The end of financial year on 30 June is a good time to take stock and get your finances in order.

Being prepared, reviewing your super contributions and submitting your return on time are good policies every year, but the shadow of COVID-19 (coronavirus) means many of us face unexpected pressures in a changing economic environment.

This is an end of financial year like no other. Many people will have concerns around job security, which makes long-term planning seem less important.

You may face urgent priorities for your money, such as mortgage repayments, covering bills and paying down debt.

If you’ve worked from home this year, the government has recently released guidance on claiming working from home expenses as a tax deduction. Due to COVID-19, this financial year the ATO will accept a shortcut method for calculating running expenses from 1 March to 30 June.

Here are some other things to consider as 30 June approaches.

1. What’s new this year if you’re at or near retirement

Changes kicking in this financial year include lower minimum pensions draw-down requirements to help retirees affected by significant losses in financial markets as a result of COVID-19.

The minimum annual payment required for account-based and allocated pensions and annuities has been cut by 50% in the 2019–20 and the 2020–21 financial years.

If you’ve recently retired, you may still be able to make voluntary super contributions and potentially claim a tax deduction for personal super contributions. Current regulations allow eligible ‘recent’ retirees, aged 65 and over, a limited exemption from having to meet the work test, which is otherwise required to make voluntary super contributions. This applies to contributions made from 1 July 2019.

This is also the first year that those who are eligible can use unused carried forward concession cap amounts from the previous financial year.

First applications for early release of super withdrawals up to $10,000 must be made by 30 June. A further application can be made between 1 July and 24 September 2020.

Super fund members born between 1 July 1962 and 30 June 1963 will reach their preservation age during the 2020/21 financial year and may wish to consider whether a transition to retirement pension is appropriate.

Proposed changes

From 1 July 2020, the following proposed changes, if legislated, may benefit members aged 65 and 66 who want to make additional contributions to super.

• • Up to age 67 (currently 65) you will be able to make personal and non-mandated employer contributions to super without needing to satisfy the work test (ie been gainfully employed for 40 hours in 30 consecutive days during the financial year in which the contributions are made).
  • You will be able to access the bring forward provisions for the non-concessional cap up to age 67 (currently 65). This means you will be able to contribute up to $300,000 to super (you can generally bring forward up to $300,000 if your total super balance on the previous 30 June is less than $1.4m, or up to $200,000 if it’s less than $1.5m). Note that legislation on this change hasn’t yet been passed.
  • The maximum age at which you will be able to receive a spouse contribution will increase from 70 to 74.

2. Super contributions

End of the financial year is usually a good time to think about making extra contributions to take advantage of the lower rates of taxation on super.

While that might be harder this year with competing priorities, it still makes sense to keep in mind that additional contributions today could boost your super balance in the future. There are a number of different types of contributions to consider. You may also be able to reduce your taxable income and pay less on investment earnings.

To claim a tax deduction on your post tax contributions, you need to tell your super fund by filling in a notice of intent. You will generally need to lodge this notice and have the lodgement acknowledged by your fund, before you file a tax return in the year you made the contributions.

If you’re earning more than your partner and would like to top up their retirement savings, or vice versa, you may want to think about spousal contributions. The spouse making the spousal contributions could be eligible for a tax break.

You and/or your partner may also be eligible to receive a government co-contribution. If so, you might consider making a personal non-concessional contribution before 30 June to make sure you receive the matching government co-contribution for the 2019-20 financial year that you are entitled to.

3. Insurance

If you have income protection cover, and your budget allows, you may consider pre-paying your premiums 12 months in advance to take advantage of claiming a bigger tax deduction this year. This may work well if your income is higher in the current income year than next.

However, it is important to get some tax advice as to whether doing so this year is a good idea for you based on your income.

4. A bumper year for bargains?

Tax time often tempts retailers to discount older stock from computers to cars. This year, the awakening of the hibernating economy may see more businesses keen to generate short-term cash flow by lowering prices or extending credit terms.

Having switched to cashless payments during lock-down, many retailers may keep these arrangements and pay more attention to online sales.

Shopping via your phone or other online device means you don’t have to rub shoulders with anyone at the office supplies discount bin. You also don’t have to leave home to use price comparison sites such as Finder or Compare the Market to seek out a better deal on everything from children’s toys to pet insurance.

Remember to hang onto your receipts for anything relevant to your work for tax time.

5. Key dates

Online lodging has made most tax returns quicker and easier than the days of losing paper receipts. Lodging on time keeps the ATO happy and means that if you’re in line for a refund, you’ll get your money faster.

Individuals can lodge a tax return with the ATO from 30 June. If you’re doing it yourself, you have until 31 October 2020 to lodge it, or potentially longer if you’re using a registered tax agent.

For businesses, super guarantee contributions for the current quarter are due by 28 July, however, if you want to be able to claim these contributions as a tax deduction in the 2019–20 financial year they must be paid by 30 June.

