Financial Literacy

Have you ever felt uncomfortable because you just don't understand the terms, jargon or slang of the finance world? Have you ever been put down or made to feel inadequate when speaking about money? Read further to become more financially literate!

Time to reorganise your sock drawer

Katherine Hann | 14-Feb-2019

Lost Super

Over 105,000 superannuation accounts representing $860 million were consolidated by Australians in the last quarter of 2018.

However, there is still over $17.5 billion in lost and unclaimed super.

Marie Kondo’s “Tidying up’ seems to be a hot topic at the moment, so before you spend too much time re-organising your sock drawer and kitchen cupboards this summer, take a few minutes to tidy up your superannuation.

While there won’t be any insurance in your lost super account, before you go and consolidate all of your super make sure that you don’t lose your current insurance in any other super account by consolidating without being aware of the consequences.

It is a good idea to talk to your financial planner to organise the best place for your super that is tailored specifically to you.

 


What the statistics say about Personal Insurance Payouts

Katherine Hann | 30-Jan-2018

Stories relating to claims not being paid out are common in the media, and are often a cause for people opting out of personal insurance.

ASIC (the Australian Securities and Investments Commission) who is the watchdog of the financial services sector conducted their latest review into the industry in 2016, and have presented us with the facts.

ASIC's review examined 15 insurers covering more than 90 per cent of the market. Please see the infographic here and a summary of their findings here.

The most common types of disputes were about the evidence insurers require when assessing claims, and delays in claims handling. 

However, it was found that 90% of claims were paid out.

Of the delays and claims not paid out, most were direct or group insurance policies where no financial advice was provided. 

If you need insurance and you need to filter through which insurers give you the best options for your personal situation, it is worth seeking advice. Insuring yourself is important, make sure you have the right insurance and a financial adviser that can help you at claim time.

If you want to talk to someone about insurance or have any questions please give me a call on 8299 9927 or email katherinehann@internode.on.net

Reservations I Hear About Financial Planners

Katherine Hann | 23-Jan-2018

 

I hear some people are uncertain about advisers, and often the same sorts of comments pop up. So I’d like to take this opportunity to respond to some of these reservations people have about the financial planning process.

 

Here are just 3 that I have heard.

 

1. They are only ‘worth it’ for wealthier clients because they are expensive.

My clients have a very wide range of incomes, and I offer services that benefit people in different wealth categories. How much I charge depends on what you want me to do. I will always tell you the amount it will cost you before I make any recommendations. Just think about an accountant- a simple tax return can be very inexpensive but to have that accountant help you with business accounting, SMSF’s or just complex accounting in general could cost you a lot more.

 

2. They just try to put me into one of their superannuation funds and they have really high fees.

The name of the superannuation fund you are invested in is irrelevant- you need to be invested in the assets that are right for you. Fees and returns often depend on what you are invested in. I make a recommendation simply based on what is best for you. Returns can’t be guaranteed as they depend on what the markets are doing.

 

3. I already know how to save money for retirement/invest. 

Many people do OK on their own. They may be able to budget well, organise their super or invest on their own. However, they might just want advice because something has changed in their lives and they need help, or they just want to improve. It is my job to focus on financial planning- that is what I do all day. I have to learn and constantly keep up to date with things like taxation, investments, super and insurance. I aim to put you in a better position than you would have been without me- and I have many long-term clients who are very happy that I have helped them do that.

 

If you have any questions please don’t hesitate to contact me on 8299 9927 or via e-mail on katherinehann@internode.on.net.

 

 

 

14 Day plan for the New Year

Katherine Hann | 11-Jan-2018

Welcome to 2018, I hope you have had a wonderful 2017 and I’m sure you all have plans for the New Year.

For those of you looking for a fresh start this year, I’d like to share a quick and easy 14 day financial plan to get a kick-start on your finances. They involve 14 steps that you can take to make improvements. Everybody is unique and has a different set of circumstances- so some of you might feel more confident in achieving more of these steps than others. Not to worry: this is something a financial coach can help with.

If you have any questions on how to achieve your financial goals please give me a call on 8299 9927 or e-mail me at katherinehann@internode.on.net.

 

You Insured What?

Katherine Hann | 06-Dec-2017

Some of you may have heard Jennifer Lopez has her derriere insured for $27million.

She’s not the only celebrity who’s insured a body part. 

Julia Roberts has insured her teeth for $30m, David Beckham has insured his legs for $70m, and Bruce Springsteen insured his vocal chords for a more modest $6m.

Are these publicity stunts, or is there some sense behind it?

In the case of celebs insuring body parts, they are protecting against their diminished earning capacity. Because protecting wealth is as important as accumulating it. Suddenly that doesn’t sound so silly at all.

So do you have your income producing assets insured? In your case that’s probably just ‘You in good health’ such as insuring your income should you become sick or injured. But it could be your business overheads or a key person in your business.

For more information on some of the available types of insurance, whether you can pay for it in your super, or whether you can claim a tax deduction, you should see an adviser who knows a lot about Personal Insurance.

Email me using katherinehann@internode.on.net or call on 8299 9927 for a chat.


 

 

Are You Cancer Smart

Katherine Hann | 13-Nov-2017

Most people don’t like to think about the possibility of getting a health condition- so we tend to adopt the mentality of “it won’t happen to me.”

In reality, one in two Australian men and women will be diagnosed with cancer by age 85 ( yes, that’s half!) according to The Cancer Council of Australia’s Facts and Figures from February 2017. Click here for more information and ways in which you can protect yourself.

There is no way of predicting the future and knowing whether you’ll be that 1 in 2; but there are ways in which you can be prepared:

1) Get checked regularly: early cancer detection improves your odds of faster recovery and life expectancy. Look into the types of screening you can have- just a few: skin checks, breast examinations and regular pap-smears for women, and prostate exams for men.

2) Know your family history: it is known that a family history increases your risk of certain cancer types significantly. Not only will this give you an idea about what to be vigilant about, you can also get genetic testing for some cancers.

3) Stay healthy: yes there’s a lot of conflicting information on the internet about this, but both the Cancer Council and the science says the top 5 lifestyle changes to focus on are: quit smoking, maintain a healthy weight and diet, protect your skin from the sun, limit alcohol consumption, and get regular exercise.

Not all of you may know this, but insurance needs analysis is an important part of the financial planning process. The above may help you reduce risk, but if you do suffer a cancer event there is something else you can do to protect yourself against the financial burden.

