"I am a stay at home Mum with a Husband who works full time, We are great budgeters and both have a super fund, how will we benefit from seeing a financial adviser?"
-Sam from Tara in Queensland
Top answer provided by:
Hi Sam, great question and one I am often asked.
Often there is a perception that you have to be in a high-income, high-wealth position to seek financial advice, but this is far from reality for clients I see on a daily basis.
Working with a financial adviser can open your eyes to things you may never have considered relevant to you. Being good budgeters is a great start but there are many ways you can ensure you are making the most of those budgeted savings.
What are your options for savings?
Are you budgeting just to meet your everyday expenses or have you put aside savings for a rainy day and those longer-term needs? Or you may be saving and not sure what to do with it?
A financial adviser will help you to identify what savings means to you – what are your savings goals and the time frames for these events? You may have funds budgeted for everyday spending; short term goals such as holidays or car upgrades; medium to long term goals such as savings for your children’s education or wedding and your own goals of retiring or building wealth so you don’t have to work for your lifestyle income. How you invest your savings will have a great impact on whether you reach those goals in the time frames required. An adviser should be able to educate you about various asset classes and investment options such as cash (bank accounts, term deposits), fixed interest (bonds), shares (Australian, Overseas, small or large companies, value or growth) and property (listed or direct, commercial, industrial, infrastructure) and be able to guide you to make choices suitable for your personal needs.
Know your investment structure
Investing is more than knowing about shares and property and interest. An adviser will also be able to guide you as to the structure of your investments which will take into consideration your tax situation. Whose name should it be in? If you are not working you would be paying no tax or less than your husband for example so may benefit from having investments in your name. Understanding the benefits of structures such as superannuation (building wealth for retirement with tax benefits) and tax-paid bonds (ideal for savings for children, grandchildren and funerals as well as for higher-income earners savings) can be a specialist area that an adviser can provide. Future planning considerations such as what happens if you passed away would also be taken into account.
Understanding super options
You mention you both have a super fund – are you aware of how your super is invested (high risk? Low risk? Good performer?), what you are paying in fees? what options you have to change your investment strategy? What insurances are you paying for in your super fund? An adviser can help you to navigate and understand your super fund and make an informed decision as to whether it is suitable for you in your stage of life. There will also be considerations for ensuring you are also continuing to save for retirement even if you are not currently the primary earner. Your husband may be able to contribute part of his employer superannuation to your plan or make additional contributions to your fund and claim a tax deduction.
What happens if things don’t go to plan?
While all is well and your husband works with you at home and everyone is healthy, it’s easy to fall into the thinking that everything is under control. Being a great budgeter is one thing, but if the salary is not there to ‘budget’, what financial position are you left in? If your husband couldn’t work for a time due to illness or injury – do you have financial protection to cover that loss of income? How long would that last? What if you had a serious illness such as cancer and needed to have long term treatment meaning you would not be able to run the house and look after the kids? What if it was a permanent injury or worse still, one of you passed away? An adviser will be able to help you analyse any gaps in your risk management plan, help you to assess how much and the types of insurances you may need and how to structure these to best suit your budget. An adviser should also act as a sounding board to ensure you have also considered important estate planning aspects such as having Wills and Powers of Attorney.
It is well worth your time to visit an adviser and go over your own personal situation to give yourself peace of mind that you are on the right track, or to discover there are some things you had not thought about that could really impact your overall financial wellbeing.
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