The economic impact of the COVID-19 pandemic is playing havoc with finances for many households. In an ideal world, the financial boost should be enough and assumes that everyone was financially prepared for tough times. But in times of crisis, it can all be a little overwhelming.

Here are 5 common financial mistakes to avoid during a crisis and help you get to the other side with minimal money stress:

1. Not paying attention to the household finances

According to a study by Deloitte Access Economics, a worrying 14 per cent of Aussies struggle to pay their bills (including rent, mortgage, utilities and credit cards). The study found that 26 per cent are spending more than they earn and live from pay cheque to pay cheque. Taking time to pay a little more attention to your household budget will help you stay afloat financially and not fall into unnecessary debt.

Start by listing all discretionary spending and reduce non-essential spending as much as you can. Identify those recurring direct debits to subscription services you no longer use. Perhaps home cooking will do rather than Uber Eats. Schedule a payment plan with essential providers such as utilities and rates. Discuss holiday repayment options with your bank or landlord.

Try using a spreadsheet or budgeting app to make it easier to track your spending during this time. You’ll quickly get a true picture of your financial health.

2. Not building up emergency funds

The Deloitte study also found 13.4 million Aussies don’t have emergency savings to fall back on if they are out of a job. While we could not have predicted a pandemic, it certainly has exposed the financial vulnerability of not ‘saving for a rainy day’. A general rule of thumb is keeping aside three to six months of living expenses.

With banks letting borrowers hit pause on their home loan repayments, and as many as 375,000 individuals applying for the repayment relief, saving any excess surplus into an emergency fund to cover delayed repayments will see you in a stronger financial position.

3. Making emotional investment decisions

Share market volatility has seen global markets bounce around, resulting in lower investor confidence. With markets falling as much as 37 per cent, you may be thinking of abandoning your long-term investment strategy and cashing in your portfolio. However, share markets have proven that a recovery follows a crisis. The Global Financial Crisis of 2007 and the Black Monday Crash of 1987 are good examples. So, it makes sense to stay the course with a quality investment strategy whilst reviewing it regularly in line with financial goals.

4. Assuming your estate is in order

Half of Australians do not have a will. Of these, 34 per cent said they ‘haven’t got around to it.’ Without a valid will, your estate affairs end up in chaos. In light of the current pandemic which can have fatal consequences, setting up your estate affairs should be high on your list. A simple will can be drafted up by a lawyer for as little as the cost of smart TV.

5. Not seeking professional advice

In times of financial crisis, it might seem more affordable to take a ‘Do-It-Yourself’ approach to save on costs, rather than seek the advice of a financial advice professional. During COVID-19 crisis, the Australian Government eased the rigid regulatory requirements to allow more access to professional advice. Working alongside a subject matter expert such as a financial planner, may help you achieve a better financial outcome as well as putting your mind at rest about the future.

Reach out to the JBS Financial to help to discuss your situation.

Source: Money and Life

Financial year 2019-20 is now behind us and there’s nothing like closing a chapter to inspire thoughts of a fresh start. But global challenges persist: Australia is officially in a recession while also bracing for a post-Job Keeper economy in September.

While it’s impossible to anticipate future changes to the global economy, there’s plenty you can do to help prepare your personal finances for an unpredictable future. A new financial year is a great time for a check-up and to set yourself new financial goals.

Know your current financial position

The best way to know where you’re headed is to understand exactly where you are. Getting a clear financial picture of your current position – even if it’s one that you’re hoping to improve – is key to unlocking a financial future that you can control.

Start by totalling your monthly expenses and looking at your income. By looking at these two things in detail, you might uncover some unnecessary costs that could be trimmed from your budget. One of the quickest ways to do this is with an automated budget tracker, which automatically tracks and organises all your spending into relevant categories.

Don’t forget to look at your liabilities, too. How much is your credit card debt? Do you have a car loan that’s eating into a possible savings plan and stopping you from achieving your long-term financial goals?