6. Talk to a professional

To discuss your situation and how you may benefit from these strategies, please feel welcome to get in touch. Reach out to the JBS Financial to help you prepare for your end of year commitments.

Source: AMP

How will consumer behaviour change your business after the coronavirus pandemic? These real-time insights provide some clues for small business owners.

As scores of small businesses face shifts in consumer behaviour due to COVID-19 (coronavirus) there’s never been a better – or more important – time to consider pivoting your model, offerings or services to suit the ever-changing world. While many aspects of our lives remain in flux during times of crisis, there are a few emerging trends expected to outlast the pandemic that could alter your company – for the better.

Here are six ways your business might change as a result of the COVID-19 impact.

1. A (bigger) push for online services

With national isolation measures leading to consumers spending more time at home, it’s unsurprising that e-commerce has experienced a significant bump. Recent data shows that sectors such as online retail, food home delivery and pet services have soared despite a general decline in discretionary spending¹.

But this isn’t necessarily due to COVID-19, say experts; rather than being the direct result of reduced face-to-face dealings, it’s more indicative of a growing appetite for shopping online and an evolving trust that Australians are placing in online-focused businesses. Companies that are flexible in their future offerings, especially with the integration of online sales and services, are expected to fare far better post-coronavirus².

2. More localised production

Pre-coronavirus, Australia had a strong import and export relationship with China; in 2018, for example, imports from China topped $21 billion³. Now that supply chains, manufacturing schedules and delivery times have been compromised by widespread shutdowns, local businesses can use the opportunity to explore production. More than 90% of Australians aged 14 and over said they were more likely to buy products made at home, according to Roy Morgan findings⁴  before the pandemic, and this trend has gained momentum with coronavirus.

3. A move to mapping the supply chain in detail

Local businesses in Australia are expected to lose 10% of revenue as a result of coronavirus-related supply chain delays⁵. Experts say that companies who employ supply chain mapping – a detailed knowledge of the supply chain at every tier – are emerging as the most successful in terms of weathering supply chain hiccups inflicted by coronavirus delays⁶.

Taking a closer look at your supply chain beyond the first tier might help prevent costly delays in the future and it could be an opportunity to make your offerings faster, more efficient and more accurate⁷.

4. A permanent switch in payment types

We were already on our way to becoming a cashless society. The pandemic and social distancing have led to an even more widespread adoption of cashless payments. So it makes sense for bricks-and-mortars to consider more seamless ways to integrate digital payments both in online and offline offerings of the business.

The goal is to minimise the obstacles your customers must overcome to reach the end point of sale. For example, small, portable card readers are now extremely popular and ideal if you’re in hospitality or frequently change premises, such as market stalls and pop-ups.

5. An increase in wellness in the workplace

The quick shift to entire companies working from home has led to a desire to address any possible adverse effects, including anxiety, disconnection and low employee morale⁸. As such, investing in workplace wellness will become even more important for businesses striving to increase employee retention and reduce absenteeism, which costs the Australian economy approximately $35 billion per year⁹. That’s a saving any business could benefit from.

6. A shift to a full-service model

While bricks-and-mortar stores aren’t expected to completely collapse, the survival of retail brands will depend on a cohesive physical and digital offering, say experts¹⁰. There’s still interest in spending – retail sales in Australia rose by 8.5% in the month of March alone¹¹ – but shoppers may take time to feel comfortable in physical stores again. Add to that March figures for ecommerce sales showed a 5.6% rise on a month-on-month seasonally adjusted basis¹² means retail businesses might want to look at expanding their e-commerce offerings in line with the increases in online shopping.

For help with your business finances, speak to financial adviser or your accountant. Take the first step and book a meeting with the JBS Financial team here.

^{1 AlphaBeta Australia: COVID-19 economic impact
2 KPMG: COVID-19: Retail’s survival and revival
3 Asialink Business: China’s Imports and Exports
4 Roy Morgan: Aussies give stamp of approval to Australian-made goods
5 PWC: The coronavirus disrupts supply chains, ratcheting up the pressure on global businesses as the US-China trade tension cools
6 Harvard Business Review: Coronavirus Is a Wake-Up Call for Supply Chain Management
7 McKinsey and Company: Supply Chain 4.0 – the next-generation digital supply chain
8 Forbes: 5 Predictions About How Coronavirus Will Change The Future Of Work
9 Direct Health Solutions: 2019 Absenteeism Survey Results
10 Fortune: The retailers that are smartest about shopping tech will finish on top after the coronavirus
11 Australian Bureau of Statistics: Retail trade, March 2020
12 Savings.com.au: Coronavirus drives record growth for retail sales in March}

There are people who are better at the whole social distancing game than others. If you already normally work from home, for instance, you might be laughing into your elbow as you listen to the newly homebound lament that their desire to binge on Netflix on the weekend isn’t so appealing when they can do it 24/7.

But whether you’re an old hand at this or still an apprentice, the uncertain and often frightening course of this rapidly unfolding pandemic can upend even the most stoic of temperaments.