Trauma insurance: Pays a tax free lump sum if you’re diagnosed with an illness such as cancer or heart attack – there are no restrictions on what it can be spent on: recovery time away from work, medical costs, covering the bills, you name it.

Income Protection Insurance: you receive regular payments to make up for your loss of income if you can’t work due to sickness or injury. The cost of this insurance is tax deductible to the owner of the policy, which can be you.

If you want help about the types of insurance you can structure inside and outside of your superannuation, come and see me for a free, no-obligation first meeting.

 

Invisible Money

Katherine Hann | 17-Oct-2017

I was having a chat at a local fruit and veg shop where the cashier told me that babies under 2 are now tapping to pay while held in their parent’s arms!

It’s really interesting how these things are now more common, and soon this is likely to be the norm – but have we thought about the impact of the impressions that these ‘invisible’ transactions might be having on our kids?

This video by Scott Pape (The Barefoot Investor) is a great little info-graphic on what trends modern payment methods could be setting, and what we might need to start teaching our kids when we are out and about.


How easy is it to just tap or SMS away at the checkout? If your child is watching you or anyone else, it looks like no one has exchanged any money at all. Already adults are falling into the trap of paying on the credit card or phone with no thought of a budget.

Change is not always a bad thing, we should embrace it- but we should also make sure children are learning what is taking place when we wave that card or that phone.

From an early age kids plan for money, spend money, and save money.

It’s important that we teach the younger generation about financial literacy both at school and at home.

Remember: the habits they have as adults stem from what they learned growing up, and they learn best from following by example.

 

Is it too good to be true? How to look out for a scam

Katherine Hann | 10-Oct-2017

We’ve all heard stories of the elderly being tricked out of their savings, but data from Scamwatch confirmed that in 2017 the group to lose the most money to investment schemes is the 55-64 age bracket .

Investor scams, although not the most common type, produced some of the greatest losses:

Since the beginning of 2017, Australians have lost over $19million to this category, and $4.8million of that is from the Baby Boomer generation. Men have been scammed out of more money, with 67% of the total amount lost coming from male investors.

The most common types of investment scams include:

Cold calls - share, mortgage or real estate high-return options or foreign currency trading.

Hot tips - encouraging purchases of shares in a company that is ‘guaranteed’ to increase in value. The victim is encouraged to act quickly, but the scammer is either selling shares that have no real value, or has obtained rights to the shares via a hidden clause.

Investment seminars - scammers convince investors to buy into high risk investment strategies with no independent advice. Often they are not licensed advisers. You may end up having to pay high fees and commissions that the promoters did not tell you about, or you could simply be buying something that is not worth as much as they say it is.

Superannuation scams - offering early access to funds held in superannuation accounts. Super funds can only be accessed when a specific condition or release is met and these conditions are legislated.

Remember, red flags are your friend- and if in doubt just say ‘no’. A genuine professional would not resort to high pressure sales tactics and must give you full disclosure of any fees before giving advice.

It is important to obtain advice from a licensed professional, so do be sure to ask the person giving advice what their qualifications are and how they are licensed.

It is also best to see a finance professional in person if possible, and ensure that they ask all relevant information about you to understand your specific financial situation, needs, and objectives before acting.

 

Money: Don't Put All of Your Eggs Into One Basket

Katherine Hann | 19-Sep-2017

With the low interest rates in our Australian economy, cash savings are less attractive to investors looking to earn higher returns. There are alternatives out there, but the subject of ‘risk’ comes up.

People tend to invest in Australian Shares, Retail Property or Cash because it is what they understand. The danger in this is it’s a classic example of 'putting all your eggs in one basket', or in the finance world: 'a lack of diversification'.

With investing and asset classes, you can get much higher returns than your bank account can offer. Just have a look at your superfund performance over the last year and compare that to your bank account and you’ll see what I mean. The Australian stock market ASX200 performed at 8.3% over the last year, but if you look at the individual companies, some returned as high as 43%, where some gave a loss of 38% last year!

So clearly the key is spreading your money around, and to make sure that you are personally comfortable with the level of risk you are taking.

This ‘nestegg’ article shows some of the other choices you have, and the key importance of putting your money in a variety of places.

According to Morningstar: In the last 10 years Property investing in Australia has performed at approximately 8%pa, and Bonds at about 6%pa. Why is no one investing in International options?

Investments in International Shares, Emerging Markets, International Property, Infrastructure and Global Fixed Interest. They sound complicated but that’s what an adviser is for: to guide you through your investment options which are appropriate for your own personal situation. 

From an Adviser's Perspective: The Things That Worry Clients the Most

Katherine Hann | 3-Aug-2017

As a financial adviser, I meet a diverse range of people in some very different circumstances, but for me it really helps to get some perspective from other advisers on what they’ve experienced too!

I came across this article on advisor-ratings and thought it would be great to share with everybody.

Advisers were asked what the main concerns clients had about their finances and the economy and there appeared to be Three Main Areas of Concern

1. Having Enough to Retire On

Constant changes lead to confusion and a break-down in trust with our government. How do you come up with a strategy to plan effectively for retirement when the rules keep changing? How do you get ahead and plan for the future?

2. Managing Money: Budgeting / Cash Flow / Debt Reduction

Money is about so much more than success, it’s not all about cash flow tables - it’s about lifestyle, and getting the one that you want! I work by educating clients and making them more aware of their situation to make informed decisions about what strategies they can use to save.

3. Market Volatility

People seem concerned about how war, international trade, and the election of Donald Trump will affect Australia’s economy. I regularly talk people through the effects of ‘a bad year’ and how to manage in such a situation.

We advisers are not simply stock pickers or insurance sellers. We are investigators who analyse your situation to help identify financial goals, then form strategies with a range of products that you may not have access to otherwise, or even knew were available! We can act as financial coaches to listen to your concerns, assess your fears, and work with you to become more secure and educated about your finances.

 

The Science Behind Spending

Katherine Hann | 11-Jul-2017

We already know from marketing and psychology studies that there are many triggers which make us buy on a whim, and these are used to get us to spend more!

61% of Australians are not committed to a savings plan, and 46% don’t even have a weekly budget!

But can you train your brain to be better at saving?

New research from UBank in collaboration with Dr Phil Harris at The University of Melbourne (an expert in Consumer Neuroscience) sheds some more light on the mentality of spending habits, and gives some guidelines to apply to your personal finances.

Have a look at the ‘brain-wave reading’ technology they used (Electroencephalography).

