Five financial moves to make in your 40s

In your 40s? Here’s what you need to consider to financially get ahead.

Being in your 40s often involves balancing many responsibilities that it becomes easy to neglect your own financial wellbeing. But it’s not too late to secure your future. Here are some tips that may help you financially make the most of your 40s.

1. Create a plan

If you don’t have a financial plan, it’s time to get one. Ensure that it’s based on your needs and priorities. By working with a professional adviser, you may be able to tailor a plan that helps you optimise your ability to save and invest.

2. Grow your savings

Your 40s could be your peak earning years, so it may be a good idea to ramp up your savings and funnel some of your income into your superannuation or investment accounts. But be sure to do your homework and consult with a professional financial adviser about your options.

3. Give your super a health check

A quick super health check may help you optimise your retirement savings. For example, by choosing a different investment option or type of risk, you may be able to earn better returns on your super. If you have multiple funds, consolidating your accounts may help you save on fees. Again, seek advice from a professional adviser before acting.

4. Avoid lifestyle creep

People generally have a tendency to inflate their standard of living as they earn more and can afford more things, such as a better car or house. While it’s only natural to want the finer things in life, you’ll likely end up with little to no financial gain if your spending rises as quickly as your income. Try stick to your long-term financial goals and remember the big picture.

5. Consider investing more

Your 40s may be a good time to invest more – or diversify your investments – to help you grow your long-term savings. But keep in mind that it’s important to choose instruments that suit your risk appetite and time horizon. Developing a strategy with your financial adviser might make it easier achieve the return required to reach your financial goals.

Get in touch with Dev Sarker today on 1300 71 71 36 and start planning!

We all like a good cost saving tip, even if it is something we already know, it never hurts to revisit some top tips and take a look at our current situation to see if there are savings to be made.

Any little savings we make throughout the year can be diverted to a bigger savings pool such as an investment portfolio or term deposit to help build wealth over time.

Check your super

If you are not completely aware of what you have in your super fund and how it is performing now is the time to do a quick investigation. Having one fund, instead of multiple funds may save you on fees. Being with a top performing fund rather than a default fund could mean a higher return on your investment, which really adds up over time. Making sure you are only paying for what you need is important, if you are paying for insurance when you have a separate insurance policy this could be an expense you get rid of. However, there is not a one size fits all approach, which is why tailored financial advice could help to find a super solution that suits your individual circumstances.

Salary sacrifice

This is a good way to reduce your taxable income and boost your super. Some of your pay is diverted to your super fund, hence reducing your taxable income, and this money is taxed within the super fund at only 15%. The other benefit of course is that it boosts your super fund and with the power of compound interest over time you can set yourself up for a nice retirement lifestyle.

Utility costs

Reviewing your utility costs each year can be a great way to make little savings add up. By reviewing the contracts you are on, asking the provider for a better deal or getting onto a pay-on-time contract that offers a discount are simple ways you can save on utilities. Consider ways you can be smarter with your utilities at home – buy energy efficient appliances, turn of lights when you are not using them, take shorter showers, install a water tank, be conscious of your use of utilities.

Consumption

Whilst you don’t want to deny yourself too many little luxuries or conveniences, looking at your levels of consumption could expose some cost savings. Consider walking or taking public transport rather than driving everywhere, only buy what you need at the grocery store rather than stockpiling, reduce the number of times you eat out or buy coffees by one less a week, don’t rotate your wardrobe items until you have worn out existing items, take advantage of free activities in your local area such as the library, beach, bushwalks which will connect you with the community and save money on entertainment.

A professional financial adviser can help you with cash flow and budgeting and then help you divert your savings into a vehicle that will start making you some money. Get in touch with Dev Sarker today on 1300 71 71 36.

There is a lot to keep track of when running a small business, including your finances. They can make or break your business, so here are some pointers to help you keep them in check.

Don’t lose out

Ensure you are taking advantage of recent tax and regulatory changes. Businesses with turnover of less than $25 million are eligible for the lower 27.5 per cent company tax rate from the 2017–18 financial year.

In addition, if your turnover is less than $10 million, you are eligible for the $20,000 instant asset write-off threshold. The government extended the deadline for eligible businesses to 30 June 2018. This means that if you buy an asset for less than $20,000, you can claim an immediate deduction of the portion of the asset you use for business purposes in your tax return. But you must use the asset, or install it ready for use, in the financial year in which you are claiming it.

If you are seeking to raise equity, you could benefit from a new crowd-sourced equity funding regime that reduces the costs and regulatory requirements for public fundraising.

