HOW TO MARRY FOR MONEY

The word ‘fiancé’ and the word ‘finance’ are very similar. Apart from an additional letter, they’re basically identical words, and rightly so, because before you walk down the aisle with someone it’s a very good idea that you are on the same page financially.

Richer and poorer 

Why? Well arguing about money is the top predictor of divorce according to a study by Sonya Britt, a US state university researcher. Interestingly this is regardless of a couple’s financial situation. So the insight seems to be, if your money saving and spending styles are radically different, or you can’t agree about them, your relationship might be on rocky ground.

What’s yours is mine

Plus, marriage is actually one of the biggest financial decisions you will make, because your joint earning capacity, what you each bring financially to the relationship and your joint financial goals are going to determine a great deal of your financial future. So before you commit, here are four important money issues to deal with.

1. Relationship debt

These days, most people carry some form of debt around with them and before you enter into a marriage or long-term commitment, it’s important to have an open and frank discussion about your situation. Will you share the burden of paying off the debt? Does one of you have a debt that will adversely affect the chances of securing a home loan? What measures do you have in place to ensure the debts are paid off?

While questions about debt might not seem very romantic, they’re an important tool in understanding your future spouse’s spending habits and attitude to money. Vanessa Tripodi from CreditCards.com recommends asking about a person’s total debt, as well as what the debt is from.

“This will tell you why your partner is in debt and whether they have bad financial habits, or their debt is due to a one-off emergency charge they haven’t been able to shift yet,” she writes.

2. Your financial roles 

Financial planner Gerry Linehan, also supports finding out what each other’s money habits are like.

“Who is the best money manager out of the two of you? Generally one is better than the other,” he says. “Consider the better half managing the money, especially if you plan to get a mortgage anytime soon.”

Belinda, 30, recently became engaged when her partner of 5 years, Matt, popped the question in Paris. She agrees wholeheartedly that each person should focus on their financial strengths.

“I am really good at preparing a budget and keeping track of our finances” she explains, “however I’m also quite good at spending too much as well, while Matt is better at saving but never knows exactly where we’re up to in our financial plans.”

3. To merge or not to merge?

Another important discussion to have before getting married concerns what will happen to your individual finances once you’ve said ‘I do’.

“We have kept our finances separate for the last five years of the relationship and will continue to do so going forward into marriage” says Belinda. “We both agree that keeping our financial independence is vital in keeping the dynamic of the relationship fair and strong. However once we start a family, we’ll have to restructure everything quite dramatically and join all our income and debts.”

4. Get clear on your joint financial goals

If you are both saving and working towards the same goals then you are more likely to be successful. But if one of you wants to travel for a couple of years and the other wants to save for a house deposit, you might become unstuck. Really get clear what both of your hopes and dreams are and how you plan to get there before you tie the knot.

Finally if you are planning to get married, consider going to talk with a Financial Adviser. It could be the wisest start to your financial future happiness.

If you would like to find out more about how this might relate to your personal circumstances, please do not hesitate to contact us via email at info@ofm.com.au or by calling us on 1300 761 669.

 

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.

INSURANCE: INSIDE OR OUTSIDE SUPER

Do you and your family have adequate insurance cover?
Did you know there is a more tax-effective way to fund your insurance premiums?

HOW DOES IT WORK?
Personal insurance is a smart way to protect your quality of life and provide support for your loved ones if you get sick or injured.

While you often hear how important it is to have sufficient cover, it’s just as important to be smart about the structure of your insurance.

Most types of life insurance can be held inside of super.

  • Income Protection (IP). Pays a regular monthly benefit if you become severely disabled by sickness or injuries and you are unable to work – potentially helping your partner take time off work to care for you and/or cover mortgage repayments.
  • Term Life. Pays a benefit if you die or become terminally ill – helping your family take care of debts and ongoing household expenses.
  • Total & Permanent Disablement (TPD) Insurance. Pays a benefit if you are permanently disabled – helping cover the long-term costs of care for you and your family.