If you have similar information about your finances from last year, use this time to make an annual comparison of your income, expenses and liabilities. Maybe you’ve done better than you think, in which case, it’s cause for celebration. If not, you’ll have an idea of how much you need to recoup or alter in order to improve your situation this year.

Once you’ve got a grasp of your starting position, don’t just forget about it. Keep it somewhere you can refer back to this time next year – or even more frequently – to measure your progress.

Shift your mindset around money

Although we tend to think of money in dollars and cents, there’s a significant psychological component to personal finance. Recent research has found that 81 % of Australians ‘comfort spend’ to try to improve their mood; this is a staggering combined total of $25.5 billion a year.

In addition to simply crunching the numbers, it’s worth taking a closer look at your mindset around money. Renowned psychologist Carol Dweck has spent decades exploring the importance of embracing a ‘growth mindset’, an approach that honours effort and perseverance in reaching goals, as opposed to the ‘fixed mindset’, which suggests our circumstances are unchangeable because our traits are predetermined.

What does this have to do with your money? Dweck’s research suggests we can stay motivated by focusing on what is within our control: knowing that the changes we implement have a real effect on the outcome constitutes a growth mindset and is more likely to serve us in planning our financial future.

Focus on what you can control

Some spending, such as utility bills and groceries, are inevitable and a necessary part of life. But it’s still possible to focus on those things that are within your control, linking back to Dweck’s research. For example, you could take some time to research ways to save money and switch to a cheaper energy plan, purchase home-brand groceries rather than more expensive options or wait for certain items to go on sale.

Alternatively, you could commit to a more conscious approach to purchasing, such as mindful spending, as a way of curbing expenses and heightening awareness of where your money is heading. Try the seven-day rule as an easy way to cut down on impulse purchases and gain more control over every dollar in your budget.

Make clear plans

Getting clear on a plan for the future is a great way to achieve objectives for the financial year ahead. Setting goals that fall under the SMART category (that is, they are specific, measurable, attainable and realistic goals that adhere to a timeframe) is a popular way to approach your financial objectives. Some studies have found a 76% success rate for those who write their SMART goals down.

You could also try the ‘if-then’ strategy, which links a certain outcome with actionable behaviour. For example: ‘if I don’t pay off my credit card by November, I’ll stop buying my morning coffee for a month’. People who implement this strategy are up to 300% more likely to tick things off their list.

Celebrate your financial success

A common problem with the concept of a budget is that it seems prohibitive. It’s all about what you can’t spend, which can have a negative connotation. Switch things up and make an effort to celebrate those times when you’ve made strides in your financial situation, whether it’s paying off debt or getting closer to that savings goal.

Keeping track of your starting position at the outset of the financial year can also help with this as you can measure your progress and goals in facts and figures.

Reach out to the JBS Financial to help to discuss your situation.

Source: AMP

Much like exercise and eating well, your financial wellbeing is key to living a happy and healthy life. So what is financial wellbeing and how can you improve yours?

Financial wellbeing is often overlooked as one of the pillars of good health, but it’s every bit as important as your physical, mental and emotional health.

Poor financial health has been linked to a range of nasty side effects like stress, depression, anxiety, sleeplessness, relationship break-down, drug and alcohol use to name a few. Yikes!

Good health is often about balance. Getting on top of your financial wellbeing can certainly relieve stress and give you the time and money you need to balance all aspects of your health.

What is financial wellbeing?

When we talk about financial wellbeing, what do we mean?

More than just earning an income, financial wellbeing is about having financial security and the freedom to make choices.

There are three interrelated aspects to good financial wellbeing:

1. The ability to meet your expenses and have money left over.
2. Feeling and acting in control of your finances.
3. Being financially secure and not needing to worry too much about money.

It’s considered normal for your financial wellbeing to vary over the course of your life. This is particularly true during major life events such as moving out of home, having a baby, changing jobs or retiring. Unexpected financial shocks can also have a big impact on your financial wellbeing.

How fit are our nation’s finances?

The Financial Wellbeing Australia report (2018) describes four categories of financial wellbeing. Around a quarter of all respondents (extrapolated to 4.5 million Aussies) were classed as having the highest level of financial wellbeing. That is, “no real financial worries… high levels of confidence in managing money and substantial amounts of savings, investments and superannuation.”

