Ok so the heading sounds great, and who wouldn’t want more cash?  With rising interest rates and general market uncertainty, we all want a little extra in our bank balance.

Let’s have a look at some options out there that may just provide an added windfall.

1. Lost Super

Remember that job you had once packing shelves at the supermarket, or the paper delivery?  Ever wondered where the super went?  Changed jobs and never really looked at the paperwork you signed?  Changed address or email and lost contact with an old fund?  Chances are you may have some lost super out there and it is worth checking.

Good news – the money is still yours, you just need to claim it.  It will either be with the ATO or with the original super fund.

The search is relatively simple.

• Go to MyGov website and log in
• Ensure your account is linked to the ATO
• Select ‘Super’.

This will show detail of your super accounts and consolidate them into one fund if that is your preference.  Not everyone wants to do this – consider whether there is insurance held in super you require, which account to consolidate to and if there are any advantages to a particular fund.

You can also call or fill in a form to look for super. More detail can be found at https://www.ato.gov.au/forms/searching-for-lost-super/.

Sorry to say, that unless you meet a condition of release, this isn’t going to benefit you until retirement.

2. Unwanted items

One option for an immediate cash injection is to sell some unwanted items from around the house.  Remember those presents from last year, that unwanted home décor, the kid’s bike they have outgrown, computer games that just aren’t cool anymore?  Clothes can definitely raise a few dollars from a clean of the closet. With a multitude of options to sell online, this can be an excellent way to raise money and buy something you want now.

Depending on the online platform used, take care with scams, consider insurance for expensive items sent out and consider where is best for pick up / drop off of items.

Yesterday’s goods are today’s treasures!

3. Grow your own plants

So the kids are now on holiday and looking for something to do. Why not put them to work on making a veggie garden?  This can be a fun experience for the kids and yourself.

Take the kids to your local garden centre and let them choose some of their favourite veggies and herbs. The enjoyment of eating your own carrots or cherry tomatoes combined with a few extra dollars off the grocery bill.  Planting a citrus tree will also pay off over time.

4. Airtasker / Uber and part-time roles

Part-time roles can help fill a gap at this time of year and whilst time with the family is important, a few hours spent on an odd job could just get the ultimate present for someone.

Airtasker is an online site where people list odd jobs they want done. If you can assemble flat packs or trampolines, this may be for you. Have a look on the site for typical prices and know what you are worth before you sign up for a job.

Uber will allow you the flexibility to choose your hours and your trips. You don’t always get to choose who the passenger is, but if you are going from point A to point B anyway and can get some money from someone needing a lift, this may be perfect.

These ideas may not be for you and perhaps controlling the budget in other areas is a better way to save. With rising living costs and loan repayments, planning on how to manage your finances is critical. If you need some help, talk to one of our financial advisers.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

Many Australians hold some form of personal insurance, with many of us choosing to hold insurance through our superannuation provider. However, few truly understand the cover, how it works and if it is actually suitable to our personal needs.

A few common misunderstandings we encounter:

Group Insurance

Group insurance covers a group of people, most commonly members of a particular super fund.

Most industry super providers will offer default (group) insurance. This insurance has not been underwritten by an insurance provider, tends to be lower quality with the benefit amount decreasing as you get older, when the likelihood of a claim becomes higher.

Most industry super funds will allow you to fix your cover or apply for higher levels of cover through group insurers (subject to underwriting).

Retail Insurance

An alternative to group insurance is retail insurance, with more industry super funds providing the option to fund these retail policies.

Retail insurance policies are underwritten by the insurance provider before cover is offered. This generally results in the insured gaining higher quality cover and generally a higher chance of a successful claim as the insurance company will note any exclusions from cover up-front.

Linked Policies

This option allows you to combine cover.  The most common situation is linking total and permanent disability (TPD) cover (life or trauma) with TPD. Linking policies reduces the premium more than if you were to hold the cover separately. However, many people do not realise if you claim on one (i.e. TPD), this amount will then reduce from the life benefit available, unless you have a buyback or reinstatement option on your cover.  This option tends not to be offered with industry super insurance.

Income Protection

Many people understand they have income protection but wait periods before a claim can be made, these vary from 14 days to two years. It is important to know what your wait period for a claim is to ensure you can fund your living expenses whilst being unable to work. In addition, benefit periods typically vary from two years to age 65, this is the length of time you are able to be covered/receive income payments from the insurer.

