Market Update – Presented by Shane Oliver AMP Chief Economist

We regularly meet with best of breed fund managers to review, analyse and authenticate their offering with the view to building quality portfolios for our clients. On a quarterly basis we select one of our fund managers to provide a quarterly update for our clients.

Following the end of the quarter we asked Allan Evans from Magellan to provide an economic update on the past quarter.

McQueen Financial Group is a corporate authorised representative of Total Financial Solutions Limited. AFSL No. 224 954, ABN 94 003 771 579

This information is of a general nature only and does not take into account your investment objectives, financial situation or particular needs. You should not act on any information in this report without first consulting a professional investment adviser in order to ascertain whether the information and any investment decision is appropriate. This information is believed to be accurate however no warranty of accuracy or reliability is given in relation to any advice or information contained, and neither TFSA or its Representatives and officers, agents or employees of either of the aforementioned shall not be held liable for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence).

How much does it cost to raise a child in Australia?

How much does it cost to raise a child in Australia?

Raising a child will provide you with countless experiences that money can’t buy. But it is still an expensive business. Here’s your guide to the likely cost of raising a child in Australia.

With over 300,000 babies born in Australia every year according to the Australian Institute of Health and Welfare, more and more families are adapting to life with little ones. We run through a few of the big milestones to help you calculate the likely cost of kids.

Parental Leave

Generally, the financial impact of having a baby begins before it is born. A fantastic first step for any parents-to-be is to think about parental leave – how much would you like to take and how much could you afford? After all, your little bundle of joy won’t just cost money to look after, you’re also likely to receive a reduced income from one or both parents depending on the arrangements you choose to make.

One simple way to start planning is to use ASIC’s parental leave calculator to establish your likely income over the course of parental leave. You can change the parameters of the ASIC calculator to assess how your earnings could be affected by taking more or less time off.
Child care

For many parents, going back to work after a maternity or paternity break can be a difficult decision, but it’s usually financially necessary for one or both parents to resume their employment.

Returning to work will likely mean that the household income is increased, but when figuring out when to take the leap, consider the likely cost of child care for your little ones. There are a number of different types of child care to consider, as CareforKids.com.au outlines, all range significantly in cost. As well as listing approximate costs on the website, CareforKids.com.au also has a tool to help you calculate the approximate cost of your preferred type of child care.

There are government benefits available for families. To find out more and to learn about what benefit may apply to you, check the Australian Government’s Family Assistance Guide.

Education

Giving your child a great education is top of the list for most parents, and whether your child attends public or private school, the ongoing cost of education is something to keep in mind.

Aside from any tuition costs, there are also uniforms, sports clubs, school trips and lunchboxes to think about.

Ultimately, the cost of education depends on a number of factors, so if you’d like to find out more about your situation ASIC’s MoneySmartsite has plenty of information on calculating how much your family may need to save.

Living Expenses

Finally, there are the everyday living expenses to consider. Research by ASIC in 2015/2016 suggests that the average couple without children spends $1,572/week to $1,833/week when the couple has children under five, and $2,085/week once the children are between 5-14 years old.

Holiday costs increase too, with the average family in Australia saving $77 per week for their next trip away, according to the same ASIC research.

Having children is the most remarkable and fulfilling experience, but it’s also a huge amount of responsibility. Talk to us and we can help ensure you have properly budgeted and planned your finances into the future to make sure that you are prepared and confident to raise a child.

This article was originally posted here:

https://www.aiavitality.com.au/vmp-au/latest_news?selDate=&article=planning_on_a_new_years_revolution

McQueen Financial Group is a corporate authorised representative of Total Financial Solutions Limited. AFSL No. 224 954, ABN 94 003 771 579.This information is of a general nature only and does not take into account your investment objectives, financial situation or particular needs. You should not act on any information in this report without first consulting a professional investment adviser in order to ascertain whether the information and any investment decision is appropriate. This information is believed to be accurate however no warranty of accuracy or reliability is given in relation to any advice or information contained, and neither TFSA or its Representatives and officers, agents or employees of either of the aforementioned shall not be held liable for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence).

Planning on a New Year’s revolution!

Planning on a New Year’s revolution!

It happens every 31st of December. Millions of people all over the world promise themselves to improve at least one important aspect of their lives and make it their New Year’s resolution to do so.

The most popular resolutions remain unchanged year after year, drawn from a list that includes getting fit, reducing stress and importantly, saving money so that you can reach your dreams sooner. Sound familiar?These are all important and worthwhile goals, but here’s the sad thing. Research indicates that by January 7th, 25 per cent of these resolutions will already be broken. And this attrition rate will continue, so that up to 80 per cent are likely to have been abandoned within two years.So how can you make sure that you will be one of the minority who do not break their New Year’s promise to themselves?