Around 40% (or 7.4 million Aussies) fell into the category of “doing ok”. They described their situation as “fair” or “good” and were relatively confident about the next 12-months. A further 23% of respondents (around 4.4 million people) were just getting by, while the remaining 13% (2.4 million people) were considered to be “struggling”.

How can I improve my finances?

Developing good financial habits will help you improve your financial health over time. That includes:

• Having a budget or spending plan.
• Making regular cash savings.
• Building an emergency fund of at least six months living expenses.
• Paying down debt and maintaining a good credit rating.
• Having adequate insurance.
• Building up enough superannuation to retire comfortably.

Much like your physical and mental health, your financial health needs regular check-ups to stay in good condition.

It’s really easy to conduct your own , or you can find a financial planning professional to help you.

Related: How fit are your finances?

How can a financial planner help?

Think of your financial planner like your family doctor: as your partner in good health. Having the right financial planner on your team can help you navigate life’s ups and downs.

A financial planner is able to support your changing needs at every stage of life. For example, in your twenties and thirties a financial planner can help you save, invest and plan for a family. They can help you consolidate and protect your wealth into your forties and prepare for retirement in your 50s, 60s and 70s.

When you see a financial planning professional, they’ll look at your overall financial wellbeing and develop a plan tailored to your circumstances. Again, much like the family doctor, financial planning is an ongoing relationship, not just a one-off meeting. So look for someone that you feel comfortable with and can work with long-term.

There is really no wrong or right time to seek advice from a financial planner. The earlier you get started, the more time you have to benefit from their advice.

Taking the time to focus on your overall financial health and wellbeing has a range of positive flow on effects. Feeling financially secure brings peace of mind, allows you to enjoy your leisure time and fun activities and improves your overall quality of life.

Reach out to the JBS Financial to help to discuss your situation.

Source: Money & Life

There are only certain people who can inherit your super when you die. There are also two different types of nominations you can make. Here’s what you need to know before making your super beneficiary nomination.

Super is different from other assets, such as your house, because the trustee of your super fund ultimately decides who gets your super and any associated life insurance, if it’s held within the super fund, when you die.

Super doesn’t automatically go to your estate, so it’s not automatically included in your Will. That’s why you need to tell your super fund who you nominate. And, depending on the type of nomination, they’ll either consider your nomination or be bound to pay it as you’ve nominated. 

Who can you nominate?

Super fund trustees can only pay your super to ‘eligible dependants’ or to the ‘legal personal representative’(LPR) of your estate.

Eligible dependants are restricted to these people: 

Spouse

A spouse includes a legally married spouse or a de facto spouse, both same-sex and opposite-sex.

A spouse can be a person you’re legally married to but are now estranged or separated from. So, if you haven’t formally ended a marriage, your husband or wife is still considered your dependant under super law. And, while you can’t be legally married to two people, it’s still possible to have two spouses – a legally married spouse and a de facto spouse. 

Child

A child includes an adopted child or a stepchild. Even though a stepchild is included in the definition of a child, if you end the relationship with the natural parent or the natural parent dies, the child is no longer considered your stepchild. However, they may still be considered a financial dependant or in an interdependency relationship with you and could therefore continue to be a beneficiary of your super. 

Financial dependant

Generally, a person who is fully or partially financially dependant on you can be nominated as your super beneficiary. This is as long as the level of support you provide them is ‘necessary and relied upon’, so that if they didn’t receive it, they would be severely disadvantaged rather than merely being unable to afford a higher standard of living. 

Interdependency relationship

Two people have an interdependency relationship if they live together and have a close personal relationship. One, or each of them, must also provide a level of financial support to the other and at least one or each of them needs to provide domestic and personal care to the other.

Two people may still have an interdependency relationship if they do not live together but have a close personal relationship. For example, if they’re separated due to disability or illness or due to a temporary absence, such as overseas employment.

Who is not a dependant?

