan of a dog, roughly ten years, pet food and other gourmet delights can gobble up the bulk of a doggies annual food bill at about $1200. Then there are veterinary costs, and additional dog care such as grooming, dog walking, dietician and trainer costs each year.

It certainly isn’t any surprise to learn that half of Aussie pet owners consider their pet to be equally important as their kids. If you are prepared to outlay more than $25k for your dog then you’d probably love him.

Most pet owners think the cost of a pet dog is a small price to pay in return for what a dog provides its family. Their love for dogs, the companionship provided by a ‘man’s best friend’ and the peace of mind and security a pet canine creates are the main reasons for owning a dog.

Interesting facts about our pets:

·        NSW is the state that spends the most on pets. WA spends the least.

·        25 per cent of Aussie dog owners pay a dog groomer to maintain their dogs’ appearance.

·        50 per cent of Aussie dog owners buy their dog gifts for special occasions e.g. Birthday, Christmas etc.

·        80 per cent of Aussie dog owners have a dog for companionship

·        Over 30 per cent of dog owners have a dog to encourage them to exercise.

·        5 per cent of people have their pets in their will.

·        8 per cent of people take their pet with them on holiday

Yes we love our pets – that’s a given. But these costs can cause some major strains on your household budget. If you are looking to bring a pet into your household, planning should be a top priority. Knowing the costs associated with your pet and being prepared for unexpected and emergency costs will help diminish the financial burden of your new furry friend.

Owners can help avoid future financial mishap by doing their homework before bringing home a new cat or dog. Just as you should have a personal, or business budget in place, your pets should be a factor in that budget.

If you still need to “get-around-to” starting a budget you can start here by downloading our Free Your Money Sense e-Book: “6-steps to Financial Security”.

Did you know Australia is a nation of dog rather than cat owners with 68 per cent of pet owners having a dog and 32% having a cat. What are you?