• Why not start at the mailbox? Make a list of your key financial tools – bank accounts, insurance, superannuation, credit cards, etc – reconcile the list, consolidate what you need and get rid of the rest. Better still, let your financial adviser help sift through the list and help you decide what the cull.
• Debt is the worst form of financial clutter. Think of debt as the unwanted ab machine that stops you getting into the cupboard to find the Christmas decorations. Move it into a manageable form in preparation for its removal.
• Speaking of the ab machine take some time to dig through those cupboards and spare rooms and get rid of those unwanted items. Sites like eBay and Gumtree make it easier than ever to sell your old skis or bikes while providing some extra cash.
• Fail to plan, plan to fail. Unless you have a clear financial path in mind, you’ll never achieve your goals. Spend some time each week reviewing your plans. With every transaction, ask how this fits with your financial goals.
• We all hate paperwork, but instead of tackling the problem once a year (normally about the time the tax return is due), set aside a few minutes each day or an hour each week to sort through bills, statements and accounts.
• Make it a team effort. Dad can cancel those unused magazine subscriptions, Mum can do without an extra pair of shoes and the kids can (maybe) hold-off on their latest CPI increase in pocket money. Check your progress regularly, set some targets but ensure everyone shares in the rewards.

But the flipside of this chemistry can prove a real financial problem. Say you’ve come home from work after a long and unrewarding day, feeling sluggish and depressed. In this dopamine- deprived state, many people reach for their credit card for some online retail therapy.

Consumer behaviour experts call it a ‘spending trigger’, and only a new set of Callaway golf clubs or a pair of Jimmy Choo pumps will put things right. Ordinarily, a trip to the nearest shopping centre isn’t realistic at 10pm – a fact that online retailers know only too well as they now meet the demand of this new shopping ‘happy hour’.

Online spending numbers are staggering. The NAB Online Retail Sales Index showed that for the year to July 2013, Australians spent around AUD 14 billion on online retail. This level is equivalent to 6.3 per cent of spending with traditional bricks and mortar retailers across the same sectors.

Sales are dominated by ‘pureplay’ retailers (online only retailers), who account for 70 per cent of total sales, and dominate sectors including daily deals and media (movies, books and music). ‘Bricks and clicks’ retailers (traditional retailers with an online presence) still lead the way in groceries/liquor, homewares/ appliances and games/toys.

To combat the temptation to overspend online, put a barrier between you and whatever you tend to overbuy. For instance, try noting things you want but wait until later to see if you really need them. If you log on for a Web-only sample sale and find your favourite item is already sold out, tell yourself, “try again tomorrow,” and log-off.

It’s also important to not keep your credit card on file by opting to enter your payment information each time. Delete cookies in your browser’s preferences from time to time to deny retailers information to coax you into purchasing their ‘recommendations’. In short, don’t let dopamine turn you into an online shopping dope!

If overspending online is becoming a serious issue, your financial adviser can help you with budgeting strategies to get your finances back on track.

Talk to the experts

Seeking financial advice can be a daunting experience. If you’re already struggling to make ends meet, paying a financial planner may seem like another cost you don’t need. It’s worthwhile meeting with a few before choosing an experienced planner you can connect with on a personal level.

Plan your route

Base your financial plan on a wish list. Write down everything you want. When do you want to retire? Do you want to change careers or spend more time with the family? Even if you can’t afford it all, put it all down. A financial plan focuses the mind on what is most important and what your future financial aspirations are. It will help you work out what you can afford and what is out of the question.

 Avoid the crevasses

Insurance can be just as important to your financial planning as other strategies. It can help to provide financial security and peace of mind, and enable you to protect your ability to earn an income in the event of accident, sickness, disability or even death. Regularly assess the importance and level of insurance as your life circumstances change.

Taking the steep path

It’s essential to think about how well you cope with risk and talk about it with your financial adviser. Having a range of investments across asset classes will help to spread the risk so that when one area is not doing well, another may compensate. Taking a long-term view of the eventual summit will also help you deal with the peaks and valleys along the way.