 

The ‘Science of Spending and Saving Experiment’ found:

1. It takes a much larger sum of money to convince people to deposit money vs spending it

2. Our natural default seems to be to seek immediate rewards- even if it hurts us later

3. People changed their attitude towards money when they saw their future selves

 

Armed with this information, UBank has inferred some useful tips to help us: 

Spending is emotional so try to make financial decisions when in a positive or stable mood: Easier said than done, but we make impulse buys to reward us when we are feeling tired or down.

Don’t keep large sums of money in an easily accessible account: like the one linked to your debit card, or worse- a credit card with a high limit! Put it somewhere that rewards you for keeping it there and not touching it.

Write down what you’re spending and share it with a family member/friend: It’s the best way to get feedback, so be brave!

Use physical cash: seems a bit archaic, but the act of seeing your money disappear from your hands might help.

Make saving a default habit: Don’t think about it too much, just set up an automatic transfer after payday to put it somewhere out of sight and out of mind.

 

For more information, read the Ubank summary <here>, and for some tips on how to best manage your finances contact Katherine Hann on (08) 8299 9926 or katherine.hann@internode.on.net for expert Financial Advice. 

 

The Australian Census is Out! So Just Who Are We?

Katherine Hann | 27-Jun-2017

There was some controversy surrounding the last round of data collection from the Australian Bureau of Statistics. A large part of this was concerning the privacy of data and a minor miscalculation of the people wishing to submit online.

Regardless, we gain a wealth of useful information from this process, and today the census of 2016 was released to the public.

The census gives us a snapshot over the past 5 years, and tells us what is going on in Australia. By filling out the census, you were given the opportunity to represent yourself!

So, what did the 2016 census tell us about the last 5 years?

Some useful information we gained since 2011:

  • There are less people owning their homes outright, with more people opting have loans on multiple properties.
  • We are even more multicultural, with more people born overseas. 
  • People are less religious than they were.
  • There are more single parent families.
  • We have a big increase in reported same-sex couples.
  • 85 is the new 65

The ABC released an infographic <here> which gives a picture of who we are, where we live and what we do. 

For more information on wages, demographics and our living standards, have a look at the Australian Bureau of Statistics Census website for regular updates and more detailed information. 

Taking Time Off? How to Close the Gap

Katherine Hann |

Whether taking a break from the workforce to start a family or to care for a loved one, one of the disadvantages you face is a lack of superannuation contributions.

But exactly how can you achieve this if you aren’t earning an income?

The following article by nestegg gives 3 great tips to boost your superannuation. 

1) Catch-up contributions after you return to work

2) Spouse contribution tax-offset 

3) Spousal splitting 

Have a read of the article here for more details, keeping in mind that a spouse isn’t just a person you are married to, a spouse is a domestic partner that you live with (for more details check the government legislation for your state). 

Many people don’t think about super until right before they retire- and by then there are limited options. It is important to take action now if you wish to have a financially secure retirement.

 

Women vs Men

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A controversial yet hot topic among social media these days seems to revolve around Women vs Men (how much women earn, how much they get promoted, are they paying more for consumer goods?).

This video highlights another key difference – one to do with investing. Although the video is made in the UK, the topic and outcomes are similar to Australia. In fact, there have been many studies and articles in recent years that suggest in general:

1).Women hold more of their wealth in cash than men do

2).They report being less confident about taking financial risk

3).When women invest they do so for the long term (they don’t buy/sell or move money about as often)

Sometimes this can result in better long-term returns, sometimes it means depositing money in places that don’t keep up with inflation (in Australia this is 2.1% at March 2017).

Overall, it seems that when women do start to invest, they can outperform men! Men have been shown to trade 45% more than women, but on average produce lower returns from trading by 2.7%.(1)

As with many things in life, education seems to be the key to building confidence and making smart choices.

It is essential for everyone to understand their own investing behaviour: 

Do you think being too aggressive in investing has made you lose out?

Do you feel you are missing out by not taking an active role?

For those of you (men or women) who do invest, are you glad you took an active interest in your finances?

 

(1) A study on Behavioural Investing by the National Australian Bank demonstrated some of these investing differences in more detail (If you’re interested, or just keen on seeing some real references within). Check out the  Link here

Saving For a House or Holiday? Here’s How Some Simple Maths Can Work for You

Katherine Hann | 30-May-2017

Today, I’m going to let you know how maths can be both fun and useful.

Most of us have a savings goal of some kind – whether that’s a big holiday getaway or a dream home. The problem we face is ‘how do we get there’?

Well it goes without saying that you need the capacity to save something from your income, but did you know you can also use a little gem called compounding interest?

Compounding interest is basically interest on-top-of interest; there’s a formula for it but it does tend to scare some people away.

Instead, let’s look here at a handy interest calculator on ASIC’s money smart website to show the effect.

Did you know that if you put aside $1,000 over a period of 5 years at 10% annual interest rate, you will end up with $1,600, and after 7 years you will have $1,949? If we compare that to a 2% interest rate (like one you might get in a savings account) over that period, you’re looking at $1,149 after 7 years- not as impressive.

Here’s the real kicker, if you want to compare this to superannuation, why don’t you try adjusting your figures between 5%-10% over a period of 30 or even 40 years! Your $1,000 at 10% pa over 40 years becomes $45,259.

This is not magic, it’s just simple maths–the compounding effect. You don't even have to add more money to it, but imagine if you did!

What you need is the best interest rate you can get for the risk you are taking. You need to leave the money there, and it needs time  to grow.

If you’d like to know how to get help with this, financial advice could get you there with a lot less savings than you think. Call Katherine Hann today on 8299 9927, or email katherinehann@internode.on.net for a no-obligation first appointment.

 

Is Credit Card Debt Causing You Worry?

Katherine Hann | 9-May-2017

Is credit card debt causing you worry?

Do you know what your credit card fees are?

They could include all of these listed below:

  • Interest charges
  • Balance transfer charges
  • Cash advance fees
  • Foreign transaction fees
  • Annual subscription fees

What does interest do to the cost of your purchase?

  • When you carry a balance on your credit card it means that you will end up paying more interest.
  • You will be charged interest for every purchase from the day of purchase until it is paid off.
  • So, when you buy something, the price that is written on the receipt is not the price that you actually pay when you add the interest charges.

Is an interest free period right for you?

  • Are you disciplined with your money?
  • Can you simply leave it for later, or not buy it at all?
  • Do you know when your credit card payment is due, and do you have the available funds to pay it off in full each month?

If you have answered yes to these questions, you are the type of person that could use the interest free period on a credit card effectively.