A person is not a dependant if they are your parents, siblings or other friends and relatives who don’t live with you and who are not financially dependent on you or in an interdependency relationship with you. If you do not have a dependant you should elect for your super to be paid to your legal personal representative and prepare a Will which outlines your wishes. 

Legal personal representative

A legal personal representative (LPR) is the person responsible for ensuring that various tasks are carried out on your behalf when you die. You can nominate an LPR by naming the person as the executor of your Will. Your Will should outline the proportions and the people you wish your estate, including your super, to go to. 

Types of nominations

There are two types of nominations you can make once you decide which super dependants, or LPR, you wish to nominate: 

1. Non-binding death benefit nomination

A non-binding death nomination is an expression of your wishes and the trustee will consider who you’ve nominated but they’ll ultimately make the final decision about who receives your super and any associated life insurance. 

2. Binding death benefit nomination

A binding nomination means the trustee is bound by your nomination. They must pay your super benefits to your nominated dependants in the proportions you set out or pay it to your estate if you nominated an LPR. Binding nominations need to be signed and witnessed by two witnesses who are not named as beneficiaries. Also, they expire after three years unless you re-affirm your nomination.

If you’re not sure of the best way to nominate your super beneficiaries, or to discuss your situation in further detail, please contact us.

Reach out to the JBS Financial to help to discuss your situation.

Source: IOOF

The COVID-19 crisis has seen many Australians taking steps to stay afloat with their finances. With women more likely than men to withdraw super to make up the shortfall in their income, what does this mean for their long-term financial wellbeing?

Here are 5 reasons as to why a super withdrawal during this time could leave women financially vulnerable:

1.Mind the gap

Recent figures from the Australian Bureau of Statistics (ABS), found the average superannuation balance for women aged 25 to 34 was $33,200, aged 35 to 44 is $69,300, and aged 45 to 54 estimated at $129,100. A withdrawal of $20,000 could potentially mean a reduction from $33,200 to $13,200, which is a 60% reduction in her superannuation balance. Given that women retire with an average of 40 per cent less superannuation then men, this withdrawal leaves a sinkhole in her retirement savings and further widens the gap.

Industry Super Australia (ISA) calculated that the financial gap from now to retirement equated to $120,000 for a 25-year-old woman who accessed $20,000 of her super, while a 30-year-old would stand to lose out on $100,000, and a 40-year old $63,000. When compared to the average balance of a 65 year old female’s superannuation at $245,100, you realise the extent of the damage.

2. Playing catch up

You may be thinking, ‘I’ll play catch up and make up the amount down the track’. We recognize that for some, covering the rent or loan repayments now takes priority over their future retirement. However, to recoup the equivalent of $10,000 back into superannuation requires an annual salary of $123,839 paying 9.5 per cent per annum in superannuation guarantee contributions. According to the ABS, the average weekly earnings for a female is $1,508.50 (or $78,442 per annum), which falls short of the six figure income required to replenish the shortfall.

3. Broken working patterns

Perhaps the thought of working extra hours has crossed your mind. Here is a sobering thought. A report from the Association of Superannuation Funds of Australia (ASFA) on Women’s Economic Security in Retirement found that women are more likely than men to be working longer in a part-time capacity. This figure rises to 61% for women who care for family, stay-at-home mums, take a career break to study or are unable to find suitable full-time employment. The report goes on to say that the broken working patterns adversely affect a woman’s security in retirement.

4. Locking in losses

Chances are, your super is invested in a ‘balanced’ option. The average balanced portfolio has lost 10-12 per cent in the last month, underpinned by sharp falls in equity markets. A withdrawal now could potentially mean that you are withdrawing an amount of $20,000 that would otherwise be valued at $22,727, crystalizing a loss of $2,727, that should have been working for you within your superannuation.

5. Loss of insurance cover

A sizeable withdrawal of $20,000 from your super, combined with regular fund fees and insurance premiums, added to a break in working patterns, could push your account balance below $6,000, leaving you vulnerable to automatic cancellation of insurances within super. According to a report by Lifewise, with 95 per cent of Australians underinsured, you’d want to be sure to hang on to this valuable safety net.