One thing we can control, however, is our behaviour. Hiding under the doona isn’t going to offer anything more than a temporary reprieve from reality, so it’s important to find ways to make the most of your quarantine.

Psychologist Dr Nellie Lucas says creating “opportunities for calm” in the storm of worry and stress can be done with a sense of purpose.

“Begin by noticing the small things – appreciating the sunshine in the garden, the smell of coffee in the morning,” says Lucas, who is principal clinical psychologist at Melbourne Clinical and Child Psychology.

“Schedule times for social media and the news. A morning slot and an afternoon slot can work well for most of us. Similarly try and plan your day so work does not flow into rest and other activities. Recognising a need for balance can sustain you at a time when worry can escalate,” she says.

Space patrol

If you’re literally boxed in, with few options for outdoor pursuits beyond the supermarket, it might be useful to seek guidance from someone with experience being confined in tight spaces.

Astronaut Anne McClain, who was a flight engineer on the International Space Station (ISS) in 2019, recently shared some of tips with her 125 million Twitter followers.

Most are surprisingly applicable to those of us here on earth and focus on basics like self-care, including “hygiene, managing time and personal stuff, getting sleep, and maintaining mood”.

And because she had to share the ISS, there was advice on team care and group living, from respecting roles and responsibilities to being accountable, giving praise freely and keeping calm in conflict.

Another tip from astronauts: keep busy. They don’t have a lot of time to sit around and stare into space. Okay, they do a bit of that. But like grandma used to say: an idle mind is the devil’s workshop. In other words, engaging in physical and mental activities is a great way to stop your mind wandering into worst-case scenarios or terminal boredom.

Setting tasks and sticking to them not only provides structure to your day, completion brings the satisfaction of seeing a job well done, no matter how mundane. Your challenge is to recognise when you’re slipping into an apathetic state (every now and then is fine) and refocus on a worthwhile pursuit.

Bills, bills, bills

Until very recently, few of us would have imagined that not having to spend hours commuting would result in an abundance of spare time to sort out all those pesky admin tasks we typically put off until they’re overdue.

He advocates the time-honoured practice of allocating one-third of your income for housing costs, one-third for lifestyle-related activities, and one-third for savings.

Structuring your day when you’re isolated can restore a sense of purpose and normality to your daily life. The Australian Psychological Association recommends scheduling chores and activities you enjoy helping you stick to your routine.

As it happens, precarious times call for a keen eye on one’s financial situation, so get stuck in. Drag out those receipts and take a deep dive into your taxes. Before you know it, you’ll have everything ready to send to the accountant months before your return is due.

Household budgets, bank accounts, insurance policies and superannuation are also good candidates for review.

Don’t try to do everything at once. Set aside a few hours a day and imagine that once this crisis is over, you’ll be so organised you can focus on getting back to normal, whatever that may be.

Structuring activities around mealtimes and bedtime can also help you keep to your schedule while ensuring you eat regularly and get enough sleep.

Another way to celebrate your achievements is to shift gears and take your focus off you. It turns out altruism is often an unexpectedly beautiful benefit of calamity. We saw it during the recent bushfires and floods and the Australian Psychological Society says positive social connections can help us cope in times of stress, especially when we’re being asked to distance ourselves from others.

Maintaining social networks can be as simple and easy as phoning a friend to share your experience, using video conferencing technology to check in on an elderly relative, or spending quality time with the people you live with.

“As our worries build this can flow into stress upon our relationships,” says Lucas. “Making time to plan and problem solve your approach to the day can ease this stress. It can also get you into the habit of problem solving rather than worrying and feeling compassion rather than frustration.”

And if you find you sometimes still struggle with bouts of stress or anxiety, it’s normal. But don’t be afraid to seek professional support. A psychologist or counsellor may be able to help.

Stay safe and take care from the JBS Financial team.

Source: Colonial First State

Finding the right level of insurance cover is important when you’re thinking about retirement.

If retirement’s coming up on your horizon, the impact of COVID-19 (Coronavirus) may have thrown a warehouse-sized rack of spanners in your planning.

It makes sense to concentrate on things you can control, such as insurance. Too-high premiums can chew away at the foundations of your savings, at a time when they’re more important than ever. Under-insure and one day your floor may collapse, undone by events you can’t foresee.

Cover for a changing life

A good way to get started is to think about what you really need, and what you don’t. As you get close to retirement, you may want to make sure you’re holding the right insurance for the lifestyle you want.

Here’s a simple checklist that may help:

1. Ask yourself how much money your family would have if you were to pass away or become disabled.
2. Compare that with how much money your family might need in the same situation, including how they’d manage paying for day-to-day costs like child-care and mortgages.
3. The difference between the two can help you work out how much insurance you may need.

Many of us take out insurance and are done with it – it’s enough to know we have the proverbial rainy day covered off. However, with economic clouds gathering, now’s a good time to review what you’ve already got and assess if it’s still right for you and your needs.

