Each year in early May, the Treasurer delivers the Federal Budget and many people across Australia listen intently. The Budget tells us how the government intends to spend its revenue in the coming year, whether it can afford to give us tax cuts, and whether it expects to spend more (deficit) or less (surplus) than it receives.

Budgets are also important on a personal level, especially when living costs are rising and uncertainty abounds in global financial markets. So it’s worth having a look at how we’ll cope with the increasing cost of living. 

Save more or spend less?

Is it easier to save more, or to spend less?

They might sound like the same thing. After all, saving is what we do with whatever’s left over after spending, isn’t it? 

Well, not quite. You see, it’s easy for spending to get out of control, and many people actually find it easier to focus on reducing their spending than saving towards a goal. 

Take control

To begin with, work out where your money goes. Start by keeping track of everything you spend and what you spend it on. Split it into categories based on necessity. Things like mortgage repayments, utilities and essential food obviously go in the ‘must spend’ group. Some things will be ‘optional but important’, and others will fit into the ‘frivolous’ category. 

Do I really need this?

After a few weeks you’ll have an idea of where your money is going then it’s time to start asking yourself a couple of questions:

• Do I need to spend this much on this category?
• When I over-spend, what can I do to prevent it happening again?

It’s worth remembering that every year in Australia we spend billions of dollars on food we don’t eat, clothes we never wear and services we don’t use. So for many people, gaining control over spending doesn’t mean ‘doing without’, it just means being sensible about spending. There are a lot of things you can enjoy for free, and you can even turn a ‘thrift campaign’ into a hobby.

Watch debt 

Pay off credit cards within the interest-free period to avoid high interest costs. If that’s not possible, investigate consolidating high-interest debt into home loans or other lower cost loans. When borrowing, make sure you leave a ‘comfort zone’ to ensure you can meet your commitments. 

Talk to us about preparing a personal budget that doesn’t require you to do without or give up everything you love.
Call (02) 4926 2300 or email. 

To discuss your budget and how you can better manage your finances, please do not hesitate to contact the expert and friendly team at Leenane Templeton. 

The post How’s your budget – surplus or deficit? appeared first on Newcastle Financial Planners & Financial Advisors.

After Kylie completed university and had landed a well-paying job, her only plan was to enjoy her new financial freedom. She had living to do – the future was a long way off and would take care of itself … wouldn’t it? 

Kylie’s first purchases were a trendy new hatchback car and expensive clothes suitable for climbing the corporate ladder. Enjoying her exciting lifestyle, she regularly visited restaurants and bars, and took an overseas holiday each year.

According to research conducted by Impact Leaders, Kylie’s way of life is common with one third of 18–34 year olds having no savings and excessive debt. 

It’s understandable, after all, when you’re in your twenties and early thirties, thoughts of saving for a home, much less retirement, are easily put aside. But time has a nasty habit of getting away from you – just ask your parents!

A survey by Leading Edge Trends, found that the majority of 18–24 year olds won’t own their own home by retirement, fostered by a ‘buy now, pay later’ mentality. The result is that many will be excluded from home ownership, while others will struggle with late-life mortgages and financial insecurity at retirement. 

Back to Kylie. 

A few weeks after returning from a holiday around Europe, Kylie was informed that her position at work had been made redundant. With no savings behind her, she borrowed from her parents to pay her rent and other regular bills.

Shortly after, Kylie was forced to sell her car and use her credit card to manage everyday expenses.

Fortunately, within six months Kylie found a new job, again with a good salary, but during her brief period of unemployment she’d racked up considerable debt. A large portion of the new salary would go towards her debts. It would take years to recover. 

What can you do to ensure your story doesn’t end up like Kylie’s?

Savings – a savings plan doesn’t mean restricting yourself. Even small amounts deducted directly from your wage quickly add up and can become a future home deposit or a safety net for emergencies.

Budget – sounds boring, but a realistic budget can help you to live within your means without relying on credit or feeling like you’re missing out.

Income protection – an insurance policy that pays an income if you’re injured or become too ill to work – an important consideration for young people starting out on a big career!

Get advice – not just for older or well-off people, a financial adviser helps you to create your budget and savings plan so you can take advantage of enjoying life now. 

You might not be interested in buying a house just yet, but how cool would it be if the money were available when you were ready? 

You’ll probably be surprised at how inexpensive advice is. Contact one of Leenane Templeton’s licensed financial advisers to find out how your future can gain a head start.

Call (02) 4926 2300 or email us. 