Keep the camp clean

Do you have a pile of statements and paperwork gathering dust and awaiting attention? Managing your financial plan is as important as starting one. The various types of paperwork help you keep track of what money you have. Try setting aside a set time each week to keep the financial house in order, or use the family desktop with an online or electronic record of your financial activity. There are many online tools available to help sort out your financial paperwork. Opt for electronic statements, which are more efficient for filing and environment friendly.

Consider these tips and you’ll be on the way to planting your financial icepick on the summit of your financial dreams.

How am I tracking to live the life I want in retirement?

There is no magic figure that shows how much all of us need in retirement. The important thing is to understand the sort of retirement lifestyle you hope to enjoy and determine how much annual income you might need to fund this goal.

One strategy that can give you a good idea of your desired retirement income is to write up a retirement budget. It can show how much income you will need but also let you fine-tune your ideal lifestyle if it looks like you may need to scale back your plans.

Strategies that may help you save for retirement

It’s often only when we are approaching retirement that the reality of the financial side of things becomes completely clear. Unless you plan to rely solely on the age pension (which only provides for a very basic lifestyle), it may be worth looking at ways to boost your retirement savings in your final working years.

There are a number of ways to do this.

1. Explore your super contributions

For starters, you may be able to increase your pre-tax super contributions. You may like to talk to your employer about making contributions via salary sacrifice. This is where part of your pre-tax wage or salary is directed to super instead of being paid directly to you.

Or you may be able to make a contribution out of your own pocket. Super savings are only taxed at 15%, but be aware of the contribution caps.¹

2. Consider your spouse’s super

If you have a spouse or partner, it may be worth making a contribution to his or her fund.
Be aware, annual limits on super contributions do apply. Contact us to further discuss these limits.

3. Explore your super investment strategy

Now is also the time to review your super fund to check that your nominated investment strategy is in line with your tolerance for risk.

Many pre-retirees are tempted to shift their super into low risk, conservative options, but bear in mind you could have 20 or even 30 years of living ahead. It could pay to have at least part of your retirement savings, including super, invested in growth assets that could generate long term capital gains.

4. Explore a transition to retirement pension

Another option to consider is using part of your super to purchase a transition to retirement pension. When combined with salary sacrifice super contributions, these pensions may help you increase your super while making up the balance of your take home pay with an income stream from your fund.

Pay off the mortgage or grow super?

If you still have money owing on your home loan, you may be wondering whether it is better to use any spare cash to pay down this debt or add the money to your super. Everyone’s situation is different and we would need to look at your personal circumstances to provide advice.

Lending a hand to the kids

You may have plans to give your adult children or grandchildren a financial helping hand when you are retired. Just be sure you have sufficient funds in place to secure your own lifestyle first before offering financial assistance.

What about a self-managed super fund?

A self-managed super fund (SMSF) can have real pluses, allowing you to have complete control over how your super is invested (within Tax Office guidelines).

We’ll be happy to explain if a SMSF is right for your circumstances. Managing your own retirement savings is a significant responsibility – and one that comes with costs of its own.

In addition to determining if you have sufficient capital for a SMSF to be worthwhile, consider whether you really want the added responsibility.

Investments outside of super

Along with your superannuation, it is a good idea to grow your investments outside of super. This may give you a diversified pool of funds to draw on as well as providing some protection against any unexpected legislative changes to super.

Downsizing the family home

Downsizing to a smaller property could offer the benefit of a lower maintenance home, an opportunity to be closer to family and a way to access any potential home equity.

It is worth crunching the numbers to be sure downsizing puts you in front financially. The upfront purchase costs, notably stamp duty, on your new home can take a bite out of your available cash.

There may be other options worth looking at, such as a reverse mortgage, which allows you to harness any home equity you may have without the need to sell a much loved family home.

Disclaimer

Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.

In the Summer edition of Insights magazine, we feature the new super changes which have been implemented by the government and how these changes may affect you. BT Financial Group Investment Specialist, Riccardo Briganti, provides us with an update on the world economy. We also look at how the Trump presidency may impact Australian markets. Finally, we provide 5 reasons why you should be taking your protection cover more seriously. Until next time – happy reading.