Many of our clients have young families and after five long weeks of sleeping in or doing things on their own time, the alarm bell announcing that first day of school will certainly be a rude awakening. Here are some of our top tips that we use in our households for easing back into the school term and staying organised while we are at it!



Back to School on a Budget

Buying back-to-school essentials is a financial headache for many families with a new survey reporting that 60 percent of primary school parents find it stressful. Not surprising when the average family apparently coughs up $600 on back to school stationery, shoes and equipment. Don't break the bank before the year has even really begun. Minimise the expense instead with these tips to save on back-to-school supplies.

• Look at home first 
  

Before you hit the shops, rummage through your child's school bag, room, desk and the family office to see if there are any items on your child's 'must-have' list, that he does in fact already have. This first tip may just halve your shopping list;

• Give yourself plenty of time 
  

You'll pay top dollar for the convenience of buying last-minute school supplies at the newsagency. Instead, check junk mail ads for sale items and shop online for the best price. If possible, wait until school starts and then hit the clearance sections of the big department stores for bargains;

• Buy in bulk 
  

Big savings can be made if you buy in bulk. But if you don't have the space to store 20 boxes of notepads and 50 boxes of pens, team up with other parents to share the supplies - and the discount;

• Use those freebies! 
  

Instead of buying pencils and notepads, send your child back to school with the free ones that businesses hand out (you know, the ones that are currently taking up space in your junk drawer); 

• Pretty up stationery 
  

Plain Jane school supplies always cost less than their fancier counterparts, but let's face it, to a child they just aren't as fun. The solution? Buy the budget-friendly basics from the bargain store and then let your child jazz them up with stickers and labels;

• Only buy what you need 
  

This one sounds obvious, but it should be the golden rule of back-to-school shopping. If your child doesn't need a new pair of school shoes, don't add this to your shopping list just because it's the start of a new school term. Make a list of what he really needs and stick to it. Religiously;

• Buy quality 
  

The saying 'you get what you pay for' is true, but especially so with school supplies. Don't just grab the cheapest option available. Spend some time looking at how things are made, and choose the products that look like they're going to last a few years. Go for the expensive back pack with the lifetime warranty; choose the spiral notebooks with the durable plastic covers. You may spend more now, but it means you won't have to buy replacements later and you'll end up coming out ahead;

• Go online 
  

Avoid the hassle of crowded aisles by shopping online. With the click of a mouse you can compare prices and find the cheapest deals online. Plus, you'll save on petrol!     
 
Term and School Holiday Dates 

Check out the key school term and holiday dates for 2014 here...

5 Ways to keep the kids organised at school

It's never too early (or too late) to teach kids how to get and stay organised for school. The skills they learn now will carry over into high school and ultimately their careers and home management as adults.

1.     Establish a great homework routine 
Determine the best time for daily school work and stick with it. For some kids, it will be right after school. Others may need some downtime to play, and then it's time to hit the books. The most important thing is to stick to the schedule so your child knows what's expected;

2.     Set up the space
Have a designated study area, such as the kitchen table;

3.     Make sure you know what's going on
Instruct children to unload their backpacks as soon as they come home. Have them hang up their bags in a designated area for easy access tomorrow and bring homework to the designated study area. Check in each day so you're aware of their workload and take special care when they seem overwhelmed;

4.     Encourage the use of lists and planners 
The older kids get, the more homework and activities they'll have. Teach them to manage their tasks with the use of simple lists or a planner or calendar of some sort. When they learn of upcoming assignments, tests, or events, they should write them down in their planners;

5.     Encourage colour coding 
Colour affects our mood and memory so let kids pick the colours of their folders and notebooks to correspond to different classes. If green reminds them of science, then they'll know instantly to grab the green notebook when looking for their science notes. 

Make lunchtime fun with these easy school lunch recipes

Chicken & Corn Wraps  

Ham, Pineapple & Cheese Pizza Scrolls 

Oat & Choc-Chunk Cookies

Contact Us

Now that you have an insight into some of the tricks that we use to keep our kids focused, Contact Us to discuss how we can help ensure your finances are on track to spoil the family with a holiday at the end of the school term.

Source: www.kidspot.com.au

A New Year should be an incentive to get your finances in order. But what does financial fitness mean? We believe it is about having financial predictability and security and ensuring your spending habits are under control.

Here are Southern Advisory’s top tips for forming successful resolutions for financial fitness this year and beyond.