The average Australian will pay $734 per year in interest charges and the amount of debt we have on credit is truly astounding!

Check out this link from ASIC Money Smart for an interactive credit debt calculator, to find out more about how to reduce your credit card debt.

 

End of Financial Year

Katherine Hann | 1-May-2017

 

6 Reasons to see your adviser before the end of the financial year
1. Transition to retirement
There are certain actions and activities that can ensure a smooth transition to retirement and the rules are changing. Are you 55 or over? How will this affect you?
2. Consolidating superannuation into the one fund
The number of people with multiple super funds is quite amazing. I can help you gather all of your super into one fund which will save administration fees and paperwork.
3. The opportunity to get a tax deduction for Income Protection Insurance
The end of the tax year focuses most of us on tax deductibility. If you are the owner of the policy, income protection is a tax deduction, have you considered this?
4. Reviewing the nomination of beneficiary under your super fund
The number of incorrect and out of date nomination of beneficiary cases is astounding. Incorrect names, former partners or grown up children who are no longer dependent on you. This needs to be addressed to make sure the right amount of money goes to the correct person in the quickest time.
5. Event changes to estates
Has there been a new family member, death or divorce in the last year?
Has anyone in the family had a job change or health issues? Keep you adviser updated so she can help you.
6. Contributions to super
Salary sacrifice, super contributions if you are self-employed, access to the government co-contribution. Beware of the contribution caps.

Make an appointment with Katherine Hann before 30 June 2017 by calling on 82999927 or email katherinehann@internode.on.net

 

 

Are You Retirement-Ready?

Katherine Hann |

 

We are all wanting to retire someday.

Just how close that is and the kind of lifestyle you lead will be different for each individual.

To find out more about the new superannuation rules coming on 1 July 2017, please see the latest article from Colonial First State.

Your financial planner, Katherine Hann can explain the new changes in more detail and help you make the most of your situation.

Contact Katherine on 08 8299 9927 or email katherinehann@internode.on.net

 

How to Manage Your Debt

Katherine Hann | 4-Apr-2017

 

Now that Christmas and the Holiday Season are finished, do you still have debt hanging around?

Perhaps you have small debts in a lot of places?

Here are a few tips on how to make this easier to manage and get yourself out of debt sooner:

 

1. Add up all of your debt (don’t include your home loan).

You can’t reduce this if you don’t know how much it is.

 

2. Set up a budget and make it realistic

You have to pay your home loan (or rent), your bills, and meals - make sure there is enough for this first.

 

3. Prioritise your spending and make sure paying debt is near the top of the list.  

Pay off the debt with the highest interest rate first. Yes, that means you need to find out what interest rate(s) you are paying.

If you can’t find out from your statement, ring the company!

 

4. Close each account as soon as the debt is paid off. 

Don’t be tempted to keep a credit card open “just in case.”

 

5. Consider consolidating your debt. 

This may feel scary as it seems like you’ve now got bigger amount, but the interest rate may be a lot lower than you are paying on each individual debt.

 

Your financial planner is here to help with budgeting, saving, and debt management. Contact Katherine Hann on (08) 8299 9927 for a no-obligation conversation or email katherinehann@internode.on.net. 

 

Multiple Super Funds, Should I Consolidate or Not?

Katherine Hann | 16-Mar-2017

 

Many of us end up with more than one super fund. Why?

Sometimes it is just easier when you start a new job to sign a form that allows your super payments to be made to the most convenient fund for your employer.

This may mean that you end up with multiple super funds.

Is this really the best for you?

Below are some good reasons to only have one super fund:

  • Only one set of fees
  • Less paperwork
  • No lost super accounts
  • Easier to manage your investment strategy

However, sometimes there are good reasons have more than one super account:

  • A large exit fee on a super account
  • Loss of insurance benefits you won’t get from another fund
  • Not possible for you to transfer your money out of an account (eg. if you are in a defined benefit fund)
  • No choice of fund with your employer 

Working out which options are best for you can be confusing, and that is why you should speak with a financial adviser who is an expert in determining the best outcome for your unique situation.

Get in touch with Katherine Hann on 08 8299 9927 or at katherinehann@internode.on.net for a no-obligation discussion.

 

Go Against the Herd

Katherine Hann | 2-Mar-2017

 

Go Against the Herd

 

Investor behaviour often appears to go against both logic and reason.

Investors are people, and people are subject to behavioural biases. Not only that, they are rarely experts in the field of investment knowledge.

Behavioural finance states that when it comes to investing, people often exhibit herding behaviour or a ‘group thinking’ mentality.

Most investors don’t like losing money even though they know that this can happen when investing in the stock market. This irregularity can lead to panic selling during market setbacks.

Herd-following investors typically buy shares when everyone else seems to be buying and prices are rising - only to sell when everyone else seems to be selling and prices are falling. In other words, they "sell low and buy high.”


To avoid this fundamental investment pitfall, a good financial adviser will help you: 

  • Set clear and appropriate investment goals.
  • Develop a suitable long-term asset allocation for your portfolio, taking into account your goals, your risk tolerance and the need to diversify your portfolio to spread the risks and opportunities.
  • Stay committed to your appropriate long-term investment strategy through periods of market uncertainty and in spite of the actions of the market herd.
 

There are some simple solutions:

  • Have a financial adviser to coach you through market uncertainties.
  • Set suitable goals and stick with those goals if still appropriate.
  • If you are worried about something, talk to your adviser.

If you would like to know more about investing, contact Katherine Hann on 08 8299 9927.  


 

Life Insurance Inside Your Super

Katherine Hann | 24-Jan-2017

Life Insurance Inside your Super

Most of us have insurance inside super without even knowing it .

I was having a general discussion the other day with a man who was doing some repairs to the office where I work.

He told me that he went to a bank financial planner wanting to know the answer to just one question: “Am I doubling up on my life insurance?”

He never did get the answer and so asked me.

My first questions was “Do you know how much you have?” He answered with, “I have a joint policy with my wife and it is costing us a lot of money.”

The next question I asked was “Do you have any super?” and he answered “We both do.”

I asked him, “Do you know if you have any insurance inside your super?” and he said “I have no idea.”

Most of us have insurance inside super without even knowing it.

It could be what is called default insurance, which occurs when the super policy is set up and depending on your age and what you earn, the super company will automatically insure you for a certain amount of Life and Total and Permanent Disability Insurance.

In some cases you may also have income protection insurance within your super.

Not sure what these are? Check out my earlier blog here “Do You Need Personal Risk Insurance” which explains the types of personal insurance that you can have within super.