The post Take advantage of the NOW! appeared first on Newcastle Financial Planners & Financial Advisors.

Whilst there were no significant taxation proposals in this year’s Budget, the Government has made some relatively conservative changes to FBT exemption and employee share schemes.

FBT exemption for electronic devices

To help reduce red tape, the Government will expand the Fringe Benefits Tax (FBT) exemption for work-related portable devices from April 1 2016. Small businesses with an aggregated annual turnover of less than $2 million that provide employees with more than one qualifying work-related portable electronic device will still be able to access the exemption.

Additional items that have substantially similar functions as the first device, will still be allowed on the condition that they are used to perform different tasks. Small business employees will benefit by staying connected in the digital economy.

FBT: meal and entertainment

A $5,000 grossed-up cap will be introduced for salary sacrificed meal entertainment and entertainment facility leasing expenses for employees of not-for-profit organisations from 1 April 2016. The cap previously sat at $30,000, allowing charities and other similar groups to compete with the private sector for the attention of prospective employees. Not-for-profit employees can now salary sacrifice meal entertainment benefits without reporting them. In addition, their employers will not have to pay fringe benefits tax.

Employee share schemes

Expanded tax concessions for employee share schemes from 1 July 2015, will allow employees to share in and gain from the future growth and success of the business.

The new start-up concession ensures employees are not liable to pay tax up-front until they are able to grasp a benefit from the share options.

Other measures

The Government tightened access to pension payments as a result of decreases in the assets test. The maximum value of assets outside the family home a couple can hold while still qualifying for a part pension will be reduced from $1.15 million to $823,000. Pensioners with substantial private assets will have to draw on slightly more of their assets to maintain their current income levels of retirement.

The asset test taper rate will be increased from $1.50 of pension per fortnight to $3 of pension for each $1,000 of assets over the relevant assets test threshold from 1 January 2017. It will allow those with moderate assets to receive a full or increased pension.

Call (02) 4926 2300 or email us.

Our accountants are ready to answer any questions you may have in relation to your personal tax matters and the 2015 federal budget. Call the team at Leenane Templeton today!

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The 2015 Budget made sweeping changes for individual taxpayers and families with its focus on improving the economy.

Car expense deductions

The Budget has introduced new modernised methods for calculating work-related car expense deductions from the 2015/16 income year. The ‘12 per cent of original value method’ and the ‘one-third of actual expenses method,’ which are used by less than 2 per cent of those who claim work-related car expenses will be removed.

The ‘cents per kilometre method’ will be modernised, allowing workers to claim a deduction for each kilometre driven in the car for work based on a schedule of typical costs. Under the new regime, one rate will be set at 66 cents per kilometre to apply for all motor vehicles. Taxpayers can continue using the ‘logbook’ method of calculating expenses if they do not want to use the cents-per-kilometre approach. These changes will adjust car expense deductions to align with the average cost of running a car.

Pensioners

The plan to index the pension to the Consumer Price Index has been axed. Instead, the Budget will be making the savings from people with substantial private assets.

Ageing workers

A flexible wage subsidy will give older Australians approaching retirement an incentive to remain in the workforce with the possibility of receiving a bonus later. It will also shorten the length of time Australians over the age of 50 have to wait on income support or the pension before they qualify for job incentives.

Amendments to the new Restart program will offer older workers incentives for training to further assist them with retraining for a job and prevent them from falling back on unemployment benefits or pensions.

In addition, employers who hire job seekers under the age of 30 or workers aged 50 or older will share in a redesigned national wage subsidy pool from 1 November 2015. Eligible employers will be granted a subsidy of up to $6,500 for hiring a job seeker under the age of 30, an indigenous job seeker, a parent returning to the workforce, or a long-term unemployed job seeker. They can also receive up to $10,000 under the Restart program for hiring workers aged 50 or older.

Families

The childcare scheme has received a major overhaul to support low income families. Families with access to maternity leave through work will no longer receive government assistance in the form of the existing Parental Leave Pay (PLP) scheme from 1 July 2016. This measure will prevent families from double dipping into both schemes.

Under the new proposals, both parents must do at least eight hours a fortnight of work, training or study to qualify for any childcare support. Families earning up to $65,000 will receive 85 per cent off childcare fees, while stay-at-home parents with a family income over $65,000 will no longer secure childcare subsidies.

A two-year nanny trial starting on 1 January 2016 will assist the parents of approximately 10,000 children, especially those working for emergency services or living in regional areas, without access to regular childcare services.