We like to think we would recover within two years but it is rather common to be incapacitated for longer than two years, for example, mental health or spinal injuries, extended benefit periods should always be considered when applying for cover.

Premium Types

Stepped: these premiums start out lower but the base premium increases as you get older. Generally, this type of premium is good for younger applicants working on building wealth or clients who only need insurance for a shorter period of time.

Level: these premiums start out higher but as you age, they increase slower generally with CPI. If you think you need insurance up to retirement at age 65, this type of premium will work out more cost-effective for the life of the policy.

Insurance benefit amount

It is important to ensure you have the right level of cover to suit your needs such as clearing debt, maintaining your lifestyle and funding medical expenses.  You may have other items of importance to cover such as funding children’s education.

At The Investment Collective, we take a comprehensive approach to providing financial advice. An important part of that advice is insurance and ensuring you have the right cover in place to suit your needs and complement the achievement of your goals and objectives.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

We plan for many aspects of our lives, but few people plan for future aged care needs. Now is the time to change that trend.

The truth is, most of us avoid thinking about our own future aged care needs, delaying our decisions until perhaps they are taken out of our hands.

Life expectancies are increasing. This means not only might we expect to live longer than our parents and grandparents, but we might also expect longer and more active retirements. However, this does not remove the possibility that we may need help with daily living and medical care in our older years.

If we reach a point when we are increasingly vulnerable, we do not want to be left unprepared.

Planning creates peace of mind.

Planning for our retirement, as we dream of travel, cruise ships and caravans as well as more time playing with the grandkids, can be quite enjoyable. Perhaps that’s why we put off planning for our aged care needs – it’s not as much fun to think ahead to a time when we might need more support.

But with the right advice, planning ahead offers many benefits and can be easier than you think. Benefits may include:

• Peace of mind for you and your family
• Taking pressure off family when a crisis occurs
• Allowing you to have a voice, and
• Avoiding costly mistakes.

Creating a plan that will work for you includes consideration for what sort of life you want to live and what makes a good life for you. This should take into account options for where you could live but also how to continue your interests and stay connected to family, friends and your community. Understanding the costs and planning your finances is a key component of making the plan work effectively.

Don’t leave it too late!

Don’t leave your aged care planning too late. We have helped many of our clients to start the planning process and often discuss when and how to bring your family into this process.

If you are ready to start the conversation, contact our Head of Financial Planning, Robert Syben at robert_syben@investmentcollective.com.au and let us work with you to create a plan for all of your retirement needs.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

If you said, “they are all difficult to predict,” you would be right. Although, of all three, Molly is the easiest to predict. For example, when my wife goes to the kitchen for any reason, Molly expects to be fed. It took Molly only a few short weeks to train Kathy as her slave, but Molly’s persistence paid off.

But what of the human brain and the stock markets? It is known that we only use 10 percent of our brains, but that is not true. The human brain is complex, with more neuronal connections than there are stars in the universe. Let’s think of the brain like a footy team. Using AFL as an example, we might field a side with 24 players. Of those, two will be on the bench ready to come on at a moment’s notice. The remaining 22 players, all on the field, do what their positions require. But they will not all be busy at the one time.

Our brain is much like an AFL team. We use all of our brain; just not all at once. That is a good thing because (a) it would be exhausting (the brain uses about 20 percent of our energy) – and (b) we would be in constant conflict with ourselves. Instead, our brain orchestrates a merry opera in which we ramp things up and tamp things down as our circumstances require. For example, when the emotional part of our brain (the limbic system) is in play, the pre-frontal cortex (the thinking, reasoning, decision-making and inhibitory parts of our brain) damps down with the effect. When we are upset, stressed, anxious or excited, we are not doing our best thinking. It’s much like the star forward going off the ground right at the time when kicking a goal is crucial.

You might think this is an interesting lesson on the brain (or not), but what does it have to do with investment markets? Investment markets operate in much the same way, although sometimes less predictably. The Buddy Franklin-like full forward may be seen as somewhat of a stalwart, a match-winner, a sure bet, but he is not a machine and, as such, he is subject to the same human frailties as the rest of us. Stock markets can be like that too. They have ups and downs, ebbs and flows and sometimes, even crashes.

In a bear market, the blue-chip resource stock that supposedly could not lose, might stumble, just as Buddy did on Grand Final Day (sorry not sorry to the Swans supporters!), while other stocks hold or make gains. Even bonds, often thought of as a sure kick, have dipped.