1.     Review your Expenses 

If you don't have a budget, it’s time to think about one. If you do have a budget, resolve to stick to it. Reducing big expenses isn't easy, but keeping your overheads in line with your income can give you far more flexibility to handle financial setbacks. 

2.     Deal with your Debt 


Credit card debt is one of the main reasons people can’t get ahead. New research from comparison site creditcard.com.au shows one-in-four people never meet the required payment every month and one-in-five have three or more credit cards in their wallets. So resolve to pay off those credit cards or think twice before paying with plastic.

3.     Protect what you've got 

The fundamental role of insurance is to protect you and your loved ones. It's not meant to cover expenses you could easily pay out of pocket, but to cover larger debts like mortgages or ongoing medical treatment. What would happen to your family if you were not around to support them?

4.     Write or update your Will 

Wills are not just for the rich. Regardless of how much or how little money you have, a will ensures that whatever personal belongings and assets you do have will go to family or beneficiaries you designate. If you have children, a will allows you to appoint a guardian for them in the event of your death.

5.     Save, Save, Save!


To strengthen your money picture, you'll have to replace bad spending habits with good ones. It’s a good idea to put funds away for the long term. That can mean paying down debt and/or putting money into a savings account. Think about starting an automated investment system.

6.     Seek Advice

One of our Planners can help you by giving advice on your specific circumstances. Contact Us for an obligation free consultation.

Fortunately, if you can make small changes early on, by this time next year your financial picture can be greatly improved. So what are you waiting for? Get financially fit for 2014!

Implications for asset markets


Author: Hamish Douglass – CEO and Portfolio Manager, Magellan Global Fund



Since late 2008, the United States Federal Reserve has grown its balance sheet dramatically via massive bond-buying programs designed to reduce long-term interest rates in the United States. This has squeezed investors out of the US government bond and mortgage bond markets, forcing them to chase higher investment returns elsewhere. As a result, other asset classes have benefited. The major issue for the United States Federal Reserve will be how it implements its policy to unwind Quantitative Easing (QE) without reversing these effects or triggering major market dislocations around the world.

The critical issue is that most of the cash paid out by the United States Federal Reserve (to financial institutions) over the course of its asset-purchase programs is still being held as excess banking reserves at the United States Federal Reserve itself. If this money was injected into the US economy, via bank lending, it would cause massive expansion of the money supply, potentially with adverse inflationary implications. To prevent this, the united states Federal Reserve would have to either substantially reduce the scale of the results (such as increasing the interest rate payable on excess reserves, selling assets directly in the open market or raising bank reserve requirements), these tools present their own problems.

There is no good historical precedent that can guide us as to what will happen in markets as QE unwinds. However, we see two main scenarios that could play out:

1.       An orderly unwinding of QE

This scenario is predicted on a steady, but not sharp, US economic recovery with a gradual increase in the demand for credit. With this backdrop, it is likely that the United States Federal Reserve could gradually reduce excess banking reserves, by utilising a combination of policy tools, without any real threat of materially higher inflation expectations. Under this scenario, we would expect elevated market volatility and, potentially, some dramatic re-pricing of certain asset classes. We view this as the most likely scenario and one that does not overly concern us from an investment or portfolio perspective.

2.       A disorderly unwinding of QE

This scenario could be triggered by a sharp US economic recovery coupled with a strong demand for credit. Such a scenario could be driven by a strong improvement in US house prices and a significant increase in demand for consumer credit, such as home equity loans. Under this scenario, long-dated bond yields could start increasing rapidly as markets lose confidence in the United States Federal Reserve’s ability to exit QE in an orderly manner.

A rapid rise in US long-dated bond yields would likely cause massive market dislocations and increase global systemic risk. We could see large and rapid falls in asset prices, major moves in currency markets and massive global monetary flows. Liquidity could be rapidly withdrawn from certain emerging markets, which could trigger an event similar to the 1997 Asian crisis. We also believe that a rapid rise in longer-term US interest rates is very likely to drive up corresponding interest rates around the world. This could place enormous pressure on certain European countries and could re-ignite the Euro-crisis.

The difficulty in trying to assess how this situation will end is that it is likely bond investors will re-price longer-dated US bonds to more normal levels prior to the United States Federal Reserve unwinding QE.