Brush up on the basics

Sound budgeting is important to ensure your business stays on track. Have a clear understanding of your income streams and expenses – and keep a close eye on your cash flow. It doesn’t hurt to overestimate expenses, and it is wise to have an emergency fund in case something goes wrong.

Regularly review your budget as your business and the market evolve.

Remember that cash flow is the fuel that keeps a business running smoothly, and you need to keep a constant watch. If you have surplus funds, explore options to make them work for you.

Get help with bookkeeping

You might save money by doing your own bookkeeping, but if you aren’t good at it or you put it off because you are too busy, it can hurt your business. If you can afford it, hire a bookkeeper or accountant to dissect your numbers, pay your bills, help you calculate your deductions, organise your cash flow and, of course, ensure your records are in order.

Also, consider how new technologies and apps could help. For instance, cloud accounting solutions could provide real-time insights into your finances while also saving you time.

Be proactive

Whether you need goods or services for your business, don’t be afraid to try to negotiate better terms with your suppliers. If you are unhappy, shop around.

Also, encourage your clients to pay as quickly as possible. Send your invoices via email, which is instant, and set clear payment terms.

Most importantly, take time off to work on your business, rather than just working in it.

Get in contact with Dev Sarker today on 1300 71 71 36 and start planning!

Read more

https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Reducing-the-corporate-tax-rate/

https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/$20,000-instant-asset-write-off/

http://asic.gov.au/regulatory-resources/financial-services/crowd-sourced-funding/

Holidays should be a well-deserved break from worry. Here’s how to minimise your stress and have a relaxing time away.

Plan ahead

Doing your research may be one of the best ways to save money on your holiday. Even with the summer holidays just around the corner, it’s not too late to do your homework – and you can always start planning for 2019 as well.

The earlier you start planning and booking, the more money you can save. Thinking ahead will allow you to take advantage of promotions throughout the year, and you’ll have more time to save. And when it comes to peak travelling times such as December, typically the earlier you book your flights and accommodation the better your account balance will be.

Create a budget

Whether you choose Bali or the bush, create a budget. Account for expenses such as flights, petrol, accommodation, food and activities, such as visiting museums or a spa.

Research what activities your destination offers and see if you can book early. The more you can book and pay for beforehand, the less you’ll need to worry about overspending. Plus, you may come across free activities to add to your experience.

Start saving

When you’ve worked out how much you will need for your holiday, start saving. Even putting a small amount aside each week can add up, so you could enjoy some great experiences you may not have thought you could afford. A good tip is to open a high-interest savings account and set up an automatic transfer on your payday.

Hunt for bargains

There are lots of useful websites that compare deals on everything from flights to tours. Check out skyscanner.com.au and groupon.com.au. And don’t worry if you have left things to the last minute – there’s a website for that too: lastminute.com.au.

Just make sure you turn on private browsing when researching online. Some travel sites track users and raise prices on the things you are researching if you return repeatedly.

Take a look at credit card promotions. You may be entitled to a few holiday perks that you’re not aware of, from hotel room upgrades to frequent flyer points and insurance.

Also, follow travel agencies, airlines, hotels and other travel-related companies on social media. You never know when they might post a special deal.

While you’re on holiday…

It can be easy to splurge – you’re on holidays after all. But to avoid spending the new year paying it off, keep track of your finances while you’re away.

Set yourself a daily spending limit – or use a travel app to help you stay on track. If you’re travelling in a group, there are apps that can track how much each person is contributing to shared expenses.

Or if all that’s too much of a buzzkill, transfer the exact amount you’ll need into a bank account just for your holiday. This may help you stay out of your other savings or everyday accounts unless it’s absolutely necessary.

Talk to your adviser

Your adviser may help you create a financial plan tailored to help you achieve the holiday you want. Get in contact with Dev Sarker today on 1300 71 71 36!

It’s an important skill but many people are still not as financially literate as they should be. Here are some ways that may help you improve.

Financial well-being is defined¹ as when a person is able to meet expenses and has some money left over, is in control of their finances and feels financially secure, now and in the future. However, financial decision-making is complex and contextual and often we need help to understand what to do.

The latest Australian Securities and Investments Commission (ASIC) Australian Financial Attitudes and Behaviour Tracker, which monitors financial attitudes and behaviour in adults, showed Australians had some great habits when it comes to their finances but that there were also ways we could improve.