So, what happens when we play the game and lose? It is disappointing but it is only ever a moment in an arbitrarily punctuated point in time. It is not the end. There is another day, another season, another chance.

Not often do we think this way, but what happens in the world happens – what one person sees as good, the other sees as harmful. Events are neutral; it is our reaction, strongly shaped by our past experiences, that decide whether it is good or bad. For example, when stock markets take a hit, we may view that negatively particularly if we have a holding. However, what if we want to buy into the market? A dip or tumble could present wonderful opportunities. Understanding where our position falls against our long-term strategy is important as is tamping down our limbic system and ramping up our pre-frontal cortex.

It was once said that the only certainties in life are death and taxes. I would change that to “very little stays the same.” This brings us to the need to be both informed and prepared. This is why, at The Investment Collective, we take the time to understand your circumstances, aspirations and risk appetite. We work with you to effectively balance your portfolio such that when one player stumbles, others can help fill the void. Sometimes, almost an entire team can have a bad game. It happens, players will be traded, others retire, but many will be retained because they are the heart of the team and the heart of the team beats strong.

The market has taken a tumble; the rollercoaster is in motion. We do not know when the ride will end. However, we have an ever-vigilant eye on geo, political, economic and social trends coupled with up-to-date research on the companies within your portfolio. This better positions us, as the coaching team, to steer you to a win at the Grand Final.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

It is almost Christmas, so it is time for the present wishes;

• Lower inflation
• Lower interest rates
• Share market bounce back
• Iceberg lettuce
• Petrol vouchers
• Ability to retire stress free in the future.

We would all like to live in a perfect world, unfortunately, this just does not happen. For those looking at retirement, now may be more concerning than ever. In a world of rising costs, volatility and uncertainty, many people fear if they will have enough money to retire and cease work.

There are plenty of risks we face with retirement which can make us all apprehensive. To restate our adviser Cheng Qian’s article from last October, here are some of the key risks.

Sequencing risk

This is the risk of the market facing a severe and unexpected downturn just before you retire. As a pre-retiree, you may not have the time horizon to wait out a recovery. An example would be a retirement nest egg of $1,000,000 falling to $750,000 just as you are about to retire. At a drawdown of 5 percent, this is a reduction of annual income from $50,000 p.a. to $37,500 p.a. and a big hit to anyone’s retirement.

Lower than expected returns

Retirement portfolios are not designed to shoot the lights out but to generate a sustainable level of return with a focus on capital preservation. However, if returns do not stack up for whatever reason, it will lead to a rapid deterioration of your capital and your savings may not last as long as you designed them to.

Longevity risk

This is the risk of retirees living beyond their savings. With improved health care and higher standards of living, life expectancy is higher than ever. Hence, with all else equal, you are more likely to outlive your retirement savings.

The obvious question is “How much will I need?”

There is no single answer, and every one of us have different expectations of what retirement looks like and as a result, we need to look at what kind of research exists.

A good guide lies with the Association of Superannuation Funds of Australia (ASFA) which publishes a ‘retirement standard’.

ASFA have outlined two different living standards (comfortable and modest). These values are updated quarterly to reflect Consumer Price Index (CPI) increases (which have risen more dramatically in 2022). For both options, they assume the family home is owned outright and that the individual is ‘reasonably healthy’.

• A modest lifestyle is exactly that – a lifestyle higher than solely having the age pension as income but is a basic income for expenditure.
• A comfortable lifestyle includes a few ‘extras’ around holidays, technology, insurances, and general expenses.

The next question is how much?

Again, the standard shows this in two ways – expenses and savings at retirement. Note the savings amount allows for a part or full age pension to also be received.

The standard is therefore suggesting that a couple looking at retirement is really needing to have at an absolute minimum $70,000 (for a $43,250 per annum expenditure target). Everything over this amount will allow a higher level of lifestyle. The question will then shift towards your personal lifestyle requirements to determine your needs.

If there is one thing for certain, it is that uncertainty will always exist, and markets will go up and down. The thought of retirement will always be somewhat of a scary proposition, due to the loss of regular income and security employment provides. There really is no set guarantee and no defined perfect time for retiring. The ability for humans to be flexible in their approach, wants and choices are what enables us to take up the challenge and to make decisions to move our lives into the next phase. A volatile market does not have to be a roadblock and could be the opportunity for change in our lives being sought. Having some basis of comparison for what might be required to fund retirement to what you have now, can be an excellent way to start planning.