This increases the risk of a disorderly unwinding of QE as bond yields will already have moved higher when the unwinding actually begins. We continue to monitor the possible warning signs to determine whether the probability of the disorderly scenario is materially increasing. Overall, however, we assess the risk of a disorderly unwinding of QE to be a ‘fat tail’ or low probability scenario. Unfortunately, as we have repeated on many occasions, low probability does not mean zero probability.

If you would like to discuss your situation with one of our Planners, feel free to Contact Us

Source: The Charter Journal

Doing the right thing for your superannuation also means knowing what not to do. It can be easy to get caught out if you are not aware of specific rules and restrictions. Here are 4 tips to help you make the most of your super contributions.



1. Do avoid the 'traps of caps'

Contribution caps limit how much you can contribute to your super in any one financial year without incurring excessive tax. They are designed to prevent people taking unfair advantage of super’s preferential tax treatment, while encouraging those who need it most to contribute.

Contributing to super is one of the most tax effective ways of building financial security for your future. But exceeding the caps can be a costly mistake. Contributions over the caps are taxed at  46.5% for excessive non-concessional contributions and 31.5% for excessive concessional contributions. This is in addition to the 15% contributions tax that has already been paid by the super fund.

Even if you exceed the caps by making an inadvertent error, you will still generally have to pay the higher rate of tax. If you think this can’t happen to you, 65,000 people breached their concessional cap in the 2009-10 financial year, up from 28,000 people the previous year1.

The Government recently introduced legislation which will allow excess concessional contributions to be taxed at an individual’s marginal tax rate, plus an interest charge (recognising that excess contributions tax is collected later than personal income tax). This will apply to contributions made on or after 1 July 2013.  In addition, clients would be able to withdraw any excess concessional contributions made on or after 1 July 2013 from their superannuation fund without penalty.

Keep records of your super contributions and inform your financial adviser and tax adviser, so that you don’t risk exceeding the caps.

Contribution caps for 2012-13 and 2013-14

A higher concessional cap of $35,000 (unindexed) will apply to clients aged 60 or over from 1 July 2013 and clients aged 50 or over from 1 July 2014.

Concessional (pre-tax) contributions are generally made in three ways:

• compulsory employer contributions (known as Super Guarantee or Award contributions)
• salary sacrifice arrangements
• personal contributions claimed as a tax deduction by self-employed people.

Non-concessional (after-tax) contributions are personal contributions where no tax deduction has been claimed but may also include:

• excess concessional contributions
• spouse contributions
• excess Capital Gains Tax (CGT) contributions for example, in excess of the superannuation CGT cap.

2. Do consider making Non-Lapsing Death Nominations

Don’t assume your superannuation will always go to the beneficiaries nominated in your will. In fact, this may only be the case if your estate receives your super death benefit. To ensure your super fund pays according to your wishes, you may be able to make a Binding Death Benefit Nomination or a Non-Lapsing Death Benefit Nomination, which is also binding. Not all super funds offer these options (although most do), so talk to your financial adviser about the best way to allocate your super.

You should also consider the tax implications, bearing in mind that for tax purposes lump sum payments to dependants are tax-free, but taxable components paid to non-dependants will be subject to tax.

Your financial adviser can help you to determine whether a Non-Lapsing Death Benefit Nomination is appropriate for your situation.

3. Do find out how and when you can access your super

Preservation rules mean you can’t access your super until you meet a condition of release, including:

• retirement on or after preservation age (see table below)
• turning 65
• reaching preservation age and commencing a transition-to-retirement pension
• suffering from a terminal medical condition or being permanently incapacitated
• severe financial hardship as assessed by the trustee or on compassionate grounds as assessed by Centrelink.

The amount you can access may be restricted and subject to conditions.

A transition-to-retirement strategy may also be very effective and should be discussed with your financial adviser to see if it's appropriate for your circumstances. Make sure you understand the tax and estate planning implications of accessing your super as a lump sum or via an income stream.

4. Do review your long-term super strategies regularly

Your investment profile, including your appetite for risk, may change over time. It’s important to regularly review your super investment strategy.

Other factors to consider are the effects of inflation, tax and fees on your superannuation account and diversification. Spreading your super investments over different asset classes may offer better returns as well as reduce your investment risk.

While a lower risk strategy may help you sleep at night, you could be limiting the potential growth of your super balance, particularly if you have plenty of time before you plan to retire.

It’s worth speaking to one of our Planners at Southern Advisory to understand what investment options may be appropriate for you. Contact Us

Source: colonialfirststate.com.au