Rural Australia

Farmers can continue the Drought Concessional Loan Scheme for another year. Farmers will also be able to claim fences and new water storage as tax write-offs.

Call (02) 4926 2300 or email us.

To discuss the 2015 budget and how it will affect you, please do not hesitate to contact the expert and friendly team here at Leenane Templeton.

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With the holiday season fast approaching, it’s tempting to throw out the year’s careful planning and budgeting to splurge in the name of Christmas. But getting into the Christmas spirit doesn’t mean you have to get into debt. Follow these tips on how you may be able to emerge in the New Year debt-free.

Set a budget

First take some time out to review your current finances. Determine how much you can realistically afford to spend without getting into the red. Remember to include gifts and entertainment as well as all the small things that come with the season like cards, stamps, decorations, food and travel. Next make a list of everyone you plan on giving a gift to and decide how much you want to spend on each person. Finally check that the total figure you want to spend is not beyond your budget. You may need to reduce the amount you’re able to spend on each person or reassess the number of people on your list.

Start early

Before you know it, Christmas will be upon us. In fact, the department stores have already started spruiking their Christmas wares. By shopping early, you can look out for sales and great deals for later in the year. You also have time to comparison shop rather than last-minute shop; where your panic to pick up something (anything) will usually mean spending more.

Look for savings and incentives

If you choose to use your credit card, look for any rewards or discounts that may be available through your credit provider.

Also try to shop online first as you’re less likely to impulse shop and can easily compare prices across various websites. There are plenty of online retailers that offer savings across a number of product categories such as fashion, skincare, make up, fragrances, books and electrical appliances. You can also find discounts through online community classifieds, auctions and daily deal sites.

Remember who you’re shopping for

When you’re shopping for family and friends, it’s very easy to find things which will be just perfect for you. This is a very common mistake which is sure to break your budget. Christmas shopping isn’t a ‘one for you, one for me’ deal. Don’t buy it. If you really need to have it, wait until after the holidays when it’s more likely to be on sale.

Stick to your budget

Remember that a deal is not a deal if you can’t afford it. Once you reach your budget limit, stop.

Save early

Get off the overspending merry-go-round by saving early for next year. As soon as the holiday season is over, determine next year’s Christmas budget and set up automatic direct debits into a dedicated Christmas savings account. You’ll be all set by the time the department stores bring out their tinsel again.

Source: IOOF, October 2014.

If you’d like more advice on how to manage debt and build a savings plan, speak to one of our financial planners today.
Call (02) 4926 2300 or email us.

Leenane Templeton accountants and financial planners are her to help with any questions you may have on debt and staying debt free, especially over the Christmas period.

The post All I want for Christmas is to survive debt free appeared first on Newcastle Financial Planners & Financial Advisors.

Many young people in the X and Y Generations are earning excellent incomes but have little savings, excessive debt and consider the future too distant to be of concern. This article uses a case study to explain how you can plan your future without sacrificing your current lifestyles.

Case Study

After Kylie completed university and had landed a well-paying job, her only plan was to enjoy her new financial freedom. She had living to do – the future was a long way off and would take care of itself … wouldn’t it?

Kylie’s first purchases were a trendy new hatchback car and expensive clothes suitable for climbing the corporate ladder. Enjoying her exciting lifestyle, she regularly visited restaurants and bars, and took an overseas holiday each year.

According to research conducted by Impact Leaders, Kylie’s way of life is common with one third of 18–34 year olds having no savings and excessive debt.

It’s understandable, after all, when you’re in your twenties and early thirties, thoughts of saving for a home, much less retirement, are easily put aside. But time has a nasty habit of getting away from you – just ask your parents!

A survey by Leading Edge Trends, found that the majority of 18–24 year olds won’t own their own home by retirement, fostered by a ‘buy now, pay later’ mentality. The result is that many will be excluded from home ownership, while others will struggle with late-life mortgages and financial insecurity at retirement.

Back to Kylie.

A few weeks after returning from an African safari, Kylie was informed that her position at work had been made redundant. With no savings behind her, she borrowed from her parents to pay her rent and other regular bills.

Shortly after, Kylie was forced to sell her car and use her credit card to manage everyday expenses.

Fortunately, within six months Kylie found a new job, again with a good salary, but during her brief period of unemployment she’d racked up considerable debt. A large portion of the new salary would go towards her debts. It would take years to recover.

What can you do to ensure your story doesn’t end up like Kylie’s?