Reach out to the JBS Financial to help to discuss your situation.

Source: Money and Life

There’s no denying that staying home has been the best defence against Coronavirus. The less contact you have with other people, the easier it is to stay healthy. But staying at home day after day has been a tough ask – especially for people who live alone. Being unable to hug your grandchildren, catch up with your friends or enjoy your usual social activities has taken a toll on the emotional and mental health of many Australians.

So how have older Australians kept their spirits up and maintained contact with their loved ones during social isolation?

Staying physically and mentally well

A brisk 30-minute walk each day can be a great way to keep fit – making sure you keep the obligatory 1.5 metres away from others. As restrictions ease, it will become less stressful for you to head out of the house which is an added benefit. Those that are unable to go for walks have been finding other ways to keep physically active at home. Seniors are using housework, gardening, washing the car, climbing stairs, carrying and unpacking the groceries, and doing stretching exercises to stay in shape.

The benefits of physical exercise include’: 

• Better sleep
• More energy
• A reduced risk of injury and falls
• More mobile joints
• Better mental health

As well as exercise, be sure to keep up regular health checks and see a doctor if you’re unwell. While face-to-face consultations are still available, many doctors and medical centres have also been offering healthcare from home using phone or video conferencing if you’re still not comfortable venturing out.

Whether you’re still in self-isolation or not, it’s also important to set aside time each day to do things that you enjoy. Many Australians, both young and old, are getting back into simple activities such as reading, gardening, doing puzzles, baking, colouring in or drawing, crafts and woodwork. These types of mindful activities are a great way to reduce stress and improve your mental wellbeing. Senior Australians have also taken up online learning to fill in free time.

Taking care of your finances

If you’re already retired and are drawing pension payments from your super, you can take advantage of the government’s temporary reduction to minimum drawdown rates. This could give you more flexibility with your retirement income and provides you with the option to leave more of your retirement savings invested.

Reach out to the JBS Financial to help to discuss your situation.

Source: Colonial First State

According to the Australian Taxation Office, there are three ways to claim your home office running expenses.

The actual cost method

Under this method, your tax deductions include the actual costs of work-related expenses. This applies to things such as the costs of your home office furniture and fittings, as well as equipment such as computers and desks.

If the cost of depreciable home office items is less than $300 you may claim the full cost of these items as a tax deduction. If the cost of depreciable home office items is over $300, you may claim a deduction for the depreciation of these items.

If you regularly phone your employer or clients while you are away from your usual place of work, you can also claim a full tax deduction for the work-related portion of the phone calls you make at home and the cost of renting your phone.

Other costs you can claim a deduction for under the actual cost method include:

• Internet access charges.
• Printer and printer cartridges.
• Stationary.
• The cost of heating, cooling and lighting your home office, over and above the amount you would ordinarily pay if you did not work from home.
• Any repairs to your home office furniture and fittings.

As your home isn’t considered to be a place of business, you can’t claim non work-related expenses under this method. This includes rent, the interest you pay on your mortgage and the cost of any insurance premiums.

The fixed cost method

Under this method, instead of tax deductions relating to the work portion of costs incurred at home, you can claim a rate of 52 cents per hour for expenses such as heating, lighting and cooling, come tax time. You can also apply the same rate when claiming a depreciation of home expenses, for example any furniture you’re now using in your home office.

The shortcut method

At the moment a special method, known as the shortcut method, is available to people working from home to claim work-related expenses as tax deductions. Please note however, that the special rate is only available from 1 March 2020 to 30 June 2020.

Under this method, each person in a household can claim expenses based on a rate of 80 cents an hour. So more than one person in a household – flatmates or members of the same family – can each claim a deduction for their expenses incurred that directly related to working from home. All that’s required to do so, is keeping a log of the hours you work.

The 80 cents per hour shortcut method seems like an easy way to work out your home office expenses come tax time. However, the risk for people using this method is that they won’t claim as much as they are entitled to under the other two methods. You also can’t claim the cost of equipment such as webcams and office furniture, as well as stationery or computer consumables like printer cartridges.

