Christmas is a time to be savvy!

The November and December months are a time when our wallets are an endless money pit, credit cards are in high demand as we try to keep up with the Joneses. The next few months of unconscious spending can set us up with a significant financial burden well into the New Year.

What can you do to avoid the Christmas expense blues?

1. Create a list

Get organised and make a list of all the people you need to buy presents for. Creating a list allows you to jot down some ideas and start looking online where you can find a bargain. Purchasing multiple gifts from one retail site will reduce your cost of postage.

2. Create a budget

This could be for each gift or the total amount you want to spend on all the gifts you want to buy. A budget will prevent you from buying gifts you don’t need or spending more than you want to.

3. Gift an experience

The manufacturing of cheap, quickly disposable trends are cluttering our lives and sending us broke with a mirage of happiness. Experiencing nature or organising an adventure will create a memorable journey that will last a lifetime.

These simple tips and suggestions will help you avoid overspending, which you’ll reap rewards for well into the New Year.

Please note this article only provides general advice and has not taken your personal or financial circumstances into consideration. If you would like more tailored financial advice, please contact us today. One of our advisers would be delighted to speak to you.

Recently, I did something I haven’t done in 40 years. I went back to my old high school – Mazenod College in Mulgrave, Melbourne. I’d received an invitation from the ‘Mazenod Old Collegians Association’ to join a tour of the school. For the most part, I had fond memories of my years at Mazenod College and decided it was about time I went back and have a look at how it had changed.

And boy had it changed! I was truly amazed at the range of facilities now in place at the school. An enormous indoor basketball stadium stood on the spot where there once stood a yellow portable classroom which our class occupied for a couple of dreary months during the winter of 1974. Gone was the uneven, muddy footy field, replaced by immaculate looking synthetic grass. Apparently it ‘only cost $1 million’…gulp! There was a state of the art library, including a 300 seat theatre complex. There was even a building dedicated to providing students with cooking classes, which looked like a set from MasterChef.

I asked, Sean, our tour guide (an ‘old boy’ himself) whether the curriculum itself had also changed. Sean proceeded to rattle off a range of subjects. ’Is Financial Planning 101 on the curriculum, Sean?’, I asked. Sean looked at me, paused for a few seconds and replied, ‘well no, not as such, but we do offer Accounting’.

That was my cue. I stepped onto my ‘soapbox’ and shared with him my experience of 20 years in financial planning. That many, many people are essentially ‘illiterate’ when it comes to their own financial planning. They leave school with a trade or a profession, but not the first clue about managing their own money and taking responsibility for achieving their financial goals. And the problem can be sourced back to their education. Many school curriculums include worthwhile and useful subjects (and quite a few useless ones). However, to my mind, we’re providing our children with a disservice if we don’t provide them with the knowledge and tools to manage their own money. Many people, after they’ve left school, recognise the gap and seek to redress it. And some of those find their way to financial planners, like The Investment Collective where the focus if not only on establishing a personalised financial plan and reviewing it on a regular basis but bringing people up ‘the learning curve’ in their understanding of personal finance and investments

Sean was pretty interested in all of this and asked me whether I’d be interested in speaking to some of the students on Financial Planning 101. ‘Absolutely’ I replied.

If you would like to learn more about personal financial planning or any of our other services, please contact us today.

With the holiday season nearly upon us, are you taking care of your business?

The holidays can be a very busy, stressful time for both employers and employees, but happy employees can ease the stress for employers. As employees ourselves, we can state unequivocally that we like to plan for our holiday season. Some forward planning can ease the situation for all involved.

Whilst handling the payroll functions for companies, the main questions we have been asked at this time of year are:

• What will be the closure dates?
• How much leave will I need available?
• When will the pay runs be conducted during this period?
• Who, if anyone, will be working/on call?

For casual employees, the leave option is not available, so let them know their rosters for this period as far in advance as possible to allow time for them to create a budget.

Let employees know if they are on the backup list to be called in if someone is unavailable to work during this period. This helps relieve confusion about who is required to work.

By letting your employees know of the above-mentioned information well in advance, they can plan and therefore be prepared, less stressed and ultimately more productive. This can help make the holiday season a more enjoyable time for everyone.