You can read your super statement to see if you have insurance but if you are not sure what you are looking for, ask your financial adviser and they should find out for you.

If you want to know if you have too much or too little insurance either inside or outside of super, come and see me for a no obligation first appointment.

 

 


Government Changes That Might Affect Your Retirement Plan

Katherine Hann | 17-Jan-2017

Government Changes that Might Affect Your Retirement Plan

Anyone who knows me, understands that this is where I want to spend more time when I eventually retire. However, it will and should be different for each individual. Keeping up with the changes to legislation is an important part of the information you should receive from your adviser.

Reduced caps on super contributions

    • One of the main ways Australians save for their retirement is through pre-tax or ‘concessional’ contributions to super.
    • These are the contributions made by your employer or through salary sacrificing.
    • The government is proposing a reduced annual cap of $25,000 across the board from 1 July 2017.
  • Think about making a concessional contribution to your super before 30 June 2017.

    • From 1 July 2017 the annual non-concessional contribution cap will be reduced from $180,000 to $100,000 for clients with a total super balance of less than $1.6m.
    •  The current cap of $180,000, or $540,000 under the bring forward rule, continues to apply until the end of 2016–17.
  • Think about making a non-concessional contribution to your super before 30 June 2017.

    What are the changes to the Age Pension assets test that will apply from 1 January 2017?

    •  The lower threshold for the asset test is increasing.
    • If you have assets over the lower threshold, your entitlement to the Age Pension will reduce.
    •  Those with greater assets could see a significant reduction in, or loss of, their age pension entitlement and those with lesser assets could see an increase to their entitlement.
    •  The rate at which your Age Pension reduces if your assets exceed the lower threshold is increasing from $1.50 to $3.00 per fortnight for every $1,000 over the threshold – this has the effect of reducing the cut-off limit where an Age Pension is no longer payable.

    My clients already know if this will affect them but you may have friends or relatives that need some advice.

    These are only a few of the legislated changes, for more information on what these changes will mean to you, contact Katherine Hann on 08 82999927.

     


    You Don't Need A New Year's Resolution

    Katherine Hann | 10-Jan-2017

    You Don’t Need A New Year’s Resolution

    According to the latest MLC Quarterly Australian Wealth Behaviour Survey, Australians believe wealth means:

    •being debt free,
    • having enough money for emergencies
    • being able to fund desired lifestyles
    • doing what they chose to do
    • being able to help out family and friends

    Most people think they can achieve their financial goals with an annual income of less than $100,000 and with savings and investments of $818,000 in retirement.

    However, only half of the respondents think they have done enough to achieve wealth, mainly because they are not earning enough.

    The key factor in the failure to achieve their goals is self-doubt and the reason for doubt was the lack of a financial plan.

    “Having a financial plan is crucial to feeling empowered and getting where you want to go with your money.”

    January is a common time to think of your goals for the year, you don’t need a New Year’s Resolution but you do need a plan and most people need help.

    Contact Katherine Hann, a “Most Trusted Adviser” and she will help you either get started or review your current financial plan.

     


    How To Prepare For A Financially Stress-free Christmas

    Katherine Hann | 22-Nov-2016

    How to Prepare for a Financially Stress-free Christmas

    When it comes to Christmas, I know many of us want to be generous to those who matter to us but when January comes around so does the financial stress.
    Show yourself some Christmas love by keeping your spending in check and starting the New Year on a great financial footing.
    Just follow these 3 steps and make each Christmas Season a joy for you and your family and friends.

    1. Work Out How Much You Can Afford To Spend on Christmas

    Look at your finances from now until Christmas. Hopefully, this means you’ll look at your budget.
    If you haven’t started budgeting yet, check out my blog on Budgeting-How to Make it Exciting!

    http://www.katherinehann.com.au/women-and-money/financial-literacy

    Whatever you do — do something! The first step to creating a financially stress-free Christmas is knowing what money you have, which means you need to budget.

    2. Take Inventory of Christmas Expenses

    Make a list of all of your Christmas expenses, here are some examples:
    Presents - List who you're buying for, what you want to buy, and how much money you've allocated for each person.
    In my family we put a limit on the amount you are going to spend on each other and organise a Kris Kringle where you purchase for one person only.
    Decorations – lights, tree, ornaments, candles, stockings and other holiday house decorations.
    Food – Christmas dinner, Christmas breakfast, food for parties, holiday treats for the neighbours and friends. Write a list for each function you are hosting including a budget for all food and alcohol and make sure you stick to it.
    If you are traveling - List costs like flights, car service, tyre check, petrol and travel insurance and shop around for deals early.

    3. Fill in the Gap

    Now, compare what you can afford with what you project your holiday expenses to be. Address any gap between what your projected Christmas spending is and what you can afford.
    Keeping track of your festive spending is the best way to avoid going over your budget this Christmas.
    Try the ASIC Moneysmart TrackMySPEND app to nominate a spending limit for different types of Christmas expenses and track your progress while you shop.

    I wish you all a safe and Happy Christmas with your loved ones.

    Katherine

     


    Good Versus Bad Debt

    Katherine Hann | 4-Oct-2016

    Good versus Bad Debt
    Debt is about borrowing money and that comes with risk.
    When considering borrowing money, ask yourself the following questions:

    • Will borrowing this money improve my finances in the long run?
    • Have I shopped around to get the best deal?
    • Will I be able to cope should interest rates rise in the future?
    • Will I comfortably be able to afford the repayments?
    • Do I understand all the terms and conditions associated with borrowing this money?
    • Do I understand the risks and what could happen if things go wrong?

    So what is the difference between good and bad debt?
    Debt is considered good when it’s efficient—that is, it’s working to help you build wealth.
    One of the most efficient ways to use debt can be borrowing to invest in an asset, such as property or shares, which can generate income and grow in value while the interest charged on the debt is generally tax deductible.
    However, be aware that this can be highly risky and you should not enter into an arrangement to borrow money to invest without advice.
    Bad debt is said to be inefficient because it generally costs money in interest charges without helping to build your long-term wealth.
    The least efficient debt is money borrowed through credit cards and personal loans to pay for day-to-day expenses or an asset, such as a car that decreases in value.
    While I am not a mortgage broker or lender and therefore can’t advise you on taking out a specific loan, what I can help you with is a plan to achieve you financial goals and if appropriate for you, build long term wealth.


    How Do You Boost Your Superannuation?

    Katherine Hann | 27-Sep-2016

    How Do You Boost Your Superannuation?