So, dig out your existing insurance agreements, taking special note of when they’re due to expire and your continued eligibility for the policies they hold.

An important area for many Australians is insurance held inside superannuation.

Insurance inside super

Insurance inside super can help us out when we really need it. Like any type of insurance, it works best when you’ve got the right level of protection for your situation. As you head towards retirement and your life changes, so might your priorities.

As well as life insurance, you might have total and permanent disablement (TPD) inside super. TPD cover may provide you with a lump-sum payment if you suffer a disability that prevents you from ever working again.

TPD could help you pay for ongoing medical expenses, alterations to your home to make day-to-day life easier and help provide future financial stability.

Total salary continuance, also known as income protection, is designed to pay a monthly benefit of up to 75% of your pre-disability regular income if you’re unable to work due to injury or illness.

Typically, within super, income protection provides you with cover either for a two-year or five-year period or until you turn 65, depending on the terms in your employer plan.

What to look out for

There are pros and cons of insurance within super. Things to think about if you’re approaching retirement include:

• Cover through super may end when you reach a certain age (usually 65 or 70). That’s generally different to cover that’s outside a super account.
• Taxes may be applied to TPD benefits depending on your age.
• Claim payments may take longer, as the money is normally paid by the insurer to the trustee of the super fund before it’s paid to you or your dependants.

Don’t double up and stay flexible

As part of your review, it’s also a good idea to check insurance you hold inside super against other policies you might have outside super.

Then compare your cover, check whether you have any insurance double ups – if you have more than one super account with the same type of insurance, you may be paying for more insurance than you need.

As well as comparing the level of cover you get, consider any exclusions, such as the treatment of any pre-existing medical conditions, and waiting periods. Remember that if you do cancel your insurance, you might lose access to features and benefits and may not be able to sign back up at the same rate.

It’s also important to disclose your situation to your insurer honestly. Otherwise, the insurer may be entitled to refuse your claim.

Tricky times call for flexible thinking. Volatility can be daunting, whatever age you are. Fortunately, you’ve got the life experience to look beyond the headlines and adapt to changing circumstances. Reviewing your insurance is as good as any place to start.

Do you need help? Book a chat with the JBS Financial team here to see how we can help you.

Source: AMP

The recent sell-off on global sharemarkets due to the economic impact of COVID-19 has highlighted the risks of depending too heavily on a single asset class. Even before the current crisis, the ATO was concerned about a minority of self-managed superannuation funds (SMSFs) with up to 90 per cent of their money in a single asset class.

Invariably that single asset is an investment property for which the SMSF has borrowed money through a limited recourse borrowing arrangement (LRBA). While property has historically provided good returns over the long run, this is not always a good recipe for providing income in retirement.

The ATO is so concerned about this trend, that last year it wrote to 17,700 SMSFs warning them about the dangers of concentration of risk and suggesting they should perhaps consider greater diversification.

One of the foundations of prudent investing is diversification. By putting your money in a range of investments and asset classes you effectively spread your risks.

Have a written strategy

Diversification is important for all investors, but especially so for those with an SMSF who are ultimately responsible for their own investment strategy. That’s why SMSFs are required to put their investment strategy in writing.

This is your plan for making, holding and realising assets consistent with your investment objectives and retirement goals. It should explain how your chosen investments will help you meet your goal.

If you have 90 per cent of your fund’s money in a property, you need to document that you have considered the risks associated with this lack of diversification. You need to state why you think the investment will meet your fund’s investment objectives and cash flow requirements.

This document can be attached to your strategy as a signed and dated addendum. If you cannot justify your heavy weighting in property, then you need to change the fund’s portfolio mix otherwise each individual trustee may face a fine of $4200.

Understanding gearing

Of those SMSFs that have focused heavily on property, a disturbing fact is that many of those funds have lower balances of between $200,000 and $500,000. This makes them even more vulnerable to a market fall. In 2017 the average borrowing under a LRBA was $380,000 and the average value of assets was $768,600.ⁱ

With an LRBA, the asset is held in a separate trust. Any investment returns earned from the asset go to the SMSF trustee. If the loan defaults, the lender’s rights are limited to the assets in the separate trust so there is no recourse on any other assets held in the SMSF.

That’s all very well, but if those other assets represent less than 10 per cent of a fund where the balance is $300,000, then having around $30,000 left in your super should you come a cropper clearly will not provide adequately for your retirement.

The banks require a personal guarantee from the members when setting up an LRBA so if you default on the loan then any shortfall must be met personally which could further undermine your retirement planning.

How to diversify

How you achieve diversity in your SMSF will depend on the risk profile of the fund’s members. For example, there’s no harm in being skewed towards more conservative investments if the members have a low tolerance for risk, but the trade-off is lower returns in the long run.

The type of investments in the fund may also depend on the age of members. If retired, then you probably need two years’ cash readily available. However, the remainder should be in a balanced portfolio of growth investments, bonds and fixed interest. That way the capital can still grow even in retirement, which will help ensure you don’t outlive your fund.