Source: ASFA

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

Have you heard the news? Inflation is skyrocketing in Australia and across the globe. Why? Governments have been printing and distributing money like it was going out of fashion for two and a half years (since COVID-19 arrived on the scene). The war in Ukraine and strong consumer demand are all adding to inflationary pressures here and abroad.

Why does inflation happen?

• Cost-push inflation: the cost to produce goods or services increases (higher petrol prices).
• Demand-pull inflation: suppliers cannot meet consumer demand needs when something is popular (prices naturally increase).

Why is inflation bad?

Less purchasing power (your money doesn’t go as far), fewer savings (the more you have to spend, the less you have to save) and loss of goods and services (like everything in life there are always winners (supermarkets, fuel suppliers and funeral parlours) and losers (generally discretionary spending).

Economies across the world are now doing everything they can to reduce inflation before it gets out of control (for some countries it may be too late). The main weapon against inflation is to increase interest rates which is commonly referred to as contractionary monetary policy. This reduces the money supply in the economy and by increasing the cost of credit, it reduces consumer and business spending. Higher interest rates on government securities (treasury bonds, bills and notes) make them more appealing to businesses and investors and it guarantees a rate of return. This, in turn, makes riskier investments like equities less appealing to investors.

The reality is governments have minimal options in the way of reducing inflation. The most common way is contractionary monetary policy (raising interest rates), but the downside is that it could tip the economy into recession. There is usually a lag of three to four months before the impact of interest rate rises is felt through the economy, so at the moment we are only feeling interest rate effects from April this year.

What does inflation mean for your investments?

Generally, higher inflation is usually seen as a negative for stocks because it typically results in:

• Increased costs of raw materials and labour
• Increased borrowing costs
• Earning expectations reduced.

Usually, due to the increased uncertainty of the value of money in the future, all of the above put downward pressure on stock prices.

In times of high inflation, investments in gold and commodities are generally seen as safe havens for investors. Energy and agriculture producers generally fare better in times of high inflation as people will always need to eat.

No doubt the inflationary and interest rate roller coaster will continue for the remainder of 2022 and well into 2023.

If you require assistance in navigating the coming economic environment, contact our experienced team of financial advisers. We can help you identify strategies to help you reach your financial goals and aspirations.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

The pros and cons of a six-member SMSF have been extensively discussed in the financial services industry. One thing we know for sure is that a six-member fund is not for everyone. The majority (more than 93%) of SMSFs in the industry are either single-member SMSFs or two-member SMSFs.

Below are some pros and cons of having a six-member SMSF:

Pros:

• You can have more money (greater purchasing power). This will allow for greater diversification of assets or investment in higher-value assets.
• This could allow your children to invest their super in more substantial investments and achieve economy of scale, especially when their super balance is low.
• Having more members in your super fund will also reduce the cost of managing your family members’ super, i.e., a new SMSF setup cost, ATO levies and other costs, as the fees are spread across more members.
• If your children make regular super contributions, it will be easier to make your pension payments.
• The taxation strategies may be implemented more efficiently.
• Easier to meet Australian Super Fund residence requirements when/if you or your children travel overseas for an extended period of time.

The drawbacks include:

• Lifestyle considerations. Two sets of investment strategies may be required. However, differing investment timelines between the parents and kids may not be a major issue if all members agree on a range of diversified assets.
• Disputes and conflicts between members can make the decision-making and fund administration difficult. Who does what and the rules about the fund’s operation will need to be decided and documented in advance.  The SMSF’s Trust Deed will need to be reviewed and updated to cater to the increase in member numbers.
• Voting rights can be necessary within a six-member SMSF.  The children may outvote their parents, especially when one parent gets old and becomes incapacitated.  Having voting rights based on each member’s balances or any other method may need to be considered.
• Excessive transparency of the parents’ superannuation balances could cause potential financial abuse.
• Possible death benefit disputes. Succession planning and future control of an SMSF become more important with more member SMSFs.
• The forced sale of assets. The SMSF may be required to sell assets to allow for superannuation splitting. Sound planning may be required for situations where children need to move their super benefits to another super fund.

If you are thinking of getting your children into your super fund, a thorough review of your family situation and specialized personal advice are required. Get in contact with our experienced team of advisers so we can help you identify a superannuation strategy that works for you and your retirement goals.