Perhaps the answer lies in our word choice. Rather than making a resolution which can be defined as ‘a firm decision to do or not do something’, why not aim for a revolution, ‘a sudden, complete or marked change in something’. The difference here is between thought and action. And actions when repeated become habits. Good habits achieve goals.

 

Crucial steps

Your first step will be deciding how you will make the time to achieve the change you want, because if your life is already overcommitted you are more likely to fail than to succeed.

If your day is already overcrowded, for example, it is unlikely that you will find the extra 30–60 minutes each day to jog, swim, ride a bike or go to the gym unless you drastically reorganise things.

Secondly, you’ll need to research how you’ll reach your goal long before New Year’s Day. Don’t promise yourself to start spending less from the first of January and then do nothing about it until your credit card bounces at the Boxing Day sales. Investigate budget templates now, and review your past few month’s spending patterns (there are heaps of apps to help with this), this will put you in the best possible position to make sure your revolution sticks.Thirdly, use this research to create an informed plan with measurable outcomes. This way, you’ll be able to hit the ground running come January first.

 

Revolutions take time

When you think of the great revolutions throughout history, they are often painted as sudden regime changes, overnight shifts in popular thinking. But remember the revolution itself is just the tipping point. Usually the ideas driving the change have been fermenting for a long time. And the hard work that comes with establishing a new system endures long after the revolt.Your New Year’s revolution will be the same. January first is the tipping point, but the momentum behind your revolution may have been a long time coming and the hard work will continue long into the New Year. So be patient and kind to yourself and forgive any lapses, stay focused on your goal and you will get there.Finally, tell all your friends about your revolution so you can earn their praise if you succeed and feel their scorn if you fail — peer pressure is a powerful incentive! And revolutions rarely work without the support of the people. This is particularly important if your goal is a budgetary one, as direct but sensitive communication around money is key to avoiding financial stress.As you can see, the difference between wishful thinking and real behavioural change is commitment and a plan, and this is never more important than when planning a brighter financial future. If you need help reaching your goals in the New Year, give us a call. We’re always here to help.

 

Keys to an achievable revolution

Simple. You should be able to state your cause in one sentence. E.g. to save enough for a house deposit

Tangible. Make your goals quantifiable and specific. E.g. I will put away $500 a month towards my deposit

Shareable. Tell everyone about your goals, this will make you accountable to them.

 

This article was originally posted here:

https://www.aiavitality.com.au/vmp-au/latest_news?selDate=&article=planning_on_a_new_years_revolution

McQueen Financial Group is a corporate authorised representative of Total Financial Solutions Limited. AFSL No. 224 954, ABN 94 003 771 579.This information is of a general nature only and does not take into account your investment objectives, financial situation or particular needs. You should not act on any information in this report without first consulting a professional investment adviser in order to ascertain whether the information and any investment decision is appropriate. This information is believed to be accurate however no warranty of accuracy or reliability is given in relation to any advice or information contained, and neither TFSA or its Representatives and officers, agents or employees of either of the aforementioned shall not be held liable for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence).

 

How to Budget during the Silly Season

How to Budget during the Silly Season

The Christmas holiday period is one of the hardest times of the year to stay within your budget, with presents to buy and parties to attend and host your spending can easily spiral out of control. This is why they call it  the “silly season” because people do silly things at this time of year which they may wind up regretting. Last year alone Australians spent over $45 billion on retail in the period leading up to Christmas and this year the total is likely to be even more.

So where does all of this money get spent? The holiday period sees a drastic increase in money spent on books, tech and gadgets, clothing and alcohol. Many people feel pressured to overspend at Christmas so they can buy presents for all of the people in their lives and attend all of the parties and drinks they get invited to. Where do people find the money to spend on these extra expenses? Sadly, a significant portion of people use credit cards and other forms of credit in order to pay for Christmas and the holidays. This can mean that you enter into the New Year in debt and already on the back foot for another year.

There are a few simple steps you can take to ensure that this holiday’s fun doesn’t turn into next year’s financial pain. The first and most important step is to budget, know much how much extra cash you have to spend and stick to it. Ideally you should begin budgeting for Christmas all throughout the year, putting a little extra money aside every now and then. This will ensure that when the holiday’s roll around for another year you won’t be caught out financially. Unfortunately most of us aren’t that organised but that doesn’t mean you need to have a financially irresponsible ‘silly season.’  For example, although you may want to buy expensive gifts for love ones, buy them gifts you can afford. They will still appreciate it and understand that you are doing the best you can.

