The challenge for Australia’s changing retirement landscape; it’s not just attitude, it’s action!

There is absolutely no doubt about it that we certainly live in a blessed country here in Australia. In more ways than just one!

MLC recently conducted an independent survey to explore the challenge of how to get more Australians to think about their retirement, with some very interesting results and statistics coming out.

The three-part independent Whitepaper not only looks at the cost of living and the impact it will have on future generations, but also our attitude towards retirement in general and our expectations that go with it.

Interestingly enough, it also found that people who use a financial planner are far more likely to be confident about their financial circumstances, including spending and financial security for their future.

Further the research found that generally, what used to be considered as luxuries such as having the latest technology, entertainment and eating out once a week are today, considered to be essentials among a widening social group which are now defined as the new average Australian.

So it appears that Australian’s are raising the bar so to speak when it comes to disposable income and what we actually dispose of this income on.

Some of the other key themes that were exposed from this research were:

– 66% (a large percentage) feel unprepared for retirement

– Only 15% believe they are well prepared for retirement

– 54% believe their superannuation will be enough to support them when they do actually retire.

However, a very large percentage (85%) of respondents to this research believe that today we live beyond our means as a whole.

So, here we are saying we have to have things (that were considered luxuries only a few years ago) as necessities now, and in the next breadth comment that we live beyond our means…it’s amazing sometimes how research brings out interesting statistics but most importantly, sheds light on people’s attitudes more than anything.

For as long as I can remember now, there has been this on going commentary about how we, as a nation, simply have to change our attitudes towards retirement and the reliance on Government funded pensions to survive.

We must, absolutely must, move away from believing we can fund an entire generation in retirement with Government funded pensions and move towards self-funded retirement via the likes of our own personal superannuation funds.

Yet here is an entire new generation coming through that has an attitude of self-indulgent spending and raising the living-standard-bar so high that they’ll never have any money left over to contribute to anything like a superannuation plan that will accumulate enough to sustain them in retirement.

I’ve said this before in other articles that I firmly believe the place to start to change attitudes on these financial issues is at school with our kids as they’re growing up.

They don’t have to be financial whiz-kids but they should be given the basics of financial health and responsibility at a young age, so that when they enter the work force they can at least have a grasp of what is needed to ensure they have some understanding of the need to save rather than spend, spend, spend!

The issue of retirement and living comfortably when you’re there always gets some press and will continue too. Look at what happened recently with Federal election and the subject of potential changes to superannuation, again.

It received enormous press and every so-called expert shoved his or her two cents worth in along the way.

The bottom line is this; we really are spoilt here in this country and sometimes we take it for granted. Our financial system is one of, if not the strongest financial systems in the world and in particular our superannuation system is certainly generous in comparison to many first world countries.

As a whole we need to educate our children (a whole generation) about the need for some general understanding of financial management and to save first rather than spend first and save some time later on down the track.

If we can do this successfully, our nation could completely reverse the dependence on government funded pensions for retirement and majority of our retirees could be self-funded rather than reliant on tax handouts. It sounds like a pipe dream doesn’t it, but it’s amazing what the right type of education can do for people!

* The author of this article, Gary Fabian, is the Principal of Precision Advisory; Licenced finance broker, risk insurance and superannuation adviser and he teaches his young son about financial management with his pocket money.

There is an old saying that goes something like this; “Don’t let a good story get in the way of the truth”

Nothing could be truer than a lot of the stuff we get subjected too these days in the mainstream media…and especially of late since the federal budget came out and now, the impending election.

Every where you turned recently there was some story about how bad superannuation was going to end up and then followed pretty closely behind that was all the talk about property investment and negative gearing etc.

So the general public is subjected to this complete barrage of negativity about how two of the most staple investment vehicles in this country are going to the pack and guess what, everybody gets spooked and freaks out about investing.

What tha!

What has been completely left out of the story about these two things, or superannuation at least, is that the proposed changes will affect a small percentage of people and at the end of the day, super is still a very tax effective method of putting money away for retirement.

And isn’t that what it’s all about when it comes to super? Putting money away in a secure, tax effective way for our retirement.

And, getting some growth on your money whilst it’s in the fund and in a tax effective manner…there’s that phrase again, tax effective!

Let me repeat that; tax effective!!

This is a very important point to make here about the tax treatment of our money going into the super fund, how it is treated when it’s in there and then when we get it back out later when we retire.

There has been much analysis done about this by many expert (and I would guess in some cases, not so expert) consultants who state that superannuation is still a terrific method of socking away money for our retirement, especially for the vast majority of the working population.

As opposed to the small percentage of the population who can be classed as, well, rich!…and this section of people probably don’t really need a super fund anyway!

