My three-year old granddaughter has just started receiving pocket money. It may sound young, but she’s already interested in how money works and keen to spend it… whether it’s a sign of a financial genius or a shopaholic I’m not sure. Either way I reckon the earlier you begin teaching children about money the better chance you have of raising money-smart kids.

1. Start young

One of the greatest lessons you can pass on to your children is how to handle money. When your kids are pre-school age begin explaining what money is and show them the various shapes and sizes of coins. Tell them how you get money and what it’s used for.

2. Pay pocket money

The best way for kids to learn to manage money is to receive their own regular income from an early age. It will help them understand how much things cost and make choices between things they want.

When a child starts to understand the concept of earning money and then exchanging it for goods and services they are ready for weekly pocket money. For some kids this will happen as young as three or four, others might not be ready until they start school.

The amount you pay should be based on their age and what they do to earn the money. When my kids were growing up they had unpaid family chores like clearing the table and doing dishes. They then had specific pocket money jobs ranging from matching the family’s clean socks to washing the car. As your children get older what you pay also depends on what expenses it’s meant to cover.

3. Encourage saving

Children can begin saving as soon as they start getting pocket money. Ask your kids what they would like to buy with their pocket money. I’m guessing you’ll get told everything from a Barbie dollar to a first car. Explain if they put money away each week they will eventually have enough money to go out and buy it.

Get younger kids a fun piggy bank and put a picture of their savings goal on the moneybox as an incentive. You want it to be something achievable in the near term to keep their interest. My granddaughter is a Toy Story fanatic and has her own Ham piggybank she loves adding too.

Help older children do a simple budget on how their pocket money is being spent. That will show them, just like adults, where their money is going and how much they can afford to save.

4. Open a bank account

After your child gets the hang of saving for a year or two it’s time to open a savings account. The Commonwealth Bank’s Dollarmites Club for kids under 10 has been around since my kids were little and makes banking fun. St George Bank has a similar program, the Happy Dragon Club, for kids under 13.

5. Inspire teenagers to invest

There’s no subject at school teaching kids how to manage their own money and get out of consumer debt, they need life experience and your guidance. When your kids get to high school give them more freedom to manage their own money, particularly when they get a part-time job.

Start explaining the basics of investing and how they can grow their money by earning returns on their returns. A great way to inspire teenagers and get them interested in investing is to open a managed fund and commit to a savings plan together.

Having a definite plan for your life greatly simplifies the process of making hundreds of daily decisions that affect your ultimate success.

When you know where you want to go, you can quickly decide if your actions are moving you toward your goal or away from it.

Without definite, precise goals and a plan for their achievement, each decision must be considered in a vacuum.

Definiteness of purpose provides context and allows you to relate specific actions to your overall plan.

In the lead up to Christmas, many peoples’ budgets and savings can be ruined by spending sprees of yuletide proportions. However, with a little bit of thought and planning, it is possible have a jolly Christmas without putting a strain on your budget.

Twelve budget tips for the twelve days of Christmas:      

1.  Do a budget – write out a list of the people you’d like to buy for and put a price limit next to each name. If it adds up to too much, review the limits you’ve set.  

2.  Organise a ‘Secret Santa’ – instead of buying a gift for everyone, consider a ‘Kris Kringle’ arrangement where each member in your family draws a name out of a hat and only buys a present for that person. Don’t forget to set a price limit so that no one goes overboard.

3.  Shop in mid season sales and use catalogues – get organised and start your shopping early at the mid-season sales. Most of the big department stores are still in sales mode, offering discounts of up to 40 per cent.

4.  Don’t forget layby – it may be a bit old fashioned, but many shops offer no deposit laybys right up until Christmas.

5.  Shop online – more often than not you can find the item you want for a lot less online. Books make a great Christmas gift and can often be ordered on the internet at heavily discounted prices.

6.  Get baking – the most appreciated gifts are often the ones that are made with love. Home-made fruit cakes, rocky road, shortbread, jam and relishes are festive favourites which never fail to impress.