    Worried you won’t have enough money to retire on?

    How do you calculate what you will need and how to save enough in super for that retirement dream?

    There are things you can do now to have the retirement you want.

    There are retirement calculators online, however for a more accurate illustration, your financial adviser can help you determine how much you will need.

    Here are 3 things to think about which will help you plan for your retirement:

    • First, have an idea when you want to retire. If it is after age 65 then you are allowed access to your super benefits without limitation.
    • Finally, now you will know if you have any spare money to put towards your superannuation in additional contributions. This will help you boost your super and can have tax advantages.

    Drastic changes to your lifestyle are not necessary when you want to grow your superannuation fund.

    If you start to plan your retirement early, you are less likely to make big changes to your current lifestyle. So you have three choices:

    • Do nothing – As long as you are sure that your employer is making super contributions on your behalf, you could just continue going to work and earning money. Compulsory contributions from employers are called Superannuation Guarantee.
    • Do a little – Although you might not be ready to plan for your retirement, you can start by learning more about your super, how it is invested and what fees you are paying.
    • Do a lot – Engage with a financial planner and together you can start to plan for your retirement.

    I recommend the last option. Take advantage of a financial adviser’s knowledge and skills to help boost your superannuation.

    Of course I’d be thrilled to have a no obligation talk to you about this, so fee free to call or leave a message by clicking on the link below.

     


     


    Budgeting-how to make it exciting!

    Katherine Hann | 13-Sep-2016

     

    Budgeting-how to make it exciting!
    It doesn’t matter how much you earn or even what you spend as long as you know what these things are and plan for what you want.
    Of course I add to the above comment that you need to spend less than you earn. However, the point is to have the money to do what you want.
    In my group of friends at the moment it is travel. The kids have grown up and are financially independent but we are not ready to retire, so we all want to see something of the world.
    In my children’s age group, they are just starting to earn a good income and thinking about saving for a home.
    Some of my clients are asking how much they will need to live on in retirement.
    Many people really don’t know what they spend now, so the first step is to work that out.
    There is a great budget calculator on the “Money Smart” website (see link below) which I often recommend.
    https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner

    If you are reading this then you are interested in improving your finances, so take the challenge and work out your budget!
    Sometimes it can be overwhelming to take that first step and it is easy just to worry about it and do nothing.
    Of course, a good financial adviser can help you with this, so if you do need help,contact Katherine Hann.


     


    5 reasons why people are reluctant to seek financial advice

    Katherine Hann | 16-Aug-2016

    5 Reasons why people are reluctant to seek financial advice
    Reason #1: "I don’t trust anyone when it comes to my money"
    Any industry will always have unscrupulous people out there trying to take advantage of others.
    Recent media attention has focused on a very few individuals who have not done the right thing by their clients, which may cause some distrust regarding financial advice.
    Fact: Actually, the opposite is true, most advisers want to help their clients and legislation makes it fundamental that all clients receiving advice be put in a better position.
    Reason #2: "I’m smart. I can manage my finances myself."
    Actually, all my clients are smart as they have realised the expertise of a financial coach and councillor.
    Intelligence isn’t always what you know but knowing where to find the information you need.
    How an advisor can help: I help my clients put together financial plans, identify risks, talk them through market volatility where they might be tempted to make an emotionally driven investment decision, and help them identify their biases.
    Reason #3: "My financial situation isn’t that complex."
    It is true that everyone’s circumstances are different. Even if you think it’s not that complicated, there may be several things that you hadn’t considered or even knew to ask about that I can help you identify and decide how to best move forward.
    Idea: Even if your situation is not complex, it does not mean you are optimising your finances
    Reason #4: "I don’t understand my money situation."
    Most people are uncomfortable talking about money, especially if they think they haven’t been good managers of their financial life.
    Fact: You are definitely not alone… think about how many financial advisory firms are out there; they’re there because there are many people just like you need help. Advisors have seen it all, and revel in the idea of helping people have better financial outcomes than they are currently getting.
    Reason #5: "It’s too late for me."
    It’s never too late to take control of your finances so you can shift your focus to the rest of your life and relax. There is documented evidence that people who receive great financial advice are happier, healthier and live longer. Why shouldn’t that be you!
    Fact: Whether you are just starting out or nearing the latter stages of retirement, there are financial worries that a quality advisor can help you solve.
    If any of this sounds like you, click on the button below and let me help you!


    The Big Freeze

    Katherine Hann | 15-Jun-2016

     

    The Big Freeze
    It was wonderful to see “The Big Freeze” event in support of raising much needed funds for the research into Motor Neurone Disease.
    This insidious and awful disease has recently been bought to light by Neale Daniher, a well-recognised and much loved member of the football fraternity.
    I hope that no one else gets a diagnosis for this horrible disease and yet I know they will.
    In this most terrible time, wouldn’t it be great to at least know that you has some financial back up?
    Did you know that Motor Neurone Disease is covered by Trauma (also known as Critical Illness) insurance?
    This type of insurance will pay a tax free lump sum on diagnosis of over 30 different types of diseases including but not limited to heart attack, stroke, cancer and neurological disease, of which Motor Neurone Disease is one type.
    A lump sum benefit could help you stay on top of debts, pay for medical bills and generally help you maintain a reasonable standard of living while you’re recovering.

    I have this insurance for myself as I know I am in an age category where this is not only possible but quite likely.
    Your financial adviser can help you put this insurance in place and if the need should ever arise, help guide you through the claims process.
    Contact Katherine Hann on 08 8299 9927 or email katherinehann@internode.on.net to find out more about Trauma Insurance.

    Wellbeing and Financial Advice

    Katherine Hann | 7-Jun-2016

     

    Wellbeing and Financial Advice

    In conjunction with the Association of Financial Advisers (AFA) and TAL, The Beddoes Institute have recently released a white paper entitled Money, Wellbeing and the Role of the Financial Advice.

    Below are a few key findings:

    • Thinking about money can have a negative impact on health and well-being, especially for people with low financial literacy and particularly for women.
    • Improved financial literacy delivers benefits in terms of improved emotional, vocational and physical health (up 19% for women) and greater satisfaction with life (up 16% for women) and better relationships (up 12% for both men and women).
    • Following working with a financial adviser, women’s ability to manage their finances improves by 27% and men’s improves by 24%.
    • Formal education has little impact on one’s ability to manage finances confirming that financial advisers are for everyone – not just those that are more educated or better with their money.
    • The benefits of working with a financial adviser in terms of improved confidence and ability to manage money and financial issues are substantial for both men and women.