Cheers,

The Bookkeeping Team

Please note that the above is provided as general advice and has not taken your personal, financial or business circumstances into consideration. If you would like more tailored advice, please contact us today. One of our advisers or bookkeepers would be delighted to

Aged Care Who Cares? by Rachel Lane & Noel Whittaker

★★★★★

Book Review by Jodie Stewart

Plot

With the growth of the ageing population, aged care advice is needed today more than ever. The complexity surrounding aged care means it can sometimes be overwhelming and confusing for you and your loved ones. Aged Care Who Cares? is a guide for people looking to secure the best possible outcome for aged care. The information contained in the book helps you choose an option that not only meets your financial needs and objectives but also considers your emotional wellbeing.

Review

Aged Care Who Cares? is broken up into 4 different sections:

Care at Home, Retirement Communities, Residential Aged Care and Funding your Care.

Given around 75% of care provided is done so at home, I’ve decided to concentrate this review on Section 1, Care at Home.

Home Care Packages:

I found this to be the most interesting topic which probably stems from my own experience with aged care. My grandmother (70) still works full time and is only just beginning to consider retirement now. At present, she has no interest in moving into a retirement village or aged care facility and wants to stay in the family home as long as possible. Lane and Whittaker discuss the different types of home care available and the merit of each. These include; Home Care Packages (HCP), Commonwealth Home Support Programme (CHSP) Veterans’ Home Care (VHC) / Community Nursing and Private Care.

My grandmother’s doctor recently referred her for an Aged Care Assessment Team (ACAT) which is key to accessing most government-funded aged care services. The purpose of an ACAT assessment is to determine the level of care you need. The assessor will speak to you about your day to day activities, the things you are comfortable doing yourself and things you may need assistance with. ACAT assessments remain valid indefinitely unless a time restriction has been applied to it. As with any government service, there is a waiting period to receive an ACAT assessment. If you are lucky, you will be assessed relatively quickly; however, if it is during the season of Aged Care (typically November to April) the wait period can be quite extensive. During these months, family come to visit. They see the change or detrition in their loved ones and take action to get them assistance. This then creates a surge in the need for ACAT assessments and the waiting begins.

As highlighted by Lane and Whittaker, there are four levels of Home Care Packages. Level 1 offers support to people with basic care needs, while level 4 offers support to people with high care needs. Although my dear nan has been assessed and ACAT have determined her level of care required, she now needs to join the National Prioritisation Queue with over 100,000 other Australians who need home care. The queue basically works on a ‘get what you’re given’ basis. You can opt for a lower level package while waiting for your approved package level. That is, if you are assessed to be a Level 4, which is the highest Level of Care and a Level 1 Care Package is available next, you will be assigned a Level 1 Package. Think of it like having a broken leg in the emergency department. You wait and wait to receive some relief but all the nurse can offer you is a Panadol. You take it because that is all that is on offer. You still have a broken leg and you still aren’t getting the care you need. That is the unfortunate position 40,000 consumers are in.

Granny Flats:

I was surprised to learn that granny flat arrangements aren’t as straightforward as people think. What springs to mind is a small flat or self-contained unit built on your children’s property but that isn’t always the case. In the eyes of Centrelink, a granny flat interest or right is where you pay for the right to live in a specific home for life. You can’t be a legal owner of that home and it is not part of your estate when you die. So, a granny flat arrangement is any kind of dwelling such as a room or living area in an existing home, not just those typically referred to as granny flats.

Lane and Whittaker touch on a few key considerations when entering into a granny flat arrangement.

Generally speaking, the amount you pay for a granny flat right or life interest should be market value. This payment can be the exchange of assets, money or both assets and money.

For example, you could transfer:

• Ownership of your home but keep a lifelong right to live there or in another private property
• Assets, including money, in return for a lifelong right to live in a home

Centrelink has deemed that if you pay less than $207,000 under your granny flat arrangement then you are not a homeowner. You will receive rent assistance, but the granny flat will count towards your assets under the asset test. If you paid more than $207,000 you are a homeowner, no rent assistance is afforded but the asset is exempt from asset tests.

It is important to ensure that you do not pay too much or too little when entering into a granny flat arrangement. If you pay too much, you can invoke Centrelink’s gifting rules where you give away an asset without getting something of at least equal value in return. The extra amount you have paid for the granny flat then becomes a deprived asset which impacts on your entitlements.

Recommendation

Aged care can be very tricky to navigate but Lane and Whittaker have done well to simplify it as much as possible. There are a number of options available to retirees, each with their own complexities. I recommend this book for those who wish to explore Aged Care options for themselves or loved ones.

Please note that this article provides general advice and has not taken into consideration your personal or financial circumstances. If you would like more tailored advice, please contact us today. One of our advisers would be delighted to speak to you.