As for negative gearing, and especially it’s use in the investment property industry as a method of convincing people to invest in property in the first place, again the focus is too much on the so called tax deductions you can get, as opposed to the investment benefits you’ll get in the longer term.

Yes I completely agree that a tax deduction of any kind is a good thing especially in this country of reasonably high personal tax rates.

I’m not for one minute saying that negative gearing and its associated tax deductions are not attractive, of course they are!

I for one would certainly suggest that getting as many tax breaks as possible should be everyone aim when it comes to their personal income, as it only assist us with our overall affordability to live.

But what I’m saying is that for far too long people have focused on the tax breaks first with certain investment classes such as property, and especially residential property, without looking at the medium to long term benefits of the investment itself.

These benefits I’m talking about are of course the capital gain and wealth creation result that come with owning a good investment.

Residential property in particular is an area of focus because it represents such as large portion of the investment property market as a whole, and this is due to the fact that it is the investment-of-choice for what could be best described as the mum-and-dad investment market.

Which is a big market!

80% of Gold Coast residential property investors are everyday working class people who interestingly enough earn less than a $100,000 per year. So, in general terms at least, this market is not multi-millionaire business people.

(Although I’m sure they invest in residential property as well)

It would be a fair guess also that most of these investors had a strong interest in the tax deductions they would receive from the negative gearing benefits associated with owning the investment property and didn’t really think too much about keeping it for the long term, being 10-15 years or more.

This time frame covers what is known as 2 economic cycles being the ups and the downs of our economy and when a residential investment property is kept for about this period, or more, it will in most cases appreciate substantially in value.

I actually have clients who purchased investment property at the absolute height of an economic cycle when the particular properties in question were considered highly priced however, they have kept them over the long term and now they have appreciated in value and represent a good investment.

So, what’s the moral to the story with this?

I think when it comes to any investment, and the associated tax deductions that come with owning it, it’s important to focus on the original purpose of the investment in the first place and that is for it to appreciate in value (with time) and to provide some income along the way (presuming it’s income producing) and then look at the tax benefits last, not first.

Otherwise, there are plenty of very poor performing investments out there that will give you a tax deduction just for owning it but never perform adequately (or in some case, go backwards)

In this case, if the focus was just to be tax relief, then why not donate to a worthwhile charity and help out where it is needed rather than on the pretence of a so-called investment.

* The author of this article, Gary Fabian, is the Principal of Precision Advisory; Licenced finance broker, risk insurance, superannuation and Gold Coast financial adviser.

I watched a YouTube video recently with this very title. It told the story of a blackboard which was erected in the middle of New York City asking this simple, yet profound question and inviting people to share their biggest regrets.

As people from various walks of life came past the blackboard, some stopped and decided to share their own regrets of things they wished they had done or pursued in their life-gone-by.

It was as if this blackboard soon became a way for lots of people to publicly expose their regrets in a way that might help each one of them to move past whatever it was that was holding them back, and to rid themselves of these emotional ghosts.

I guess we all have them to a certain extent but it really depends on what we do with them and how we manage them from affecting our future-selves?

This was a very interesting social experiment and before too long a very big list of regrets had been written in chalk on this board and it became apparent that just about every one, from all different backgrounds, religions, race, colour and gender have regrets they harbour that have gotten in the way of them living their lives with fulfilment…or in some cases, with the one they truly loved.

It’s a cliché that fear can, and does hold people back from achieving their dreams. We hear it time and time again and most of us just put it to the back of our minds as if it doesn’t apply to us…”oh no, that’s not me” or “oh no, I’m not one of those people who lets regret in get my way”

Ask yourself this question; what’s stopping me from achieving my goals in life? What stands in my way from being who I really want to be? Is it having enough time or money?

Is it your health or available resources? Or, is it fear of failure????

What would you do if you knew you wouldn’t fail? Imagine that, what would you go and do if you really knew you weren’t going to fail at it?…the mind boggles!

This blackboard video goes on to ask people what happens when their regrets are simply wiped clean, gone, so they can all start fresh again. People come away from the blackboard feeling enthused and encouraged about their future.

More often than not, having a realistic plan in place about what it is you want to do and achieve in your life can, and usually does, give you great clarity and along with clarity comes some motivation.

But not only does your plan need to include what it is you want to achieve, it also needs to include the steps you’re going to take to get there i.e. “What do I want and how am I going to get it?”

More times than not, finances form a large part of people’s life plans.

As it is often said, money doesn’t necessarily buy you happiness and I completely agree with this statement however, whether we like it or not, money also plays a very large role in our lives today in being able to live in modern society with a reasonable level of comfort (and dignity) and to be able to support and provide for our families.

