Money tips

Financial planning services are provided by Bendigo Financial Planning Limited

Good debt

Borrowing money to purchase growth assets – or those that will continue to provide you with an income – can be considered "good debt" because it will increase your net wealth over time and help you move toward a financially secure future.

Bad debt

"Bad debt" on the other hand consists of depreciating lifestyle assets like cars, clothes, televisions, and other consumer items. They're the types of purchases that will depreciate in value almost immediately and may even end up generating extra expense in the long-term.

Like everything in life, creating the right balance is important – you shouldn't have to go without life's luxuries altogether. If you invest early, you'll have more money to spend on enjoyable purchases throughout your life.

Be smart with super

When you do retire, you'll want enough money to enjoy it – and that's where superannuation comes in.

In addition to your take home pay, your employer is legally required to put 9.50% (prior to 1 July 2014 the rate was 9.25%) of your earnings into your nominated superannuation fund, unless you're under 18 or earn less than $450 a month.

For many of us, super is likely to become one of the biggest assets we'll ever have. So with such a sizeable amount of money being invested on your behalf, it pays to be interested in super.

Keep track of what you've got

You don't want to end up with multiple super accounts – because with each new account comes another set of fees and an increasing likelihood that you'll lose track of the money you have invested.

Instead, choose a fund with competitive fees and a consistent performance record and consolidate your money into one superannuation fund.

If you think you might have some 'lost' super, you can look for it via the Australian Tax Office website.

Boost your super

Do you earn less than 48,516 in eligible income such as wages? If you do, then you could benefit from the government's co-contribution program.

A co-contribution is a payment the government makes into your super fund when you make a personal contribution. If you earn less than $33,516 they'll pay $0.50 for every $1 you contribute (after tax), up to a maximum of $500.

So if you deposit $1,000 into your super account, you'll actually be boosting your super by $1,500. That's a significant incentive to get you investing in your future.

The co-contribution amount drops for each dollar you earn over $33,516, phasing out if your eligible income is over $48,516.

For more information, visit the Australian Tax Office website and search "super co-contribution".

Why not speak to your local branch or make an appointment with a Bendigo Financial Planner.

Doing business

Business risk protection – get it before you need it

While you think about your business every day, you probably don't think about how it might cope without you, or indeed how you might cope without it.

Just like every other sort of insurance, business risk protection is something you need to think about and plan for. Perhaps because they hope never to need it, few businesses understand how to assess the value of business risk protection.

To do this you'll need to determine the value of your business, who should be left with what after the departure of a business party, and how any agreement should be documented.

If you're sitting on the fence, or think you'll get around to it someday, take a minute or two to ask yourself the following questions.

  • What would happen to my business if I were sick or injured?
  • Will my current insurances be enough to pay off my debts and keep my family comfortable?
  • Will I be able to meet my lifestyle expenses without a regular income?
  • Will I be able to pay my ongoing business expenses if I'm unable to work for 12 months?
  • Do I have a contingency plan for the business?

If you answered "no" to just one of these questions, it may be time to talk to a Bendigo Financial Planner about your business risk insurance options.

Make an appointment with a Bendigo Financial Planner.

Moving up

Buying your first home

If becoming a homeowner is something you're working towards, a Bendigo Financial Planner can assist you with savings strategies to help you get the most from your money. Combined with advice from a Bendigo Bank branch manager or lender, your dream of owning your own home can happen sooner than you think.

Educating the kids

It's never too early to start saving for your children's upbringing and education – raising a child today is not cheap. Your Bendigo Financial Planner can help you with choices ranging from a regular savings account to managed funds, trusts, or even a simple loan.

Protecting yourself, your family and your assets

Insurance shouldn't be complicated and expensive. Following an assessment of your current and future commitments and needs, your Bendigo Financial Planner can help determine the most appropriate insurance cover to protect you and your family. From life insurance, income protection, key person insurance or house and contents insurance your Bendigo Financial Planner can help provide you with peace of mind. Don't find yourself in the unfortunate position of wishing you had insurance when it's too late.

Getting into the share market

It sounds obvious, but one of the easiest ways to start investing in the share market is to start small. With an initial investment of as little as $1,000, and by adding just $100 a month, you can start a regular investment plan in a managed fund. Many superannuation funds also give you this option.
Investing in shares needn't be complex. Your Bendigo Financial Planner will guide you and help make it easy to understand.

Investing in property

Investing in property is a long-term strategy. Typically, an investment property isn't easy to sell quickly if your circumstances change. Before you invest in an asset, understand the fundamentals behind each asset class.

Borrowing to invest

Borrowing to invest can help you increase your long-term wealth, so you can potentially reach your financial goals sooner. Just as many Australians have improved their financial position by borrowing to invest in property – margin lending allows you to apply the same philosophy to the share market.

Portfolio planning

If you've been investing in shares or superannuation for a while, it may be time for a financial health check. Your Bendigo Financial Planner can review the performance of your investments against your appetite for risk. Ideally your investment portfolio should include a good balance of diversified assets such as cash, property and shares appropriate to your situation.

Your will

If you're like most people, you probably don't like to think about what will happen when we're no longer around. But if you put your affairs in order you can relax, knowing that your personal wishes will be followed and those most important to you looked after. Your Bendigo Financial Planner can provide advice on estate planning, and refer you to professionals who can assist with the preparation of your Will and Power of Attorney.

Make an appointment with a Bendigo Financial Planner.

Moving on

  • If you're over 60, any lump sum or regular income from superannuation benefits are tax-free
  • You can no longer be forced to withdraw your money from super when you reach retirement age
  • Centrelink's assets test has changed. Now for every $1,000 in assets over the prescribed limit, you will lose $1.50 in pension entitlements, rather than $3
  • If you're aged between 65 and 74, you only need to work 40 hours in a consecutive 30 day period during the financial year to contribute before or after tax money into your super

You should consider your retirement an ongoing journey and regularly look for ways to make the most of what you have. Your Bendigo Financial Planner is available to help you understand opportunities and implement strategies to maximise your retirement income. Many retirement strategies are simple enough for you to act on independently, while others are more complex.

All Bendigo Financial Planners are qualified professionals who comply with the Financial Planning Association's code of conduct and are committed to providing advice you can trust.

Asset rich but cash poor?

You're not alone. Thousands of older Australian homeowners find themselves in the unenviable position of having to watch every dollar, while most of their money remains locked in their single biggest asset, their home. If you're like most, you don't want to have to sell your home just to access the value locked up in your property. Keep in mind there are alternatives available that won't require you to sell the family home before you're ready.

Make an appointment with a Bendigo Financial Planner.

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