    Financial advisers therefore play a significant role in contributing to the health and well-being of the Australian community.

    Contact Katherine Hann today on 8299 9927 to organise an appointment.


     



    Income Protection Insurance-5 reasons you need it now

    Katherine Hann | 26-Apr-2016

    Income Protection Insurance-5 reasons why you need it now

    You don’t think twice about insuring your car, your home or your contents but when it comes to your income, you hesitate-why?

    Did you know that of the working population, one in six men and one in four women are expected to suffer a disability from the age of 35 to 65 that causes a loss of 6 months or more from work*?

    1. Income protection insurance will replace 75% of your income up until you retire, if you can’t work again.
    2. You can choose the option to add up to a further 10% to replace your superannuation contributions, so that when you do retire, there will be something to retire on!
    3. Income tax is tax deductible to the owner of the policy, so if you are paying for your income protection from your own expenses you can claim a tax deduction.
    4. You can pay for your income protection insurance from your superannuation money.
    5. There are a lot of differences in policies, waiting times before you receive your money, benefit periods on how long you are paid for and occupation types that will change how much your policy will cost.

    Because income protection insurance policies are tailored just for you, there can be a lot of options and this can be confusing.

    I don’t want to see you worry about your money like the couple in the photo above.

    If you could not maintain your current lifestyle during illness or injury, call Katherine Hann 08 82999927 to organise an income protection policy today.

    *Source: Institute of Actuaries December 2006

    Super death benefits

    Katherine Hann | 19-Apr-2016

     

    Super Death Benefits-who gets your super?
    You may not believe it but your super doesn’t automatically become part of your will should you pass away.
    You need to tell your super fund who will get your money or they and the courts may decide for you (this will also include any life insurance benefits if applicable).
    Of course, there are rules.
    1. You can include your super death benefit as part of your estate by completing a binding death benefit nomination in favour of your legal personal representative (LPR). In this way, you will provide for the distribution of your super death benefit in accordance with your will.

    2. You can leave your super (as a lump sum) to the following people in your life and they don’t have to pay tax:
    • Your spouse or partner
    • You child under age 18
    • Someone you have an interdependent relationship with (you live together, have a close personal relationship or pay each other’s bills).

    3. If you leave your super to your adult children or a tax non-dependant, they will have to pay tax and the amount will depend on the taxable and tax free components of your super (see table below).

     

    Age

    Taxable component taxed element

    Max tax rate

    Taxable component untaxed element

    Max tax rate

    60 and above

    Non assessable and non-exempt income (NANE)

    0%

    First $1,395 million (untaxed plan cap)

    15%

    Balance over $1,395 million

    45%

    Preservation age to 59

    First $195,000 (low rate cap)

    0%

    Frist $195,000

    15%

    Balance over $195,000

    15%

    $195,000 to $1,395 million

    30%

    Balance over $1,395 million

    45%

    Below Preservation age

    Whole component

    20%

    First $1,395 million

    30%

    Balance over $1,395 million

    45%

     

     If you want to make sure that your super and insurance goes to the right person, contact Katherine Hann on 08 8299 9927 to discuss further.

    When can I access my super?

    Katherine Hann | 05-Apr-2016

    When can I access my super?
    In most cases you can’t withdraw your superannuation until you reach your preservation age and retire.
    Preservation simply means locked away until you reach a certain age and retire, or satisfy another condition of release.
    Preservation age is 55 for those born before July 1960, and ranges from age 56 to 60 years, depending on date of birth, for those born after 1 July 1960.
    Retirement is the most common condition of release. You can access your super when you have reached your preservation age AND retire from the work force.
    As soon as you reach the age of 65, you can withdraw any or some of your superannuation benefit (if you wish), even when you haven’t retired from the workforce, this is known as a condition of release without restrictions.
    You can access a portion of your benefit each year by starting a super pension without retiring, provided that you’ve reached your preservation age and you withdraw no more than 10 per cent of your account balance as a pension payment/s each year. This is known as a transition to retirement pension. There may be some tax advantages to this, depending on your individual situation and age.
    You may be able access some of your super funds if you satisfy the special conditions that constitute the government’s view of ‘severe financial hardship’.
    You must have been receiving Commonwealth Government income support continuously, and the trustee of your super fund is satisfied that you can’t meet immediate reasonable family expenses. There are conditions on the amount you can receive.
    Before you retire, your super fund can release, part or all of your preserved benefits if you’re suffering a life-threatening illness, or are trying to prevent the bank selling your home, pay for funeral or medical expenses, or palliative care. Do you know anyone in this situation? Let them know, there is something they can do at such a difficult time.
    If you suffer a terminal medical condition as defined by the super laws, you will be able to access your super benefits early. Clients with a terminal medical condition who withdraw superannuation lump sums while under age 60 are not subject to tax on that lump sum. Conditions do apply.
    There are other reasons and rules for conditions of release which will be discussed in future blogs. These include but are not limited to permanent or temporary incapacity and death.
    As you can see, the rules are many and the conditions are complex. Financial advice from a qualified financial adviser is recommended and helpful.
    Contact Katherine Hann on 08 8299 9927 to determine if you meet a condition of release and how to make the best use of your super funds for your own individual situation.

    Why should I put money into Super?

    Katherine Hann | 29-Mar-2016

    Why should I put money into Super?
    Super is simply the name for money that is preserved until a certain requirement is met (for example retirement or age). If you put money into super, you will have more to live on in retirement. Think of it as savings.

    It can also be taxed at a lower tax rate than you usually pay on your non super money. So, in a nutshell, the key things that make super different are access and rates of taxation.

    So what kind of contributions can you make and how is it taxed?

    Super Guarantee Payments
    These are the payments made by your employer and the current minimum is 9.5% of your salary. Don’t think about this as your employer’s money-this is your money!
    It is also known as a concessional contribution and is taxed at 15%.

    Salary Sacrifice
    This is where you arrange with your employer to pay some of your before-tax salary into your super fund.
    Income tax doesn’t apply to salary sacrifice contributions within the contribution limits – they are instead taxed at just 15%. Marginal tax rates can be as high as 49%, so salary sacrificing can reduce the overall rate of tax that you pay. This is also a concessional contribution.

    After Tax Contributions
    These come from sources that have already been taxed – for instance, savings or the sale of an asset. Under certain limits, no additional tax is payable on these contributions. This type of contribution is a non-concessional contribution.