Savings – a savings plan doesn’t mean restricting yourself. Even small amounts deducted directly from your wage quickly add up and can become a future home deposit or a safety net for emergencies.

Budget – sounds boring, but a realistic budget can help you to live within your means without relying on credit or feeling like you’re missing out.
Income protection – an insurance policy that pays an income if you’re injured or become too ill to work – perfect for young people starting out on a big career!

Get advice – not just for older or well-off people, a financial adviser helps you to create your budget and savings plan so you can take advantage of enjoying life now.

You might not be interested in buying a house just yet, but how cool would it be if the money were available when you were ready?

Source:
www.abc.net.au Gen Y has little understanding of financial planning, struggles with debt: study (Lucy Carter 20 Nov 2013)
www.moneysoft.com.au Bridging the Generation Y Gap (Elias 24 Apr 2013)

You’ll probably be surprised at how inexpensive advice is. Contact a licensed financial adviser to find out how you can plan your future and gain a head start.
Call (02) 4926 2300 or email us.

Disclaimer

To speak to a financial planner about how you can plan your future and save call Leenane Templeton today!

The post Plan your future – Take advantage of the NOW! appeared first on Newcastle Financial Planners & Financial Advisors.

Australians have an extraordinarily high level of consumer debt, and we don’t like reducing it. For example, the number of credit card transactions in just the month of June 2014 was over 170,000,000 compared with only 24,484,000 repayments – that’s 145,500,000 more transactions than repayments (yes, that’s in millions)! Of course this means interest is accruing on unpaid credit cards literally by the second– at the time of writing it is almost $6,000,000,000 per annum (yes, that’s in billions)! You can see why banks LOVE credit cards!

Please don’t misunderstand; properly managed debt can be a great tool. Most people need it to help them purchase their first house and other necessities in life.

It is also very important in investment planning, enabling you to purchase income-producing growth assets, such as shares or property, to boost your long-term wealth. In this case the interest may also be a tax deduction.

The problem arises when debt is used for basic living costs or purchasing depreciating assets. This is further aggravated when the interest rate applied is too high and there is no planned debt reduction program in place. When interest rates increase most people focus on their mortgage rate and forget that the interest on their credit cards sneaks up too. Most major cards are charging around 18-20%pa with many customers paying little more than the minimum amount and sinking further into debt.

If you are not paying off your credit cards in full every month, have other high interest loans, or your current level of debt is keeping you awake at night, you need to seriously consider your financial direction. Follow this simple plan and take control of your debt before it takes control of you…

1. Restructure your debt by consolidating what you owe at the lowest available interest rate. Keep ONE credit card and cut up the rest!
2. Seek professional help from a financial adviser to plan your financial goals and how to achieve them.
3. Prepare and keep to a budget to ensure your cost of living is within your means and put a debt reduction program in place.
4. Beware of “interest free” offers and make sure you can afford to pay off the entire balance by the end of the contract. A lot can happen in 50 months so don’t get behind on your payments.
5. Ensure new loans are only for a productive purpose, such as investing, and can be justified by potential future profit.
6. Avoid the mental attitude of “keeping up with the Joneses” – the laugh will be on them when the debt collector turns up at their door!

All of the above steps will make for a much easier life in future years … not to mention sleeping better every night.

Note:
Current credit card figures from go  www.rba.gov.au/statistics/tables go to Payments System and download the C1 Credit & Charge Card statistics spreadsheet.
Total interest figure from: https://www.moneysmart.gov.au/borrowing-and-credit/credit-cards/credit-card-debt-clock.

Sources:
www.rba.gov.au Credit and charge card statistics as at September 2013.
https://www.moneysmart.gov.au/borrowing-and-credit/credit-cards/credit-card-debt-clock
http://www.canstar.com.au/credit-cards/compare-everyday-spender/

Disclaimer

Our financial advisors are available to help with any questions you may have as to how you can control your debt and better manage your finances.
Call (02) 4926 2300 or email us.

The post Control your debt before it controls you appeared first on Newcastle Financial Planners & Financial Advisors.

It is now 3 months into the 2014/15 financial year and the hours you spent setting your annual budget are probably a distant memory, but now it’s time to get your budget out again and review your progress since 1 July.

A budget is a living document. It is the underlying tool that sets the direction of your business… your guide to success.

Printing off your Profit & Loss report at the end of each month and doing an actual-to-budget comparison will help you focus on areas that might need your immediate attention. Maybe revenue on a certain product or service is down, or your expenses have blown out in a particular area. Being aware of this on a monthly basis means you can deal with it immediately and employ strategies to remedy any variations. Leaving it until the end of the quarter, the half year or the year will not give you as much control, placing extra stress and strain on you and your staff.