Whichever method you choose, it’s a good idea to keep accurate records of all your actual expenses, plus the hours you have worked. That will allow you to choose the best method when you or your tax agent prepares your tax return.

Reach out to the JBS Financial to help to discuss your situation.

Source: BT

Australians lost over $634 million to scams in 2019, according to the latest figures in the ACCC’s Targeting Scams report released today.

There were more than 353,000 combined reports to Scamwatch, other government agencies and the big four banks last year.

“Unfortunately it is another year with devastatingly high losses, and scammers are constantly finding new ways to defraud Australians,” ACCC Deputy Chair Delia Rickard said.

“This year we have included data from the big four banks which gives a more complete picture of how much people are losing to scams.”

Business email compromise scams accounted for the highest losses in 2019, with the Australian business community, and some individuals losing $132 million.

This was followed by investment scams at $126 million, and dating and romance scams at $83 million.

Over the last 10 years of Targeting Scams reports, Scamwatch has received almost one million reports of scams.

“When we combine Scamwatch reports with partner data, we see that Australians have reported losing $2.5 billion over that time, which is astonishing,” Ms Rickard said.

We know these numbers still vastly understate losses as around one third of people don’t report scam losses to anyone and in the past far fewer scam reports to other agencies have been captured.”

“Some of these scams can last for months, or even years, and can leave victims financially and emotionally devastated.”

Based solely on reports provided to the ACCC in 2019, scams originating on social media increased by 20 per cent and contacts via mobile phone apps increased by 29 per cent.

“Over the last decade, scammers have taken advantage of new technologies and current scams are using social media apps and new payment methods that didn’t exist in 2009,” Ms Rickard said.

“In particular, a new trend with dating and romance scams is scammers contacting the victim on social media apps or games which are not designed for dating, so it’s important to be aware that scammers can target you anywhere.”

Common techniques that scammers use to manipulate their victims include making exclusive offers that you don’t want to miss out on, or asking for small commitments, such as completing a survey, to make the victim more likely to comply with larger schemes.

“You can always say no, hang up the phone or delete an email, even if you’ve said yes previously. You don’t owe the scammer anything,” Ms Rickard said.

If you think have been the victim of a scam, contact your bank as soon as possible and contact the platform on which you were scammed.

The ACCC continues to work with the private sector to share intelligence about scam trends impacting their services, to assist their own disruption efforts.

The ACCC encourages people to visit www.scamwatch.gov.au to report scams and learn more about what to do if they are targeted by scammers.

Source: ACCC

In the first year since older Australians have been allowed to make downsizer contributions, 4,246 people have contributed a total of $1 billion in downsizer contributions to their super funds (1 July 2018 – 1 July 2019).

This not only allows retired people to have access to more money to fund their retirement, it’s also likely to have freed up new property for sale for first home buyers and young investors.

Although this is good news for people who have benefited from this scheme, some people have reportedly missed out because they didn’t understand the eligibility criteria.

Here’s a summary of the rules around making downsizer contributions:

• You need to be 65 or over at the time of making the contribution.
• You or your spouse need to have owned your home for more than 10 years prior to the sale.
• You don’t need to be working.
• Both you and your spouse can make a concessional downsizer contribution of $300,000 each if you both lived in the property at some point in time and the proceeds of the sale are exempt or partially exempt from capital gains tax (CGT) under the main residence exemption or because you bought the property before 20 September 1985. If only you lived in the property at some point in time then only you, not your spouse, can make a downsizer contribution (as long as you meet all other conditions).An investment property that you haven’t lived in is not eligible.
• Houseboats, caravans or mobile homes are not eligible.
• The total super balance test of $1.6 million and the $100,000 non-concessional contributions cap restrictions don’t apply.
• You need to make all downsizer contributions within 90 days of receiving the proceeds of sale, usually the date of settlement.
• You can only downsize once.
• You don’t need to buy another property to use the scheme.