7.  Stockpile Christmas groceries – pop a few extra items in your shopping trolley each week and store them away in the pantry, so your Christmas grocery shopping bill won’t be so scary. Stock up on items when they’re on sale or look out for ‘two for one’ deals which make for really economical Christmas shopping.

8.  Buy clean skin wine – most bottle shops offer a wide range of clean skin wines which are fantastic quality. You can bring the price down even more if you buy by the half dozen.

9.  Be credit card wise – while credit cards are convenient, they are also addictive over the Christmas period and can quickly undo a well-planned budget. Avoid buying gifts with credit, unless you are going to be able to pay off your card before interest is charged. You don’t want to be still paying off Christmas well into the New Year.

10.  Ask family for vouchers this Christmas – then take them to the after Christmas clearance sales. You’ll get more bang for your buck and you can choose what you want. Post Christmas sales are a chance to pick up some real bargains, especially on big ticket items. But go prepared and be armed with a list of the items you actually need to avoid unnecessary purchases.

 11.  Start paying off your holiday now – if you’re going away over the Christmas break, try to pay off your accommodation costs in instalments before you leave. Make sure you holiday within your budget and avoid paying for expensive overseas travel on your credit card if you won’t be able to pay it off quickly. To cover extra holiday expenses, such as ice-creams and movie outings, why not start saving your loose change in a jar. It’s surprising how quickly the money can add up.

12.  Budget for New Year expenses – when doing your Christmas budget, don’t forget to factor in for some of the big expenses you’ll be facing in the New Year. If you’ve got children, be mindful that all those back to school costs are just around the corner. You’ll also have a new round of bills starting to roll in, such as rates, electricity and phone bills.

Like most things, if people don’t carefully plan their festive season expenses, they will end up with a major headache when the fun of Christmas is over and the summer holiday is a distant memory.

The sad truth is that there are only 2 tribes of people in this world.

They are the “gunnas” and the “dunnas”.

The gunnas are the people who are always ‘gunna’ to do something’.  The dunnas are the people who have already done it.

You see all the successful people I know, rarely tell you what they are going to do. 

They just go and do it – then they tell you.

Jim Rohn used to say that if you followed around a successful person for a day, at the end of the day you would say, “well no wonder they are successful, look at everything they DO”.

They key of course is that word ‘do’. 

It’s the doing that creates the results. 

However there is one small problem.  There is one thing that will sabotage everything you do.  It’s the primary reason why people remain gunnas and never really follow through on their dreams.

If you want to move into that elite tribe of those that get it done, then the biggest thing you need to do is to assign a “why” to every dream and goal. 

You see the reason you had breakfast this morning was that you simply had a “why” – a solid reason of why you had to do it.  Maybe it was hunger or satisfying your taste buds.

Remove the why and there is no breakfast. 

It’s the same with every dream.  Without a ‘why” a dream remains a dream. 

So to move into the ‘doers’ circle, come up with a really strong why that is loaded with lots of emotion and passion and a compelling reason of why you must achieve it.

This the is the reason why so many of the rich came from a background of being poor.  It ground into them a compelling why.

There is one more key to this. 

This next part is super important – because I see this trap so many times.  The actions that you take, must be in line with what you want. 

I see a lot of people who say, “I would like to increase my business income” and yet the actions that they do are not in line with their end goal.  In fact their actions often take them away from their goal. 

For example if all you do is become a lot busier but that busyness is not focused on specific strategies that create income generation, then how can you achieve your goal? 

Figure out exactly what you REALLY want and then look at the actions you are taking

- is it in line with what you want?

1.  Do a will

“No will” equals “no choice”. If you die without a will then the government decides who gets what using their own formula and it will take longer for beneficiaries to receive their share. Your estate also runs the risk of being hit with a bigger tax bill than a properly planned estate.

A will sets out exactly what will be done with your assets when you die. It must be detailed, specific and address every eventuality.

There is no excuse for not having an up-to-date will. If your will is very simple then write one yourself with the help of a Will Kit. These can be bought from the Post Office and newsagencies.