If you have been putting it off, don’t waste another minute… get your budget out of the drawer, print off your current financial statements and start comparing.

Take control and guide your business to the success you deserve.

Our accountants and financial advisors are at hand to discuss any business budget enquiries you may have.
Phone (02) 4926 2300 or email us.

Disclaimer

If you would like to discuss your business budget, please do not hesitate to contact the team at Leenane Templeton.
 

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Is debt ruling your life?

Student debts, credit cards and personal loans can be a source of unnecessary stress and prevent you from enjoying other things in life. Clearing your debts doesn’t have to be hard work. With the right advice, it’s possible to get your finances on track sooner than you think, meaning you can get back to living the good life, guilt free.

Here are some tips to help you get out of debt.

Plan your budget

Achieving your goal of being debt free doesn’t have to be daunting; a good way to start is with a budget. Keep a diary of your expenses and your spending. This will enable you to track where your money is going and how much spare cash you can use to attack your debt.

Pay extra

Try paying more than the minimum off your debts to bring your loan down faster. Prioritise all your debts by the interest rate you are paying. Try to get the balance down on high interest debts fi rst, as paying these off fi rst will save you more money. You can then use the money you save in interest to pay off your lower priority debts.

Consolidate

Consolidate all your higher interest debts into one lower interest debt. This could be in the form of a low interest rate credit card or a personal loan. This strategy will also reduce your interest repayments.

Ensure you have the right card

Due to the increased level of competition in the credit card space, many lenders are offering much lower interest rates and deals.

When doing your research, make sure you read the fi ne print, as cards offering low or zero interest rates on balance transfers, do so for a limited time only whereas other cards might offer a low interest rate for the life of the transfer.

Become card free

Once you have selected a low interest rate card to transfer your balance, make sure you don’t use that card for any new purchases until you have paid off the full amount from the initial transfer.

Take the first step

If you’re having difficulties repaying your debt, take the first step and speak to your lender. If you’re open and honest with your lender, you will probably find they are open to review your repayments and look at other solutions to help you out.

Speak to a professional

If you feel that you are struggling with your finances, speak to Leenane Templeton's financial planner for help with a financial strategy that can get you back on track. Call us today. Also feel free to 'Like' us on Facebook for additional blogs, posts, event information and more.

Source: IOOF, January 2013

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The new financial year is a perfect time to make some resolutions to improve your financial health. If you create simple and easy-to-follow resolutions you will be more likely to succeed. To start, you can ask yourself the following questions:
• What do I really want to change?
• What are the benefits of making changes?
• What steps do I need to take to make changes?
• What will stop me from making positive changes?
• Are my changes realistic and long term?

This article lists some simple, easy-to implement resolutions you could take on for the new financial year.

Keep your receipts

The most common reason people don’t take advantage of tax deductions when they file their tax return is simply because they don’t keep receipts. While keeping receipts for big ticket items is necessary, you don’t always need a receipt for the smaller items such as stationery and books.

Create a budget

Achieving your financial goals doesn’t have to be daunting; a good way to start is with a budget. Try to keep a diary of your expenses and your spending. This will enable you to track where your money is going and how much spare cash you can use to either attack your debt or build investments.

Cut your spending

Look at cutting unnecessary expenses. This could be as easy as making your lunch or coffee at home, cutting out optional extras such as lottery tickets or taking public transport instead of driving.

Pay extra

Try paying more than the minimum off your debts. Whether it’s personal loans or credit cards, paying the minimum will hardly make a dent as you will only be paying off the interest.

Increase your savings

Set aside a little bit of extra money each day, week or month. If you can save just $10 a day, you will have an extra $3,650 at the end of the year. You can talk to your employer about getting it automatically deducted from your pay – if you don’t see it you are less likely to miss it.

Contribute to your super

Think of the long term and your lifestyle when you retire. One way to increase your retirement savings is through salary sacrificing some of your pre-tax salary.
This will not only help to increase your super savings but could also reduce the amount of tax you pay.

Seek professional advice

Your financial adviser will help you keep to your resolutions and make sure your financial strategy is appropriate for the year ahead.

Contact the Team at Leenane Templeton to discuss your financial position and goals. Please call (02) 4926 2300. Like us on facebook and keep an eye out for blogs, events and workplace culture.

Source: IOOF, May 2013

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