Healthy financial habits

About nine in 10 respondents to the ASIC survey said they kept track of their finances in some way and eight in 10 had a budget². Significantly, 23 per cent said they always stuck to their budget.³

Keeping track of your finances is crucial to strong financial literacy. Here are some quick tips:

• set a budget for your weekly expenses and stick to it
• check your bank and credit card statements regularly
• save something from every pay.

Educate yourself

Staying on top of the latest financial information and learning key concepts may help you understand more about what you need to discuss with an adviser. Generally, there’s a low understanding of key investment concepts when choosing financial products. Fewer than one in three respondents to the ASIC survey understood the risk-return trade-off and only four in 10 understood the principle of diversification in investing.⁴

Do your research

There is a lot of financial information at hand and it’s easy to get overwhelmed and stick with what you know – but committing to researching the latest on finance monthly or checking in with your financial adviser every quarter is all it may take to update your financial knowledge and skills and make better informed decisions.

Think long term

A long-term financial plan may help you see the ‘big picture’ of your finances. However, only about one in four respondents had a long-term financial plan, with 63 per cent monitoring their progress in the past six months.5 If you set a long-term financial plan, you can work towards it every day and even if the goal is just to get out of debt, the satisfaction of reaching it will be worth the effort.

Talk to your adviser

Your adviser may help you achieve a higher level of financial literacy and give you a financial plan that remains in sync with all the changes in your life.

A Financial Adviser could work with you to develop a financial plan that’s specifically tailored to your needs, so get in touch with Dev Sarker today on 1300 71 71 36.

1 www.financialliteracy.gov.au/media/560752/research-unsw-fla-exploringfinancialwellbeingintheaustraliancontext-report-201709.pdf

2 www.financialliteracy.gov.au/research-and-evaluation/financial-attitudes-and-behaviour-tracker

3 www.financialliteracy.gov.au/research-and-evaluation/financial-attitudes-and-behaviour-tracker

4 www.financialliteracy.gov.au/research-and-evaluation/financial-attitudes-and-behaviour-tracker

The urge to donate is strong in Australia, and it’s easy to make it part of your financial plan.

An estimated 14.9 million Australian adults (80.8 per cent of the population) gave $12.5 billion to charities and not-for-profit organisations in 2015–16. 

For many people donating comes as a response to a request from a charity, but if you feel strongly about a cause or providing ongoing help to someone less fortunate, why not budget for it?

As well, many people plan to leave money to charities in their wills and with some extra thought in estate planning, a bequest can be made in a tax-effective way. An example is transferring shares that may have significant capital gains attached to them. These can be transferred to charities that have zero tax status, which will then get the full benefit of the gains.

Regardless of how you give, it’s always important to keep accurate records of your donations to give to your accountant at tax time.

Here are five things to consider before donating.

1. Why giving is important

Giving to the less fortunate is a good thing to encourage from a young age. Certain schools make volunteering with charity organisations part of their programs but even parents can encourage philanthropy through their own actions, showing that it feels good to give.

You can touch the life of another person and affect them in ways you may never know – and it’s a win-win proposition. Giving is good for both the donor and the recipient. There’s nothing wrong with feeling proud of your generosity and using that to spur you on to further acts of kindness. Giving makes the world a better place.

2. Do you know what the charity does?

It’s an obvious question, but at the very least the charity’s mission and goals should align with what you hope to accomplish with your generous gift. Is the charity doing good works in the areas that concern you? Do you feel strongly about what it is doing with your money? Is it obvious what the charity does, or does it help out behind the scenes?

3. What has the charity achieved?

Most organisations are happy to advertise their successes through videos, photos or testimonials that showcase their work. There also should be plenty of information in their annual reports to help you get a more complete picture.

4. Can you volunteer?

Being charitable often means more than giving a few dollars. It can also mean pitching in and helping, which is a great way of finding information and making connections. Meeting employees and volunteers will help you decide whether the organisation fits your values and goals, and this can make you become more involved in the cause. Plus, you may feel more fulfilled and happier knowing that you are making a difference.

5. How much are you comfortable giving?

Giving circles are becoming popular for people who don’t have a lot to donate. This just means getting a group of 100 or so people together who each contribute perhaps $1,000 to create a pool of $100,000. They donate the lot to one charity to make a big impact.

If you would like to make giving part of your financial plan, your adviser can help you get the most out of your philanthropic efforts.

A financial advisor can work with you to develop a financial plan that’s specifically tailored to your needs.

Get in touch with Dev Sarker on 1300 71 71 36 today and start planning.