2.  Get advice

If your affairs are a bit more complex get advice from an accountant or financial planner and use a lawyer. Discuss your options and the tax implications of each alternative for the beneficiaries.

One way to make sure loved ones get their fair share may be to provide for them outside of the will. Investment vehicles such as DIY superannuation funds and family trusts allow assets to be specifically handed on in accordance with your wishes. These alternatives are costly to set up, but worth considering if you have substantial assets.

3.  Update it regularly

Update your will after any major changes in your personal life. That includes births, marriage, divorce, or entering a de facto relationship. Also remember to make changes after any financial windfalls or losses.

If your life is going well and there are no changes it’s still a good idea to review your will at least every 5 years.

Sit down with your partner and go through the finances. Look at how much you’re spending, the size of your credit card bill and what you’re doing to set yourselves up for the future.

Get on top of your money, make changes and develop a plan.

1.  Update your family budget

Start with your family budget. It needs to be updated on a regular basis to stay relevant. If your figures are out of date there’s no way you’ll stick to it.
Update any expenses or sources of income that have changed, like higher mortgage repayments or recent pay rises. If you have excess cash work out the best way to use it. If your budget is in the red there are 2 possible solutions – down or up – you need to trim your expenses or work more hours to boost your income.

2.  Check your bills – and check them again

It’s all too easy to swipe a card at the supermarket checkout or pay bills by direct debit and loose track of how much you’re actually spending. Dig out receipts or bank statements and get exact figures for your utility bills, mobile phone calls, and groceries. You need to do two things. First, check whether you’re sticking to your budget estimates. Second, compare your bills to the previous quarter or the same time last year and if there’s a big difference work out why.

3.  Read your bank statements

Take the time to go through your bank statements. Have a look at where your money is coming from and where it is going. If you notice any unusual transactions investigate further.

Add up the fees you’re being charged on your transaction account, savings account and especially your credit card. You may be able to reduce the amount you pay by changing your banking habits. For example, always paying the minimum amount on your credit card on time or avoiding cash advances. Compare other lenders or credit card providers if you’re not happy with your current deal.

4.  Keep track of debt

Don’t let spending get out of control and credit card debt mount up. Keep track of what you owe and start paying it off. If you ignore your financial problems they will not go away, just get worse.

If you have any sort of consumer debt you need to put a lid on spending. You should also forget about growing savings or making new investments. Any spare cash should go towards getting rid of debt, not earning interest.

Your first priority should be paying off any credit card debt, you may be spending up to 20 per cent in interest. Then look at any personal loans, like your car loan, and lastly your mortgage (generally your cheapest debt).

5.  Set a SURPLUS goal

Now that you’ve got a handle on your day-to-day finances it’s time for big picture stuff. While you and your partner are still sitting down talk about where you want to be financially in the medium and long term.

Set surplus and savings goals and work out how you’re going to reach them. Paying off the mortgage as soon as possible or making contributions to superannuation are two of the best goals you can set.

Here is a free gift to you !!! 

Financial freedom can give the ability to go wherever you want, any time you want.

Money may not solve all your problems but lack of it can create tension in the home and countless relationships break up over its effects.

When you ask people the question, “Would you like more money?” nearly everyone will say “yes.”

So how can you get more money & move to true financial freedom?

This powerful e-resource will show you “how”!

Click this link here to sign up and receive your free e-gift.

you need to make sure you have the habits & mindset to get you there.

 Answer the following with “yes” or “no”:

___ YES   ____ NO   I am a good manager of my finances

___ YES   ____ NO   I have a $urplus every month

___ YES   ____ NO   I pay myself 10% for savings

___ YES   ____ NO   I can survive financially for more that 3 months if I had no regular income

___ YES   ____ NO   I have protected one of my most valuable assets—my income

___ YES   ____ NO   I live debt-free (from unsecured consumer debt)

___ YES   ____ NO   I am financially literate

___ YES   ____ NO   I have ways to make sure I learn about what I don’t know about finance$

___ YES   ____ NO   I can withstand the pressure of get-rich-quick schemes

___ YES   ____ NO   I am learning about the 10 ways I can build wealth through property

To check out your responses – and how to get stronger – book in NOW to our Wealth Accelerator Event this Saturday 9am

- FREE tickets valued at $397 are here.