In contrast, younger fund members might skew their portfolio more towards growth assets such as domestic and international shares. This is because there is plenty of time to recover from market falls such as the one we are currently experiencing. Alongside these growth assets you should also have some fixed interest and bond exposure.

If you would like to discuss your SMSF’s investment strategy and make sure that you are not exposing yourself to unnecessary risk, book a meeting with the JBS Financial team here. 

i https://www.cfr.gov.au/publications/policy-statements-and-other-reports/2019/leverage-and-risk-in-the-superannuation-system/

Face-to-face encounters have become less frequent in so many areas of our lives – and banking and shopping are no different. So, now’s an ideal time for older Australians to start integrating more digital transactions into their everyday banking. Using these methods for the first time can be intimidating, so we’ve answered some of the key questions you might have about digital transactions and online finance.

What are contactless payments?

In the wake of the COVID-19 (Coronavirus) health crisis, many shops and businesses have moved away from cash and are accepting payment by credit or debit card only. If you go into a store to buy something, you’ll likely be asked to use the ‘contactless’ payment method. This is simply a payment that’s processed in real time by holding your debit or credit card near the card reader without the need to swipe or insert it.

Also known as Tap & Go, this method allows you to make a purchase of up to $200 (temporarily increased from the $100 pre-COVID-19 limit) by simply hovering your card above the machine – you won’t need to enter a PIN.

If your transaction is in excess of $200, you’ll need to enter a PIN. Use one hand as a barrier over the keypad to prevent anyone else seeing your pin entry.

It’s also worth mentioning that some merchants may pass on the costs they incur to use these processing systems. If you are charged, the surcharge varies between merchants. You may find you’ll have to pay a small percentage for credit and debit purchases; however, merchants will generally let you know before the transaction.

How do I pay bills online?

Generally, a bill that you’d normally pay in person or at the post office can be paid online through online banking, using the secure and safe electronic payment system of BPAY, a widely used bill payment service.

Each bill you receive has its own unique BPAY information, which is located at the bottom of the bill. To pay a bill using BPAY:

1. you’ll need to log in to your own online banking system
2. go to the section where you pay someone or transfer money
3. select BPAY as the payment method, and
4. enter the information you find on your bill.

What details do I need to give when I’m shopping online?

While older Australians are still the most likely age category to prefer paying with cash, habits are changing we’ve seen a steady and significant move to payment methods other than cash in the over-65 age group.

When you purchase something online, you’ll be asked to enter your details, including your name, address and contact details for the delivery. You’ll also be asked for the debit or credit card number that appears on the front, as well as the CVC or CVV number, which is the three-digit number printed on the back of your card or four-digit number on the front of the card above the main numbers. This is an important anti-fraud measure to ensure that only you, the card holder, can make purchases online.

As a convenient feature on your computer or mobile phone, you may be prompted with a pop-up message to save your debit and credit card details for quicker checkouts when online shopping in future. If you don’t feel comfortable storing them digitally on your computer or mobile phone, you can reject or opt out of the pop-up request.

I’ve heard that online banking and shopping can be unsafe. How can I reduce this risk?

It’s true that if you’re online, there can be a risk of online fraud and ‘phishing’. Phishing is the sending of fraudulent messages through channels such as email, social media and text messages that are designed to steal your confidential information. However, there are several steps you can take to increase the safety of your finances and details online.

• Never give out your personal information or details via email, text message or over the phone, unless you have called your financial institution directly.
• Never enter sensitive details into a website you’ve arrived at by clicking on a link, including any links you’ve received in an email or text message. In particular, you should always go directly to the website of a financial institution or online banking system, rather than via a link.
• Familiarise yourself with scams that are circulating so you can stay informed. A regular update of these appears on the Stay Smart Online website.

Looking out for fraud during COVID-19

The COVID-19 outbreak provides a further smokescreen for fraudsters. Pretending to be legitimate businesses, from charities to your local supermarket, they hope to exploit confusion and the absence of face-to-face contact to gain your money and information.

If you suspect suspicious activity online or have been contacted via email or phone by someone who you think could be running a scam, it’s important that you contact your financial institution immediately to discuss the details.

Source: AMP

With weeks, and perhaps months, of self-isolation ahead, many of life’s conveniences like streaming and delivery services will become our essentials. But if you’re used to spending unlimited amounts to make life that little bit easier, now is a good time to look at what you can live without to make your budget go further.

These days it’s easy to order just about anything on demand. With the tap of a button, you can stream the latest music, have food and drinks delivered to your door and choose a new outfit with next-day delivery. But convenience could be costing more than you realise, with serious consequences for your future financial security. And with the growing number of ‘set and forget’ payments for subscriptions and services consumers are often footing the bill for things even when they’re not really using them.

There are also costs to society and the environment that come with the convenience of online shopping. All that packaging and fuel consumption that comes with home deliveries can really add up to big problems for landfill and climate change.