Secondly, avoid spending on credit cards as much as you possibly can. On average Australians get into 10% more debt in December compared to November. Credit cards simply defer the problem of having to pay until a later date and with high interest rates and fees you can wind up paying far more than you would have if you had paid up front. Instead use cash to buy your presents or go for a night out. This way you know when you’ve spent all of the money you can afford and won’t fall into debt during the holiday season.

Thirdly, look out for handy tips on ways to avoid overspending during Christmas. For example, instead of giving each family member a present you could organise a Secret Santa or set a spending limit for presents among your family and friends. This way Christmas will remain fun but you won’t have to spend more than you can afford.

These are just a few tips to help you have a sensible Christmas and holiday period without it turning into “silly season” for your finances. This time of the year shouldn’t be an excuse to blow out your budget and fall into debt. If you stay mindful of this and follow these tips you can still have a great Christmas holiday without the New Year’s hangover for your finances!

McQueen Financial Group is a corporate authorised representative of Total Financial Solutions Limited. AFSL No. 224 954, ABN 94 003 771 579.

This information is of a general nature only and does not take into account your investment objectives, financial situation or particular needs. You should not act on any information in this report without first consulting a professional investment adviser in order to ascertain whether the information and any investment decision is appropriate. This information is believed to be accurate however no warranty of accuracy or reliability is given in relation to any advice or information contained, and neither TFSA or its Representatives and officers, agents or employees of either of the aforementioned shall not be held liable for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence).

How will the Government’s childcare changes affect your family?

Packing lunches, changing their clothes, coordinating the pick-up and the drop-off, weighing up the cost of childcare and the rewards of going back to work – it can be tough enough simply being a parent, let alone deciphering childcare funding reform. The good news is we’ve done all that for you, so that you and your family can prepare.

 

What’s changing?

From 2 July 2018, Commonwealth support for childcare costs will be delivered via a single, means-tested subsidy.

Under the current system, the Child Care Benefit (means-tested) is usually paid directly to the approved childcare service provider. The Child Care Rebate (not means-tested) is either paid to the family’s bank account, or through childcare service providers as a fee reduction,” she says.

From July 2 all of the subsidy will be going to the childcare centre and the family is just going to have to pay the gap fee.

 

Impact on different families

Low to middle-income families with two working parents will benefit most from the changes.

Average assistance for low-income working families (those earning up to $65,710 combined), who meet the activity test, will rise from 74% to 85% of the fee.

Wealthy families earning more than $350,000 are set to see the largest decrease. Under the old scheme they received up to $7,500 in annual rebates per child. Soon they’ll receive none.

Here’s a breakdown of the thresholds:

Combined Family Income Subsidy % of the actual fee charged (below the hourly fee cap)
Up to $65,710 85%
> $65,710 to < $170,710 Tapering to 50%
$170,710 < $250,000 50%
$250,000 < $340,000 Tapering to 20%
$340,000 < $350,000 20%
$350,000 + 0%

For families earning more than $180,710, an annual subsidy cap of $10,000 per child will apply.​

 

Estimate the impact on your family

To get a picture of exactly what these changes will mean for your family, and to model different scenarios, head to the Australian government’s Family Child Care Subsidy Estimator.

It generates a subsidy estimate after considering:

  • family income
  • hours of eligible activities (working, training, studying or volunteering) per fortnight
  • number of children in care
  • care type (centre-based, family day care, or outside school hours care)
  • hours in care
  • associated session or hourly fees

 

Prepare

Once you know what kind of the subsidy you can expect, work out what your new gap fee might be – will you be paying more or less out-of-pocket?

If you fall within one of the higher income brackets it may be particularly important to start considering the impact on cashflow.

Your budget will need to be looked at closely and altered to include the gap-fee you’ll be paying under the new subsidy.

 

Action

If you haven’t already it is now time to take action to ensure that if you are entitled to the subsidy you will begin receiving it from July 2.

  1. Log into www.my.gov.au
  2. Access your centrelink profile
  3. Complete your assessment online (this will include information about your income, hours of work/study/ voluntary activity and the hours of childcare you have your children enrolled in).

You will then be assessed for the subsidy and advised by centrelink of your entitlements.

McQueen Financial Group is a corporate authorised representative of Total Financial Solutions Limited. AFSL No. 224 954, ABN 94 003 771 579

This information is of a general nature only and does not take into account your investment objectives, financial situation or particular needs. You should not act on any information in this report without first consulting a professional investment adviser in order to ascertain whether the information and any investment decision is appropriate. This information is believed to be accurate however no warranty of accuracy or reliability is given in relation to any advice or information contained, and neither TFSA or its Representatives and officers, agents or employees of either of the aforementioned shall not be held liable for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence).