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Category: Provision Newsletter Articles

How to have a budget friendly holiday this summer

Date: Nov 30th, 2017

Holidays usually equal good times, but they don’t have to equal big money. 

Everyone loves saving a dollar or two, and one place it really pays to stretch your money further is on holidays. After all, the more cost effective your holidays are, the more of them you can afford to have!

If you’re still searching for a destination to escape to this summer, we’ve got some suggestions below that won’t break the bank, plus some smart money saving tips whatever your holiday budget.

Holidays close to home

You don’t have to travel miles from home to get that carefree holiday feeling. We’re lucky enough to be blessed with some pretty spectacular scenery here in Australia, and also some pretty fabulous summer weather.

Jumping in the car and heading a few hours away, either to the coast for a beach holiday, camping for a national park adventure, or to your nearest capital city for a city break all offer their own rewards.

Travel by car cuts the cost of your holiday, but to stretch your money even further, choose self-catering accommodation through sites such as Airbnb so you can save more by cooking some meals for yourself too.

Another option:

For another idea closer to home (and even cheaper) consider a staycation – where you stay at home, but live like you’re on holiday. Think eating out at local restaurants you haven’t had the time to try, getting a massage, going to the movies, and visiting local tourist attractions.

Holidays around Australia

The number of easily accessible Australian destinations continues to grow as budget airlines like Tigerair and Jetstar expand their flight routes. And it’s not just the capital cities you can fly to on the cheap, but major tourist destinations like Uluru, the Gold Coast and the Whitsundays.

If you’d like to explore somewhere different, you can also find inexpensive flights to lesser known local destinations like Townsville, Newcastle, or Launceston, depending on where you live.

One advantage of visiting regional cities or some of Australia’s smaller capital cities, such as Hobart, Adelaide and Canberra, is that the on the ground costs – think accommodation, eating out, attractions – are often lower than Sydney or Melbourne prices.

The key to getting the best flight deals is to keep an eye out for special offers and be flexible – both on when you fly and where you go.

Another option:

Another idea for a good-value Australian holiday is a short cruise. While some short cruises travel between destinations such as Melbourne and Sydney, others, called sampler cruises, depart from, and return to, the same port.  In the case of a cruise the travel is part of the holiday, and the all-inclusive nature, with food and entertainment included, can make them good value. For more information, check out Royal CaribbeanCarnival or P&O.

Holidays overseas

Destinations like Fiji, Bali and other parts of the Pacific Islands and South East Asia are popular with Australian’s looking to holiday overseas – and for good reason.

With budget airlines flying to these destinations, favourable exchange rates and lower costs of living compared to Australia, you can certainly get bang for your buck in destinations such as these, though they may not be as cheap as they once were.

Also on the pocket-friendly list, a destination which offers affordability and plenty of variety is New Zealand.

Another option:

For other overseas destinations it pays to keep an eye on currency exchange rates. Destinations you may have though out of reach on a tight budget, such as the US, become much more affordable when the Australian dollar is high against the US dollar. And if you can be flexible with timing, travelling in the off-season or shoulder seasons can also help you grab a bargain.

Source : AMP 20 November 2017 

This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person..

How to deal with financial stress – nearly 1 in 3 affected

Date: Nov 30th, 2017

See how financial stress is impacting people’s physical and mental wellbeing, and what steps you could take to turn things around.

Close to one in three Aussies is feeling the pinch financially, with money worries reportedly leading to sleep loss, conflicts in relationships, isolation, as well as a range of other things1.

These were the findings from the inaugural Financial Stress Index, compiled by global research firm CoreData on behalf of Aussie group, Financial Mindfulness, which indicated financial stress is not only being experienced by low-income households in 20172.

We check out some of the statistics from the research, what defines financial stress, and what steps you could put in place to potentially improve your financial position and overall wellbeing.

Findings from the research

Statistics from the Financial Stress Index revealed the following about financially-stressed Aussies3:

  • More than 66% felt money worries led to feelings of fear, anxiety and/or depression

  • More than 60% felt their physical health was affected by financial stress

  • About 75% said they argued about money with their partner or family 

  • More than 70% said they had problems sleeping due to money concerns

  • Nearly nine out of 10 said they often avoided social functions due to financial stress.

What defines financial stress?

According to the Australian Bureau of Statistics, there are two financial stress indicators—these include financial-stress experiences and missing-out experiences4.

Some examples of financial-stress experiences include:

  • You’re unable to pay various bills on time

  • You spend more money than you receive

  • You can’t raise $2,000 in a week for something important

  • You seek assistance from friends, family or welfare and community groups.

Some examples of missing-out experiences include:

  • You’re not able to afford a night out once a fortnight

  • You can’t afford a week-long holiday once a year

  • You can’t afford friends or family over for a meal once a month

  • You aren’t able to cover any recreational activities.

Actions that could help turn things around

Create a budget

Writing down what you earn, owe and spend could help you to create a workable budget, and at the same time let you quickly identify areas where you could be saving.

Save a bit of money regularly

Even a small amount of cash deposited on a frequent basis could go a long way towards your savings goals. In fact, 41% of Aussies say they save just a little at a time5.

Take cash and leave your credit card at home

Credit cards are handy but they’ll often cost you as they typically charge high interest rates on top of the amount you’ve already taken out.

Write a grocery list that only includes what you need

Over a 12-month period, Aussies will waste more than 4 million tonnes of food, which is enough to bridge the gap between Australia and New Zealand three times6, so it’s worth a thought.

Prioritise your big-ticket items

Buying a car, going on holiday, and moving home all within a six-month period mightn’t be financially viable. Spacing things out and creating a manageable goals timeline might help.

Put some emergency cash aside

This will help next time you bust your phone or need a last minute trip to the dentist. Plus, an emergency fund means you won’t have to rely on high interest borrowing options.

Talk money with your partner

One in two Aussie couples admit to arguing about money7, so if you haven’t already, sit down and make sure you’re on the same page, and that both parties’ goals are being considered.

Call other providers

You more than likely have several product and service providers, and figures show you could save more than a grand annually on energy alone just by switching from the highest priced plan to the most competitive on the market8.

Consider the value of a back-up plan

Whether it’s life insurance, income protection (which provides up to 75% of your income if you can’t work due to illness or injury), or contents insurance to cover items that may be lost, damaged or stolen, there are a range of insurances that could help should the unexpected happen.

Care about your future income

The government’s Age Pension alone is unlikely to be able to cover a comfortable or even modest lifestyle in retirement9, so putting a little extra into super while you have time on your side could reduce the potential of further financial stress later on.

If you seek further discussion on this topic please contact us on |PHONE|

If you or someone you know are feeling financially stressed, there is help and information available on the beyondblue website or you can phone Lifeline on 131 114.

 Source: AMP 21 November 2017 

1 – 3 CoreData / Financial Mindfulness Financial Stress Index – 2017 full press release
ABS – Household Expenditure Survey, Australia: Summary of Results, 2015-16 paragraph 2, 3, 4
ASIC’s MoneySmart – How Australians Save Money table 1
Foodwise: Reduce Food Waste – Food Waste Fast Facts table 1
Finder – Heated conversations: 1 in 2 Aussie couples argue about finances paragraph 1
Mozo: Sick of high energy bills? Aussies willing to change providers could be saving over $1,000 a year paragraph 2
The ASFA Retirement Standard – June quarter 2017 paragraph 4


 This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person..

Avoid a nasty case of holiday debt lag

Date: Nov 27th, 2017

Enjoy a well-earned vacation without bringing home a mountain of high-interest debt.

I do love a catchy new phrase, and this one made me laugh. “Debt lag” is a new one for me. It seems that as Chrissy approaches we plan a holiday, but don’t quite get around to saving for it. So some 2 million of us turn to our credit cards on vacation, and cop a nasty case of debt lag!

Among the holidaymakers who return home with a maxed out credit card, half clear the slate within three months. But the remainder can take anywhere from six months to more than a year to pay off their holiday debt.

Vacations see card spending climb by $2,000

Taking a credit card on vacation can make a lot of sense. It’s a lot more secure than carrying wads of foreign currency, and it provides a handy back-up if you run low on the folding stuff. And let’s face it, that’s easily done. Vacations tend to encourage a sense of bonhomie, which can see us splurge on things we wouldn’t even think about buying at home. (A colleague of mine is still questioning the pineapple-shaped slippers she picked up in Hawaii.)

There’s no problem with a bit of overspending – if you can afford it. After all, holidays are meant to be enjoyed. But Australians rack up an average of $2,000 on their credit cards while on vacation, and unless you can pay off the balance immediately the outstanding interest charges won’t just take the shine off a trip’s happy memories, they could leave you cash-strapped well into 2018.

Plan, pay ahead and avoid tourist rip-offs

The key to avoid blowing your vacation budget is to plan how much you’ll spend and how you’ll pay for it all. Most holidaymakers set a travel budget but only around one in two stick to it.

Doing plenty of online research can give you an idea of the sorts of costs you’re facing, and from here it’s easier to set daily spending limits.

Where possible, aim to book and pay for accommodation, tours and even entry to attractions before you leave home so you’re not facing inflated tourist prices.

Bypass the gripe costs

Surprisingly, the most cited rip-offs mentioned by Australian travellers are not dodgy souvenirs that fall apart before you reach the airport. Rather, credit card and ATM fees plus mobile phone roaming charges are among the biggest gripes. Yet these are easy to control.