If you sell your home and put some of the proceeds into super, you need to consider how this will affect your Centrelink benefits. Your super balance is counted towards the means test so you could potentially lose some, or all, of your Centrelink benefit if your super balance goes up.

Reach out to the JBS Financial to help to discuss your situation and what your can do.

Source: IOOF

Wearable technology can monitor our heart rate and tell us how much sleep we’ve had, but what about our financial wellbeing? If you could benefit from a Fitbit for your finances, read on.

Just like your physical health, the more you can monitor what’s happening with your finances, the easier it will be to improve your financial fitness.

We all know that financial stress can have a negative impact on our physical and mental wellbeing, leading to stress, anxiety and depression. Research has even shown that employees suffering high financial stress are “more than four times as likely to complain of headaches, depression and other ailments.”

So, if you could get a Fitbit for your finances, what would it track? Keep an eye on these key metrics and you could be feeling financially fit in no time.

1. Spending

Expenses are a fact of life, but this is one area where things can easily get out of hand. Much like overeating, it’s all too easy to buy too much and spend on things you don’t really need, especially if you’re not keeping track of where your money is going. And technology sometimes makes it even easier to overspend.

Buy Now Pay Later and tap and go payments make it harder than ever to keep track of what’s leaving your account.

What to do:  

Make a list of your essential costs, such as rent or mortgage, utilities, food, fees and regular bills.

Try using a spreadsheet or budgeting app to make tracking your spending as easy as possible. Many banks now offer breakdowns of your spending by category in their apps, so take advantage of these free tools. By monitoring where you’re actually spending money each day, you’ll quickly get a true picture of your financial health. If your spending habits are putting you on the wrong path, learn how to plan and stick to a budget.

2. Debt 

Like carrying a few extra kilos, debt can creep up on you and weigh you down more than you realise.

Reserve Bank data shows consumers have nearly twice as much household debt as income. Meanwhile, the average Aussie tips the scales at $3271 in credit card debt, adding huge pressure to their daily lives.

What to do:

• Detox your debt. The first step to financial health includes keeping levels of personal debt to a minimum.
• Look at consolidating your debts onto one card or personal loan, so that you’re only dealing with one repayment each month.
• Take advantage of interest free periods to pay down your debt.
• Put a repayment plan in place – and stick to it!

3. Savings

Once your debt reduction strategy is underway, you can focus on another key aspect of your financial health: Savings. How much you have stashed for a rainy day is a strong indicator of your overall financial health.

What to do:

Open a dedicated high-interest savings account that’s separate from all of your other accounts.

Make regular, consistent deposits – weekly, fortnightly or monthly. Add any extra cash windfalls to your savings account, such as tax returns or bonuses. Sit back and watch the power of compound interest at work.

4. Superannuation 

If you want to stay financially fit and healthy into your old age, you need to lay the groundwork now. That means knowing how much you need to maintain the lifestyle you want and working towards that figure.

The Association of Superannuation Funds of Australia (ASFA) estimates that for a couple to have a ‘comfortable’ lifestyle they need at least $640,000, while a single person needs $545,000.

5. Emergency fund 

Like health insurance for your finances, having an emergency fund gives you a buffer against unexpected hard times. You should aim to have enough in your emergency account to cover six months of living expenses, including housing, to protect you in the event of losing your job, falling ill or any other major disruption.

6. Insurance 

If you should lose your income for longer, or permanently, there are several types of personal insurance that can help protect you and your family from financial hardship.

Life insurance, total and permanent disability (TPD) and income protection all have a role to play in your financial wellbeing. Depending on your stage of life, financial situation and responsibilities, it’s worth ensuring that you have a mix of all three types of insurance.

A financial planner can help you understand what you need and get the right level of cover to protect your lifestyle.

7. Credit rating 

A good third-party check-up of your financial health is your credit rating. Compiled from your personal financial information by a credit reporting agency, it’s one important indicator of your overall financial fitness.

Several things can affect your credit score, including your borrowings, number of credit applications and whether you make repayments on time.

To discuss your situation please get in touch. Reach out to the JBS Financial to help you get your money and financial future in control.

Source: Money and Life