At Odyssey, we want to make sure that the dollars you pay for your premium work harder for you. Our expert advisers can help you discover a smart super strategy, as illustrated below.

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WHAT DOES IT MEAN FOR ME?
Whether you have insurance cover inside or outside of super depends on your personal circumstances and needs. By choosing the right combination, not only can you have the appropriate insurance cover to give peace of mind, but you can do it in a cost and tax-effective manner.

 

 

Small Business Insurance Essentials

Are you starting a small business? Having your own business can be a flexible and rewarding way to make a living, but there are certain risks involved. According to a 2011 Australian Government report on small business, the average survival rate for small businesses in 2007-2008 was around 10% lower than their medium and larger sized counterparts. Although not every difficulty can be planned for, having the right business insurance may give your business a much better chance of surviving in the face of a disaster.

The array of different business insurance options available can be overwhelming, so how do you know what you really need? Your exact insurance requirements will depend on the nature of your business, but there are a few types of cover that are essential – no matter the size and scope of your enterprise.

  • Building and contents insurance. Insuring your business premises and any equipment you have means you should be able to claim financial recompense in the event of a fire, theft or certain types of weather damage.
  • Liability insurance. Depending on what type of business you have, there will be certain liability risks. Protecting yourself financially against the cost of being on the receiving end of a lawsuit could not only keep your business safe, it could also prevent you potentially losing your home and any other assets you own.
  • Key person insurance. Up until recently, Australian businesses have been able to insure against the negative financial impact which would arise if a key person dies, suffers from TPD or a trauma event. However, the unexpected temporary absence of an owner of income-generating employee due to sickness or injury can also have a sever financial impact, especially for small businesses where the revenue may be generated by a few people. Key Person Income cover can be used to help against this risk.
  • Commercial auto insurance is essential for any vehicles which are used for business purposes.

There are plenty more options for business insurance cover, including tax audit insurance, marine insurance and even technology insurance to protect against some of the costs of cyber-attacks.

When you are considering your small business insurance requirements, it is always a good idea to get professional advice that is tailored to your enterprise. For an appointment with a qualified Insurance Adviser, contact us.

 

Sources: Innovation report on small business statistics 2011 – http://www.innovation.gov.au/SmallBusiness/KeyFacts/Documents/SmallBusinessPublication.pdf
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.

 

But how much does it cost?

You know whenever we are “purchasing” something we always want to feel assured that we are getting value for our hard earned money. No matter what it is, no one ever wants to feel like they have been “sold” instead they wish to feel that they have purchased or acquired something of value.

Well an insurance policy is no different, yet many companies “sell” policy features based on how low the cost is and worse still, on not having to “do any medicals”. We have all seen those TV commercials that emphasize these supposed advantages to purchasing a policy through them as opposed via an authorised and accredited expert such as a financial adviser. Even some poor quality advisers still operate the “TV” way too unfortunately.

In obtaining a “cheap” policy the “easy way”, that is to not be medically and financially assessed, one is guaranteed (almost) to go through incredible hurdles come claim time. Ultimately isn’t that where your interests lie in having a policy? I’d much rather pay more, knowing that all medical history has been disclosed so that come claim time, the acceptance of my claim is far higher. As one financial adviser once said to me, if the hurdle isn’t at the beginning of the process, it will certainly be at the end (i.e. the claim request). The last thing any person wishes to experience is to persistently prove that they are entitled to their claim benefit during assessment. The trauma that a client often experiences that gives rise to a claim (death of a loved one, severe personal injury or illness etc.) is more than enough to deal and cope with let alone going through the arduous process of a claim.

In addition, it also pays to have a more expensive policy analogous to the additional benefits you would be entitled to. An additional cost to waive a premium, or obtain a nursing benefit whilst being hospitalised is a nice bonus to have when required. Ultimately you do get what you pay for…Now don’t get me wrong, I am not advising you to take these options, they are purely quoted for example purposes.