Where am I going with this?…simple, if you haven’t got some type of plan for your future, then get one (to get some clarity)

It doesn’t have to be fancy or complicated; in fact, it’s best if it’s simple and to-the-point.

And, get to your plan NOW rather than saying you’ll get to it tomorrow, or the day after that

Remember, life moves fast and before you know it you’ll wake up one day and 20 years would have passed you by.

Get a financial plan and put it into action, because action is the start of every thing.

* The author of this article, Gary Fabian, is the Principal of Precision Advisory; We develop plans for people’s financial future including, finance, insurance and superannuation retirement funding.

A recent survey conducted by MLC has unearthed some interesting perceptions of how Australians think about money and especially wealth, class and retirement, compared to 20 or 30 years ago.

Some striking revelations from this survey such as; Twenty per cent of those with a household income of $200,000 are living pay-to-pay and having $1 million does not make you rich.

46% of survey respondents said they were living from pay-to-pay, which on it’s own is very alarming.

Also, about the same proportion (48%) said living comfortably requires at least $150,000 per annum income.

This survey was conducted by MLC for the purpose of providing advisers and wealth managers with a better understanding of how Australians identify themselves and discover their financial aspirations.

It seems the results are confusing and alarming to say the least, I would say anyway!

There were other misconceptions revealed from this survey about how Australians view their own, and other people’s wealth. Two thirds (66%) labelled themselves as middle class or lower middle class whilst in reality only 20% actually fit this category.

The research suggest there is a clear disconnect between the definition of “lifestyle” and “standard of living” with many of the respondents saying the pre-requisites for a typical middle class Australian were; having a professional job, the ability to send their children to private school and owning a house and a car. With the average household income of the middle class now sitting at $77,676 per annum it seems most Australians attitudes are a mismatch with financial reality.

It seems that managing people’s expectations as we move forward is going to be harder and harder when it comes to money and especially retirement.

One thing is for sure; our spending patterns have changed dramatically and are most certainly not in line with our savings patterns.

It also seems that financial apathy is becoming more of the norm as this research tells us that Australians are looking to the government for answers with almost half of the survey respondents believing the government should do more to help middle class families.

Personally, I thought government was there to govern and lead the country as a whole and provide the resources for its citizens to take advantage off. Since when is the government there to provide us all with wealth in retirement…wait, didn’t communism promote that and fail miserably, time and time again.

Yes I totally agree that whatever government has power they should put in place the systems for people to prosper, but it’s up to us to get off our collective butts and actually do something with it, not sit back and wait to retire on a government (less than subsistence) pension.

And without doubt our superannuation system should have long-term certainty to match its long term proposed outcome of self-funded retirement. Rather than being tinkered with by successive governments who look to superannuation as a means to recoup the massive multi-billion dollar losses from whichever government has stuffed up previously.

All this being said, and regardless of extensive surveys that reveal that Australians have unrealistic financial expectations, we do still have a fairly robust and workable superannuation system that caters for the vast majority of us working Australians so, why the hell not take advantage of it??

Come on people, get real about your financial future!

I’ve said it before and I’ll say it again, we need financial literacy to be taught at schools to educate our young generations about the need to plan, to budget and to be mindful of money so they do something positive about their financial futures.

And I don’t just mean at high school. This is an important issue and it needs to be taught to our kids at a young age across the board so future generations will be savers, not just spenders and end up with nothing.

I’m a father and I try to teach my son to be financially responsible and it seems to be working as he has a healthy attitude towards working for his pocket money and saving it rather than blowing it on worthless, meaningless stuff….and he seems to understand the meaning of what’s good value and what’s not.

At 11 years old he’s even asked me what superannuation is and when I told him he asked me if he could have a super plan, wow! I really wish he could have one at 11 years old.

Imagine what the future finances of this country would look like if every 11-year-old child wanted to have a super plan to save for their retirement?

That’s a debate worth having, don’t you think?

* The author of this article, Gary Fabian, is the Principal of Precision Advisory; finance, insurance and superannuation advice and consultancy.

The simple way to answer this question is to look at your credit card, or credit cards if you have more than one. Simply speaking, if you’re not paying off your credit card and clearing the debt back to zero each and every month then sorry, but you have too much debt.

Credit cards should only be used very sparingly and as a means of financial convenience, NOT a means of getting an easy loan from the bank or other financial institution. They are just way toooo expensive when it comes to interest rates and can be the absolute worse financial mistake you can make if you’re not careful.

Banks throw credit cards at people like frizz-bees and it’s very easy to use the credit that’s given to you but stop and take a good hard look and so no more.

Before you do anything else, you may want to pay off the existing balance on your card (or cards) and get back to using them for your benefit, not the banks benefit.