If convenience is troubling your conscience, as well as your hip-pocket, take a closer look at these five areas where it’s easy to overdo it. Also, get these ideas on what you could do to put some sensible limits on your convenience spending.

1. Entertainment

The convenience of online streaming services has made them essential for many people looking to enjoy entertainment at home and on the go. Unfortunately, free trial periods and automated payment schedules make it easy to forget exactly what you’ve signed up for.

To get a handle on your spending, do an audit of your subscriptions. Check your bank account and credit card statements for the last three-months at least to find any automatic payments. Then select the services you want to be using in line with your entertainment budget. If you don’t have a fixed amount in your budget for entertainment, try limiting it to one service per category.

2. Food and beverages

Consumers splurge a whopping $238 a month (or nearly $60 a week) on food delivery services, research shows, with a further $140 a month on takeaway and coffees.

If you find yourself regularly turning to apps to satisfy your hunger pangs, here are some strategies you can try to limit the splurge.

• Keep healthy snacks with you to curb those cravings when they hit. Things like fresh fruit, nuts and muesli bars can help take the edge off your appetite, so you’re not tempted to hit order when you get too hungry.
• Plan your meals a couple of days in advance, so you know what you’re going to make and can have the ingredients on hand.
• Take an online cooking class. Learning a bunch of fun new recipes can make it easier to enjoy some excitement with your home cooking instead of turning to take-away to add variety to your mealtimes.

Swapping even one home-delivered meal for a home-cooked meal each week really adds up. A saving of just $40 a week would put over $2000 back in your pocket over the course of a year.

3. Transport

On demand transport apps have changed the way we travel. If you live in a big city, chances are you use apps like Uber fairly often. But since the fees come directly out of your account, you may not even realise just how much you’re spending on travel.

There’s also the environmental impact to consider. Each private trip produces much more carbon pollution than public transport. When you weigh up the true cost, is it really worth it?

The answer is simple: when social distancing rules are relaxed you can swap private rides for public transport, walking or cycling wherever you can. There are some great public transport apps around that make it quick and easy to catch a bus or train, so you can still rely on technology to make travel simple.

4. Technology

Apps, games, smartphones, tablets, eReaders… how much do you spend on technology that you don’t even use?

With many devices costing upwards of $1000, delaying that upgrade until you really need it could be a win for your pocket – and for the environment.

App subscriptions are another sneaky expense that really adds up. They may seem inexpensive and often have free trial periods, so it’s really easy to forget what you actually end up paying for. Check your subscription list at least once a month and delete anything you don’t need. Your bank balance will thank you.

5. Easy payment services

Buy now, pay later (BNPL) arrangements have exploded onto the scene in recent years as a popular way to finance a variety of purchases. Figures show that 30% of Aussies have at least one BNPL account, spending around $7 billion a year. Most of that is going on fashion, followed by appliances, entertainment, food and drinks.

But there’s evidence that BNPL services lead to overspending. A full 60% of BNPL users surveyed by Mozo reported purchasing things they normally wouldn’t, thanks to the easy payment instalments.

If this sounds like you, it might be time to step away from Afterpay, Zip and other BNPL services and get back to good old-fashioned saving in order to get what you need.

Is managing your money making your feel overwhelmed? Book a chat with the JBS Financial team here to get some help.

Source: Money and Life

Despite the recent wild ride for markets coping with the uncertainty of the coronavirus pandemic, many investors are well-versed in the need to “sit tight”.

They understand that moving out of positions in falling markets risks crystallising losses at the bottom and missing out on the recovery.

For retirees it’s not so simple, where portfolios are particularly vulnerable to sequencing and behavioural risks that are not so apparent for those in the accumulation phase. If investors continue to contribute to their super fund in the current environment, they are potentially buying into the market at bargain prices every time they receive their salary.

Gains might take some time to materialise and losses some time to overcome, but with a long-time horizon there is more opportunity for an investor’s portfolio to recover.

If, on the other hand, investors draw down on their portfolio they may experience the sharp end of sequencing risk. Losses affect the entire nest egg, a proportion of which will be invested in assets acquired at higher points in the market cycle. In our view, most retirees have less of an opportunity to buy back in and take advantage of the future upside to current low prices. Crucially, most also have no choice but to draw-down to fund their costs of living – meaning they have to liquidate positions in a falling market.

Watching the dollar value of their life savings fluctuating over the course of a single day can be gut-wrenching for retirees, and these emotions are compounded by the ongoing health and societal crises raging around us. The fight or flight instinct is very strong in times like these. In our view, it creates a very strong behavioural risk for retirees who may act against their own best interests by switching out of growth assets at the worst possible time to “protect” what remains of their nest egg.

Shoring up your position without selling the silverware

These two risks create a conundrum for the retiree. On one hand, there is an imperative to reduce their exposure to market falls in order to minimise sequencing risk, and on the other hand there also exists a significant behavioural risk in shifting to lower risk asset classes at this point in time. It’s a tough time to make a decision but investors should be aware of the options available to them. 