Reference – this article is written in conjunction with Monica Wang @ Moneta Super

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

Although Oreo has his own letterbox next door, he likes nothing more than watching the world from ours. Perhaps it is a better vantage point; perhaps he likes to look at things from different perspectives; or, perhaps he sees an opportunity to seize more territory (or wealth), at Molly’s house while Molly’s asleep at the wheel (inside in front of the heater).

We will likely never know Oreo’s motivation, but here are five things I have learned from watching Oreo and Molly and the choices they are making:

Cats live in the moment

They take time to enjoy the sunshine or a warm fire. We should too. There is a lot of pleasure in life’s small moments, if only we stop, breathe and take it all in.

Curiosity doesn’t kill the cat; it keeps the cat alive

Cats are attuned to changes in their environment. They do not get emotionally invested in catching that mouse if a vicious dog is barking at them. But, if they learn that a fence contains the dog, they may well go back to hunting that mouse. They stay alive to what’s happening around them, making adjustments as necessary, without being consumed by it.

You don’t need to lick all four paws at once

Sometimes the right decision is to start smaller and to invest just a little. You may elect to clean just that one paw, or you may decide to make a bigger investment and wash all four. But not everything is an ‘all or nothing’ decision.

Cats land on their feet

Probably not if you drop them from a 30-storey building (please don’t try) but, like walking a tight rope, they move with such precision, grace and steeliness that, even faced with volatility, they get safely to the other side.

Cats do not really have nine lives

They are just good at assessing their risk. Oreo knows that as a strong, young cat, he can be a little braver. He does not need to spend as much time lining up his jump. His inherent strength, agility and balance allow him to take a risk. And, if he does get it wrong, he has a lifetime ahead of him to correct his error. Molly, on the other hand, as a much older cat, knows she needs to play it safe. She adopts a lower-risk strategy, opting to protect what she has, resisting the urge to chase the shiny new object promising high yields (that may not deliver). Like Molly, people generally become more risk averse as they get older meaning that investment strategies that work for a 25-year-old with no dependents probably won’t work for a 75-year-old.

While I draw some wonderful lessons from watching these two felines, for humans, the world is much more complex. Our brain is both amazingly evolved and concerningly flawed. We are filled with cognitive biases (it is estimated there are in excess of 200 biases) which can lead our thinking away from the correct judgement, without us even knowing. There are reasons for this.

Our brain is a slave to speed, efficiency and comfort. It dislikes uncertainty and it dislikes dissonance (two conflicting thoughts). Fortunately, or unfortunately, the brain is also a prediction machine. Where information is unknown, our brain will simply predict. And, to do that, it uses our past experiences. You see, when making decisions, we do not jump forward to a clean sheet of white paper and consider all information anew. No, we travel backwards into our memories and experiences – but not all of them, because not all memories are created and stored equally. And not all memories are real (yes, made-up memories really happen).

We do not store memories as they have occurred. We store them as we interpreted them at the time, which is why two people can have different recollections of the same event both vehemently believing they are right. Plus, we attach emotion to our memories meaning that a more emotional event will feature more heavily in our memory. That stands to reason, but it can also lead us to over-weighting one experience while discarding or ignoring another that may be equally or more relevant to the decision at hand.

In essence, we think, when we make decisions, that we are being rational, objective and well considered. When, in fact, quite often, we have formed the decision in our subconscious and everything else is a rationalisation after the fact. Our brains are almost too smart for us.

No one can completely overcome the flaws of the human brain (thought to be the most complex structure known to man). However, our aim, as your financial advisers, is to bring a balance of this type of awareness, robust analysis and empathy to better understand, identify and help implement a financial strategy that is tailored to you so that if we were all cats, Oreo can enjoy the letterbox and Molly can enjoy the fire.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today

2022 has been a volatile year for financial markets, with inflation at all-time highs and central banks around the world attempting to play catch-up via steep interest rate hikes. Global supply chain constraints, exacerbated by the war in Ukraine and lockdowns in China have led to fear of a potential recession.

Australian markets have performed better than global counterparts, yet unfortunately, nothing has been safe (except cash). Global markets are down 10-20 percent for the year, bond markets have crashed 10 percent and the ASX is down nearly 10 percent as well. Property prices have also begun to stagnate, especially in the capital cities as the rising cost of borrowing puts a stop to the post- covid property boom.