So in summary, don’t be motivated by cost alone when selecting or weighing your policy options. Seek advice from the experts (not an actor on TV) when you compare and research what is available to your circumstances, that is what your financial adviser is there for!

For an appointment with a qualified Wealth adviser, contact us.

Written by Maria YankosPractice Manager, Odyssey Financial Management

Odyssey-Staff_Maria_LRM

Whose advice are you listening to?

The other day, I contacted one of our clients to let her know her insurance policy premium was overdue and that the policy would lapse if it remained unpaid.

For privacy reasons I will name her Sandra. Sandra said that upon the advice of her “trusted” accountant, she will allow this policy to lapse as her circumstances have now changed.

What were her new circumstances? Very sadly, her husband had been diagnosed with a terminal brain illness. What was the accountant’s advice? To allow her Income Protection policy to lapse and redirect the “saved premiums” to mortgage repayments.

On several levels, the accountant has not acted in the best interests of his own client Sandra.

  1. What happens to Sandra should she find herself in a position to be unable to work and earn an income to pay for her living expenses?
  2. Has Sandra’s overall position (financial and her own health)  been taken into account when advised to cancel her insurance policy, which Sandra has had for 7 years (health can often change in that period of time…)
  3. Just as importantly, the accountant has advised in an area in which he is not qualified to advise in.

The above scenarios happen all too often and the following needs to be kept at the forefront when acting on such advice:

  1. Is the person providing me with advice, qualified to do so? We are often tempted to act quickly and irrationally on forecast information obtained over the fence or at the barbers when it comes to investments…
  2. What is the person providing me with advice’s underlying basis for such advice, it is you, the client’s, best interest?

So in summary, ensure when you share your financial circumstances when seeking advice, you speak to an expert in that area, ensure the expert knows the full picture and overall, you will not be worse off as a result.

For an appointment with a qualified Wealth Adviser, contact us

 

Written by Maria YankosPractice Manager, Odyssey Financial Management

Odyssey-Staff_Maria_LRM

 

LIFE INSURANCE – HAVE YOU GOT ENOUGH?

Do you have enough life insurance? Recent research by insurance advocacy organisation Lifewise and the National Centre for Social and Economic Modelling (NATSEM) has revealed that a significant number of Australians do not have enough life insurance to meet the needs of their dependents if they were no longer around. According to Lifewise, half of all Industry Super members are underinsured for life insurance by $100,000, with 37% considering life insurance a low priority.

Whether you are considering taking out life insurance for the first time, or reviewing an existing policy, there are a few things you should ask yourself to help you decide how much cover you need:

  • Will your family have enough to pay off any immediate expenses after your death? Burial costs and other lesser known factors such as the possibility of unpaid medical bills may need to be taken into consideration.
  • What future costs could your family have, such as educational expenses for children, which would need to be met?
  • What is your family’s level of debt? Consider mortgages, credit cards and any personal loans which could still need to be paid in the future.
  • How much will your family need to be able to maintain their lifestyle? As well as basic living expenses, don’t forget things like holidays, special occasions and gifts.

Deciding how much life insurance to take out can be a complicated process, but it is important that you take all the necessary factors into consideration to help avoid your family being left in financial hardship. Taking some time to sit down and really think about your family’s life insurance needs could save a lot of heartache in the future.

 

 

Sources: Lifewise – http://www.lifewise.org.au/see-more-statistics, The National Centre for Social and Economic Modelling (NATSEM)/Lifewise underinsurance report Feb 2011 – http://www.lifewise.org.au/downloads/file/aboutthelifewisecampaign/2010_0302_Lifewise-NATSEMReportFinal.pdf
 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.

Discover how the inner circle can help you. Contact us today for a financial consultation.

This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs.
Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.
Odyssey Financial Management is an authorised representative of Total Financial Solutions Australia Limited.