Diversify into other value assets

We believe one way to manage risk and lower an investor’s exposure to falling equity markets is to diversify. The key at the moment is to look to other asset classes where discounted pricing might be available, diversifying into areas such as infrastructure, property, credit and other alternatives.

Adjust expenditure

Research shows that one of the most powerful tools retirees have to secure the stability and sustainability of retirement income is to know how much they can safely spend. This depends on many variables such as age, health, social security, wealth – to which a financial advisor can guide retirees. It also might surprise retirees that even a large fall in markets may only require a small adjustment in weekly expenditure to ensure their retirement income lasts. 

Reconsider what is ‘defensive’

The traditional approach to retirement investing is to move further into traditional ‘defensive’ assets such as cash and bonds. We would like to emphasise that while these assets in the short term have the least likelihood of a negative return and therefore could be considered ‘safe’, the future returns of cash and bonds are relatively low. A large allocation to this group may reduce long term returns and jeopardise the sustainability of a retirement income strategy.

Investors stand to lose when they move a large proportion of their assets to defensive positions such as cash and bonds in the current environment, locking in lower returns for their portfolio. It may feel comfortable in the short term, but over the long run it could seriously jeopardise the longevity of their retirement income.

We believe an investor could improve their retirement strategy over time by considering the steps above and always on the basis of sound financial advice.  Start planning the right way for you and book a chat with the JBS Financial team here.

Source: AMP

As lockdown restrictions begin to ease Australia-wide, a new normal is emerging for businesses and employees. Here we explore the roadmap out of lockdown and what lies ahead for our finances.

While it’s too soon to say what the post-lockdown economy will bring, for many Australians life won’t be quite the same as it was before COVID-19.

Record job losses, reduced hours of work and the deferral of dividend payments by listed companies are all set to impact on household budgets in the coming months.

The jobless rate rose to 6.5% in April, which was actually better than many experts had feared. However, hours worked fell by 9.2%, the biggest monthly decline on record; and the under-utilisation rate rose to a record 19.9%.[1]

Commsec chief economist Craig James says unemployment is expected to peak near 10 per cent. But there is some light at the end of the tunnel.

“Provided social distancing is maintained with good hand hygiene and significant COVID-19 testing, there is no reason that a ‘V-shaped’ economic recovery can’t occur as lockdown restrictions ease,” he says.

So what does the path out of lockdown look like? And how can you recover financially if your income has been affected?

Lifting of restrictions

The National Cabinet has agreed a three-step plan to gradually remove quarantine restrictions between now and July. The carefully staged approach involves winding back limits on the size of group gatherings, allowing certain businesses to reopen and permitting sports, recreation and travel to restart.

The first stage will allow group gatherings of up to 10 people; with some retail stores, restaurants and cafes allowed to reopen, provided strict social distancing measures are in place.

Office workers will be encouraged to continue working from home until at least stage three, and have been asked to avoid public transport at peak hour.

For details of what’s allowed at each stage, you can view the complete three-step framework on the Health Department website.

Each state or territory will move through the stages at their own pace, depending on their circumstances, so always consult your local state or territory health department website for up to date information on what’s happening in your area.

The new normal

The relaxing of restrictions is great news for business owners and employees. However, it’s clear that things won’t completely return to the pre-COVID19 normal for some time to come.

Social distancing requirements will continue to have an impact on many businesses, particularly those in retail and hospitality, while gatherings over 100 people aren’t on the cards as yet.

For many workers who’ve been forced to drop hours or accept lower pay, this could mean adapting to life with a reduced income for the foreseeable future.

Stay on top of your financial health

While it may be tempting to splash out after so long in lockdown, try to keep one eye on your longer term financial health. That means, continue building your savings, and avoid taking on more debt where possible.

Take the time for a financial health check, to make sure you can sustain yourself over the coming months and years as the economy returns to growth.

If you’ve been able to maintain your job through the lockdown, now is the time to reach out to your employer for clarity around how they’re planning to approach the easing of restrictions.

If you took reduced hours, find out from your employer whether this will continue and when it’s likely to be reviewed. Many businesses won’t be able to return to their previous levels straight away. So be honest with your employer about how long you’ll be able to sustain yourself financially if the reduction in wages continues past a certain point.

If you were working in an industry that was forced to close during the lockdown, contact your employer and find out whether there’s an opportunity to return to work once they re-open.

Replacing your income

If you’re unable to get your old job or hours back, don’t despair. Now is the time to be flexible and proactive. Review your resume and consider how you could apply your skills to a different industry or role, to widen your opportunities to find work.

Consider taking an online course to upskill into a new or related area. There are many free and low-cost courses available online. Several universities offer Massive Open Online Courses (MOOCS) either through their own websites, or platforms like EdX and Coursera.

Udemy is another platform offering low-cost online courses that are designed and taught by experts in their field. Open Colleges has this extensive list of places offering free online training.