Read the fine print of your credit card and/or travel card to understand any fees you may be slugged with. When it comes to phone charges, either purchase an add-on pack with your local Telco – it’s likely to be far less costly than pay-as-you-go roaming, or ditch your local SIM altogether. Picking up a prepaid SIM at your destination is a low cost way to stay connected while you’re away.

Source: AMP 23 November 2107  

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person..

5 considerations before moving into a retirement village

Date: Nov 27th, 2017

It’s important you understand how retirement villages work and the type of costs you’re likely to come across.

Today, around 184,000 Australians call a retirement village home. And, with the country’s senior population only set to increase, the number of people wanting to live in a retirement village is predicted to more than double by 20251.

If it’s something you or a family member have been thinking about, a national survey revealed 93% of retirement village residents felt their overall happiness and life satisfaction remained the same, or had increased slightly to significantly since making the move from the family home2.

If you’d like to know more, we’ve pulled together some general information, as well as some of the costs you’re likely to come across. Remember, it’s also important you speak to a professional and are across any contract complexities before making any decisions.

1. What you can expect 

Retirement villages are generally complexes made up of individual residences. While they were traditionally designed to cater to the needs and lifestyles of people aged 55 and over, the average age of new residents entering retirement villages is currently 753.

Retirement villages are typically self-funded and do not receive government funding or subsidies4. Many offer a range of health, leisure, and support services, and will often include medical facilities, as well as recreational facilities, such as community halls, bowling greens, libraries, and pools.

2. How village residents rate life

According to a national census, the three main reasons residents said they wanted to move into a village were, they wanted to downsize while they could, their former home was becoming too big to manage, and they wanted freedom from house responsibilities to pursue other interests5.

Here are some additional insights from the survey 6:

  • 68% of residents stated their confidence and feeling of security increased slightly to significantly after moving from the family home to their retirement village

  • 73% of residents stated that they were ‘very satisfied’ to ‘extremely satisfied’ that their expectations of their retirement village had been met

  • 75% said they were happy with their decision to move into their retirement village and would make the same decision again.

3. The most common way to pay

There are many different payment models—the ‘loan/licence’ (or licence to occupy) model a popular one among retirement villages7.

Under this model, here are some common costs and considerations you’re likely to come across—and note, the way figures are calculated will differ depending on the retirement village8.

Typical costs include:

  • An entry contribution, which may be refundable, minus an exit fee (commonly referred to as a deferred management fee), which will be payable on your departure

  • Ongoing charges to cover things like maintenance and general services provided by the village, which may still be payable for a period of time after you’ve left.

You also need to consider:

  • How capital gains may be retained by the operator and shared with you upon your exit

  • The potential for special levies to fund new services or refurbishments.

4. How different payment models can vary

The Australian Government has indicated that different fee structures make it difficult to compare the affordability of different retirement villages9, but here’s some general information on the three most common payment models to give you a bit of guidance10:

Loan/licence

  • This model is used by about 50% to 60% of retirement village operators. 

  • As mentioned above the main fees include an entry contribution (which may be refundable), an exit fee, and ongoing service costs.

  • It’s important to note, your license agreement is not registered with the Land Titles Offices, and as such, offers lower security of tenure than a leasehold or freehold title.

Leasehold

  • This model makes up about 30% of retirement village arrangements, offering residents a long-term lease for accommodation, in exchange for a lump-sum payment. 

  • Leases are registered with the relevant Land Titles Offices, which offers residents security of tenure, but which may also attract stamp duty. 

  • Upon departure, you’re entitled to a lease termination payment minus the exit fee (deferred management fee). And note, in some cases, you will not receive your payment until a new resident takes over the lease.

Freehold title

  • These models, where residents have 100% ownership of their retirement village unit, are not particularly common and make up less than 10% of retirement village arrangements.

5. Why contract terms are so important

There is much to think about when assessing your living arrangements in retirement, particularly when it comes to signing contracts and making sure you understand the fine print.

How different villages charge can vary significantly and some residents may be subject to different fee structures. On top of that, what you pay could also change over time to reflect occupancy demand, changes in ownership and fluctuations in property prices11.

Depending on the arrangement, there’s the potential to benefit from having access to home equity or to defer a large portion of your costs until a later date12.

For these reasons, it’s very important to speak to your financial adviser and a legal professional before signing anything. 

If you seek further professional advice please contact us on |PHONE| 

Source : AMP 24 November 2017 

1, 4 Property Council of Australia – National overview of the retirement village sector – October 2014 pages i, 2
2, 5, 6 
The McCrindle Baynes Villages Census Report 2013 pages 8 / 5 / 8, 7, 5
PwC / Property Council Retirement Census 2016 pages 3
7 – 12 
Housing Decisions of Older Australians Productivity Commission Research Paper – December 2015 page 99 / 99 / 100 / 99 / 100 / 101

This article provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

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