    Take advantage of the Government’s co-contribution scheme
    If you choose to make after-tax contributions and earn less than $50,454 during the 2015-16 financial year, the Government could boost your super balance by up to $500.

    Get a Spouse Contributions Tax Offset if your spouse is a low income earner
    If you have a spouse who is eligible, you could get a tax offset if you make a super contribution on their behalf. Your contribution up to a limit of $3,000 could give you a tax offset of up to $540.

    Caps apply to both concessional and non-concessional contributions as well as rules depending on your age and work status.

    Super funds are not required to aggregate the total of member contributions received for a person either within the fund or across other funds.

    This can be complex and if you get it wrong, penalties can apply.

    It can help to talk to a financial adviser, who can guide you through all the ways you can make your super work harder for you. Call Katherine Hann on 08 8299 9927 for a no obligation discussion today.

    Do You Need Personal Risk Insurance?

    Katherine Hann | 23-Feb-2016

    Do you need Personal Risk Insurance?
    The answer is probably, yes!
    Did you know that 95% of Australian families do not have adequate insurance cover?
    It is a common fact that most families will insure their car which may be valued at $50,000, their home contents valued at $100,000 but not their income valued at $1,000,000!
    The reason for personal insurance may be a scary topic but it’s nevertheless a crucial part of any financial plan.
    If you’re not sure that you really need personal insurance, ask yourself the following questions:
    • If you died, would your family be able to survive without your income?
    • Could your children still go to a private school, go on holidays or be able to have those little luxuries you always wanted for them?
    • If you had a bad accident or a long-term illness, how would your family pay the bills?
    • If you don’t have a family, who would look after you and would you be able to afford the care?

    What are the types of personal risk insurance?
    There are basically four different types:
    Life insurance
    A lump sum payable on death or terminal illness. This can help support your dependants to maintain living standards or pay off debts.
    Total and permanent disability (TPD) insurance
    A lump sum to help support you if you are totally and permanently disabled due to illness or injury.
    Income protection insurance
    A monthly income stream to help support you if you are temporarily unable to work because of illness, accident or injury.
    Trauma insurance
    A lump sum to help support you if you are diagnosed with a specified major medical condition (eg. heart attack, stroke or cancer).

    Ways your adviser can help
    • Your financial adviser can help interpret the various insurance policies and find the right mix of cover to suit your needs.
    • They can outline the pros and cons of waiting periods, different insurance providers and premiums (cost).
    • Based on your current investment portfolio and earnings they can ensure your level of income is protected should the unexpected happen.

    It usually takes something frightening, like a friend or family member who gets sick or has an accident that causes a personal wake-up call-don’t leave it too late, contact your financial adviser today!

    What kind of investor are you?

    Katherine Hann | 16-Feb-2016

    What kind of Investor are you?

    The first thing to remember when you answer this question, is there is no right or wrong answer.
    It is what you are comfortable with that is important (commonly known as the sleep at night test!).

    Below are three broad categories of investors-remember, the more risk you take the more chance you have of a higher return, but also of having a negative return or losing money.
    Conservative
    You don’t really want to risk your money and seek to protect most or all of your capital. You are happiest investing in cash, term deposits or bonds and realise you won’t make much of a return above inflation.
    Moderate
    Medium risk investors are generally comfortable with significant ups and downs in the share market and understand that this is required for long term gain. Capital is spread across all asset classes with 50% in growth assets, such as shares (both Australian and International) and 50% in cash and bonds.
    Growth
    High risk investors are quite comfortable with the volatility of share markets and expect to make a higher return in reward for more risk in the long term. Up to 80% of the capital is invested in growth assets.

    Approximately 80% of Australians have their super invested in a balanced option as it usually the default investment choice. A word of caution here-balanced can mean many things depending on which super fund you are with. Some balanced funds actually have an underlying growth investment and you may be taking more risk than you are aware of.

    Have a conversation with your financial adviser to determine your risk profile and together organise an investment that helps you sleep at night.

    Superannuation,are you on track?

    Katherine Hann | 09-Feb-2016

    Superannuation, are you on track?

    It may not seem important to you now, however your super is probably what you will use to live comfortably in retirement.
    It is part of your financial future, just as paying off your mortgage, saving for a holiday or buying that new car.
    Here are some simple steps to help you sort out your super which could add thousands to your retirement savings!

    Check your super statement
    Actually open the envelope you have received from your super company and read it! Get to know your balance,
    investment options and what insurance you may have.

    Find your lost Super
    If you have had more than one employer over your working life, you may have super that you have lost track of.
    You can track your lost super using the Australian Tax Office (ATO)’s Super Seeker. https://superseeker.super.ato.gov.au

    Simplify your super
    If at all possible, have one super account-you will save on fees! A note of caution here,
    there may be a very good reason you have more than one account, for example for insurance purposes.
    Check with your super company or adviser before rolling all of your super into one account.

    Add extra to your super
    You can do this by adding after tax contributions, this may come from savings,
    sale of an asset or spouse contributions and may even help you take advantage of the government co-contribution if you earn less than $50,454 per year.
    You can also salary sacrifice into your super by making contributions before tax. You need to have an arrangement with your employer for this to occur.
    Salary sacrificing could save you tax, so it is worth considering.
    Please be aware that there are limits to the amount you can contribute-talk to your adviser before putting this in place.

    It is almost never too late to make the most of your super but the earlier you start, the better off you will be-talk to your adviser today!

     

    Yes Virginia, you really can have a convertible

    Katherine Hann | 17-Nov-2014

    Ok, you might have had a part time job in high school, but let's face it, you probably spent all you had each week. You just had to have that outfit for Saturday night, petrol to go and see your friends or pay your phone bill.

    Now you have your first full time job and you have all this money you never had before - but where did it all go?

    Here are some simple things to do to keep track and maybe even save for something important to you. 

    Yes Virginia - you really can have that car!

    • Know what you get paid each week or fortnight - that is your income.
    • Check your payslip against what goes into the bank - remember that your payroll department will take out taxation and superannuation payments.
    • You may know how to use internet banking and find it easy but if you don't, learn how. Your bank will teach you!
    • Set up 2 more savings accounts so that you have 3 accounts in total - it shouldn't cost you anything and if it does - change banks.

    What do you need 3 savings accounts for?

    • General account - this is the one your pay goes into
    • Bills account - this is where you put money away to pay for those bills you know are coming
    • Savings - this is where the money will come from for that car!

    Next time, I will talk about how to work out what to put away in each account, so stay tuned and you will get better about understanding your own money. It is called Financial Literacy and you can do it!