It is a formula they have devised based on experience of loan defaults that attempts to minimise risk from borrowers defaulting.

The LVR is expressed as a percentage and calculated by taking the amount of the loan, dividing it by the value of the property (see warning below), and then multiplying it by 100.

In this example of a $225,000 loan on a $283,000 property the LVR is 79.5% meaning that no mortgage insurance is required. 225/283=.795×100=79.5%LVR

Lets look at another example of a $225,000 loan, but this time on a $250,000 property where the 80% cutoff is exceeded by 10% requiring insurance. 225/250=.9×100=90%LVR

Be aware that the value of the property is determined by the lenders valuer and is NOT the purchase price. You could be in for a nasty surprise at settlement if you haven’t taken this into account. There may be the difference between the valuer’s price and the purchase price that you have to cover yourself.

We suggest you contact one of our mortgage partners for advice on finance and mortgage insurance. They have access to a much greater range of products and lenders than banks so you should be able to get something to suit your situation.

“Money is often a source of conflict in marriage” 

Does this sound familiar?

“He could get a better job if he would try.”

“All I ask is that she record the money she spends.”

“Why can’t we save something?” 

Is the problem really money? We don’t think so. We think it is a relationship problem.

The first step is to write down the “money issues” on which the two of you disagree. Then one by one, look for a game plan that will make both of you winners.

If you can’t agree on such a plan, then get a money educator or trusted friend to help you. You don’t have to spend a lifetime arguing about money.

Is money an asset, or a liability to your marriage?

Much of the answer lies in your attitude toward money. If you are looking to money or the things that money can buy, to make you happy, then money will be a source of conflict in your marriage. But if you take advice and apply wisdom in how to handle money, then money will become an asset.

One of our wealth coaches, Greg Anderson, said at our last Wealth Accelerator Event:

“Money is a great servant, but a poor master.”

 Don’t let money overly influence the decisions you make. The bigger question is “How will this influence our marriage and family?” A move across the state or country may bring more money, but be detrimental to your family. In which case, less money is an asset. 

When is the last time you and your spouse had an argument about money?

Was it the “same old issue”? My contention is that couples who continue to argue about the same thing over and over again need help. You are wasting your energy.  You don’t have a problem that other couples have not had. Why not reach out and get the wisdom of a trusted finance person or an older couple? 

Most older couples would be thrilled to help you find answers to your money problems. Pick a couple you respect and ask if they would be willing to help. If they don’t have the answer, they can likely point you to someone who does. Constant arguing destroys your relationship. Call a truce and look for help. Make money an asset to your marriage, not a battleground. 

Money doesn’t build or destroy marriages.  People do.

If you are arguing over money, we are suggesting that money is not the problem. The problem is that the two of you are blaming each other rather than joining forces to find a solution. For example, let’s say you are arguing about “not enough money.” He blames her for spending too much and she blames him for not looking for a better job. 

The solution? Stop blaming and arguing, and spend that same energy looking for creative ways to lower spending and increase income. These are the only two ways to have more money. If you work as a team and apply your best thinking, seeking advice from competent people, you will find a solution.  Our “Mr Surplus,” Michael Delport, is superb at coaching people in this vital area of money mangement. 

Making the Needed Changes to Make Marriage Work

A common problem is that couples do not feel like partners. Often, the husband so controls the money that the wife feels like a child on an allowance. Or, the wife will control the money and the husband feels “left out”. 

Obviously, someone must balance the bank account and cheque book, and keep the bills paid, but this does not mean that they control the money.

We are a team, and must work together. That is certainly true in money management. If you look after the money books, you might ask your spouse: “Do you feel like a partner, or a child?”

Take their answer seriously, and make adjustments as needed.

If you think or feel that you need some advice about a “game plan” or which direction to go, please make contact. 

We are well known for having good ideas, and solutions!