Investors need to realise that corrections are normal and are part of a healthy market. A steep pullback in the market may provide opportunities to buy good quality companies at a lower price. This makes it even more important to turn down the noise, remain disciplined and stick to a long-term investment strategy. The following quotes should be kept top of mind when investing during volatile market conditions.

*ASX 200 performance over last 12 months to 11/07/2022

1. “The stock market has predicted 9 of the past 5 recessions.” – Paul Samuelson

It does not mean much knowing or expecting an incoming recession as you will always be better off if you remain invested and more importantly, continue to invest during downturns.

2. “Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether.” – Peter Lynch

The only way to guarantee a loss is to sell during a correction and crystalising paper losses.

3. “In the short run, the market is a voting machine, but in the long run it is a weighing machine.” – Benjamin Graham

Markets are impossible to predict in the short term, however, quality companies will continue to perform in the long term.

4. “More money has been lost trying to anticipate and protect from corrections than actually in them.” – Peter Lynch

History has shown that corrections are nothing more than a temporary reset for the market if you remain invested.

5. “Be fearful when others are greedy and be greedy when others are fearful.” – Warren Buffett

The Oracle of Omaha (Warren Buffett) has outlined the importance of avoiding herd mentality. Do not buy during market peaks and add to your positions during steep downturns.

If you need assistance with your long-term investment plan, please reach out to your financial adviser.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

As I write this article, we are now seeing an increase in COVID-19 cases presenting at hospitals and rising workplace absenteeism. The media is now discussing mandates, working from home, vaccine boosters and support measures. It is almost as if we have progressed back three years. Is it a case of Déjà vu?

The world has changed since 2019 and economic conditions globally are now very different. We are seeing global inflationary pressure driving up interest rates and the ability of governments to prop up economies has diminished following several years of borrowing to cover the costs of managing the pandemic. Rising costs of living has seen the passing of increases to the minimum wage and one-off payments to pensioners, but with inflation likely to exceed this rise, some further belt tightening is going to be needed. For retirees, the markets have taken a hit and the majority of superannuation funds have experienced a negative return over the past 12 months. This can be a scary time when there is no income being generated from employment.

So as I line up for my fourth shot and my free flu vaccine, it is time to reflect on my own budget and where haircuts may be required. What do I need to anticipate and review for my overall goals?

Goals

Everyone’s goals are different and prioritising/determining how much to allocate to goals is an individual choice. Let’s look at how you may review some of your goals.

• Retirement – less superannuation may mean reviewing whether you want to work one more year. Could you save enough from your budget for more salary sacrifice, do you downsize or relocate to cheaper housing?
• Buy a house – interest rates are rising, so how much of your budget can you allocate to your loan (how does this compare to rent), will prices in your area come down or rise, do you delay a year to save a bit more for a deposit?
• Holidays – set a budget and maintain it (also, involve the kids). Rising fuel costs and prices may mean some adjustment to expectations.

Needs versus wants

Budgets really are a case of needs and wants.

Needs will consist of fundamental items that are essential – roof over our head, clothing, food and water, essential health. Review your budget, where can savings be made? Have you shopped around on your home loan and general insurances? Challenge them to do better. Do you need the ‘name’ brand clothing or can a basic outfit suffice? Plan your meals and review the catalogues for food savings and plan meals around what is on special, could you grow your own vegetables? Look after your health. Flu vaccines are free so whilst they may not 100 percent guarantee prevention of flu, they will certainly help to prevent it (and with the amount of code reds in Victoria, lessening the load on the hospitals will be a good outcome also).

Wants are items that are great to have, but if they were not there, life will go on. Where can we find savings? With petrol topping $2 per litre, this is a good starting point. Use petrol apps to find the cheapest fuel. Premium versus regular, are you transporting extra weight in the car, could a ride on the pushbike achieve the same goal? Take-away, the morning coffee is the obvious one, but dinners out, take-away foods and pre-prepared meals will cost you more than a family dinner prepared at home. The fitness membership gathering dust, can you sell it or instead of renewing, you could exercise in the park? Streaming services, how many do you have and are they really needed?

Summary

At an individual level, we cannot influence the world around us to stop the conflict in Ukraine, improve trade relations with China or halt natural disasters, but we can focus on managing our discretionary spend and on our personal health. The ideas above are just a sample of how you can help yourself to combat costs of living. Do not assume that the government will provide relief as they manage their own debts incurred through the pandemic and sometimes having a budget haircut can provide a sound financial outcome.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.