Investigate industries with future growth potential, such as digital and data specialists, healthcare, science and technology.

In the meantime, seek to conserve your cashflow. Contact your service providers and ask to renegotiate bills and/or delay payment until you’re more secure. Speak to your bank about pausing mortgage repayments; or ask your landlord about rent relief.

It will take time for the economy, and indeed our society, to return to previous levels of activity. But if past shocks have taught us anything, it’s that markets and businesses do recover in time. For now, keep an eye on your finances and don’t be afraid to seek help from a financial planning expert if you need it.

If you have questions about your financial health and wellbeing and would like to create a financial plan, speaking to the JBS Financial team. Take a moment to book a time to chat here.

^[1] ABS April employment figures

Source: Money & Life

It’s never a bad idea to have a little help managing your money – and when you’ve got monthly mortgage repayments to make, balancing the books is extra important. There’s a great range of apps and tools designed to help you budget, save and track your finances. And we’ve put together a list of some worth checking out.

Budgeting and Tracking

The formula is pretty simple. To balance your budget you need to know how much you’re spending and what on. One great way to keep close tabs on your financial health – on a daily basis – is by using one or more apps and tools to help.

Pocketbook describes itself as a personal assistant for your financial situation, and can be linked with your bank accounts, credit cards and loans. Once you’ve done that, it will automatically keep track of where your money goes, organising your spending into categories such as loan repayments, groceries, household bills and more.

Moneytree gives you an overall picture of your financial situation; from your bank accounts, credit cards and digital currency wallets (think Bitcoin and the like) to your superannuation accounts and daily spending. The app also keeps track of loyalty points, such as Frequent Flyer points and store reward cards, so you know what you have, when they can be spent and if they’re about to expire.

If you need something that helps you set rules as well as track spending, YNAB (You Need A Budget) has plenty of fans around the world. It’s designed to stop you living from payday to payday so you’re ahead of your bills and budgeting, not trying to catch up.

The digital tool itself requires a yearly subscription, and that sign-up comes with access to online forums, guides and classes that will help you – in the words of its creators – “give every dollar a job”.

Paying Bills

Being late when it comes to paying bills can cost you late fees and potentially impact your credit rating – meaning it could be harder for you when it’s time to apply for a loan.

Apps like Easy Bill Pay are designed to help you stay on top of what’s due and when. You can add your latest bills to the app, schedule regular bills you know will be coming in, and link your bank account to the app. Then, the app will calculate what bills are due in your cycle and pull money from your funding source.

If you’re splitting bills with one or more people – your partner, other family members, housemates – Splitwise can help make sure everyone pays their part. You can assign people to groups, add bills that need to be shared, then nominate who owes what and keep track of who’s paid and when.

“There’s a great range of apps and tools designed to help you budget, save and track your finances. And we’ve put together a list of some worth checking out.”

Mortgage Calculators

If you’re in the market for a mortgage, thinking about becoming a homeowner or considering refinancing, the first step is knowing how much you can borrow – and what your repayments might be. Many lenders provide online calculators to help you work out the details.

NAB provides a suite of tools that can estimate your home loan repayments, suggest how much you can borrow, calculate what you might pay in stamp duty, compare the cost of renting to buying and more. There’s also a tool that can help you decide if debt consolidation is right for you.

And the Australian Government’s Moneysmart site also offers a calculator that can estimate your borrowing power and suggest ways to pay your loan off faster. With some basic details it can give you solid answers in just a few minutes.

Of course, it’s important to remember that these types of calculators and tools should be used as a guide only. It’s always best to consult an expert, like a mortgage broker, for more concrete answers.

Investing

Smart investing can be a good way to diversify your financial situation and exposure to risk, and help your money grow. And there several smart apps and tools available that make being an investor part of your everyday spending.

Raiz is one example that aims to turn everyday Aussies into everyday investors. Money that’s added to your Raiz account is invested into a mix of exchange traded funds, based on which of six pre-determined portfolios you choose. Each offers different types of investments based on your appetite for risk and how long you’re keen to invest.

You can make one-off payments or regular deposits that are invested, but what’s really unique is the way you can invest your spare change. When you make purchases, Raiz rounds up what you spend to the nearest dollar and turns those extra few cents into “micro investments” that are pooled together and can add up quickly over time.

Tax Payments

One way to make sure your financial situation stays in tip top shape is by keeping your tax payments and tax returns always up-to-date. And the ATO has an app loaded with tools and calculators to make things as easy as possible.

The ATOs myDeductions feature means your expense and income records are all in one place, so when tax time comes around you can upload all your deductions into your tax return application, or email your information to your accountant.

Don’t forget that these are just some examples of what’s available, and there may be other apps and tools available that are better suited to your personal situation.  It’s always best to do your research, read the fine print and if you need help with managing your money, reach out to the JBS Financial team here. We can help you develop good money habits.

Source: Your Loan Hub