A good benchmark for the minimum amount of money to set aside in liquid reserves is about 6 months of living expenses. This way if anything does happen such as a disability or extended illness etc. then this will cover your expenses until disability insurance kicks in (assuming you have some that is?)

Now, if you’re self-employed, the benchmark here is about 12 months of living expenses due to the higher risk of an economic disaster happening.

Leading on from the previous question about emergency funds, it’s paramount for almost everyone these days to have in place risk insurance cover to protect against loss of income, disability, trauma events and of course, death. As I’m always saying in my job as a financial planner/risk consultant, absolutely no one is bulletproof and if you’ve been one of those very fortunate few who have (so far) escaped some type of injury or illness then don’t get cocky and think it can’t or won’t happen to you.

The cold hard facts are that we all end up facing some type of health challenge at some time and it always will result in being an expensive exercise that will place an enormous financial burden on you and your family.

So, don’t just insure the house and the car, insure you most valuable asset which is yourself. Don’t be cheap about it though, get proper advice from someone who actually knows what they’re talking about and can get in place quality risk insurance to give you and your family complete financial protection.

After all, what’s more important to you, you car and your house OR you’re family and their well-being?

Easy question to answer I suspect!

Have a look at all the services we use in our day-to-day lives and especially all the electronic/computer/communication related services the world has gone mad with.

Sit down with a pen and paper and get out all of these things that you pay on a regular basis and go through them in detail; you’ll be surprised I’m sure!

Somewhere in there will be some cost savings and maybe you might even find there are things you don’t need at all, so you can cancel them outright.

These services can also include such things as extra bank accounts you don’t use much or even need and these attract fees to keep them in place.

Then of course there’s the typical cable TV subscription and magazine subscriptions as well. Check them out and make sure you’re getting real value for your money.

I’ve seen clients do this exercise and save a tremendous amount of money each and every month and this adds up to lots of money over the course of the year, which could go towards that family holiday you’ve always wanted, or the kids school fees, or even towards the home mortgage repayments and/or extra superannuation contributions to boost your retirement savings.

You’ll be much better off with this money in your pocket rather than going out the door each month to various service providers, some of which you probably don’t need.

Now, speaking of superannuation and point 4 above about overpaying for other services. It never ceases to amaze me in my job as a financial planner when I come across people who happen to have a few old super funds just “laying around” (like they’re old socks or something) and they just don’t seem to place any importance at all in the money that sits in these old funds.

After all, it is your money and if left in an old super fund (probably due to previous jobs) and with no contributions going into them, the old super funds will surely go backwards because of management fees and the effects of inflation.

I’ve seen incidents with clients who have 2, 3 or even 4 or more older super funds that have amounted to many tens of thousands of dollars sitting in these funds that we’ve been able to consolidate into one super fund with superior investment performance and more cost effective management fees.

The end result of this will most certainly be a better retirement outcome, no doubt.

Whether you have older super funds to be consolidated or not, it’s still important not to take your current contributory superannuation fund for granted because a little bit of tweaking here and there could mean much better outcome for you when it really matters, which is when you come to your retirement age.

That being said, I’m suggesting you have to become a superannuation expert because this is a very complicated subject matter. All I’m saying is to take more than a passing interest in your super fund and get some advice from an experienced financial planner who can provide some objective advice.

It’s important to remember that not all superannuation funds are the same and there are many available to choose from, primarily industry funds, retail funds and then there is Self Managed Superannuation Funds (SMSF’s)

A good, objective financial planner should be able to guide you through the maze of superannuation and give you some clarity and direction on what is right for you and maximising your retirement outcome.

So, all in all sit down with a pen and paper and get out all those files containing various bits and pieces of your financial life and start to get a clear picture of exactly where you are right now. Then get in touch with a financial planner to get some professional advice and direction on where it is you want to go.

You’ll be so much better off financially if you do!

* The author of this article, Gary Fabian, is the Principal of Precision Advisory and is a long term, experienced financial adviser. He specialises is risk insurance, superannuation and residential and commercial finance.

Everyone has heard the analogy about the iceberg, you know, you only see the tip of the iceberg, but there’s a lot more to it than that!

You can use this analogy for a lot of things really (I do often), but it’s a very true one when it comes to getting a good financial plan together that will reflect your true needs, wants and objectives for your financial future.

I do emphasise the word, good here, as like anything, if you pay across hard-earned money for something, you want to be sure you’re getting value for your money, don’t you?

I often here people say “why do I need to get a financial plan together”? Or, more importantly, why do I have to pay to get a financial plan together?…the answer to this is simple and I’ll use another well-worn saying here which is People don’t plan to fail, they fail to plan. So true for the majority of our population as I guess life just gets in the way and most people don’t get around to doing it and then they wake up 35 years down the track and wonder what the hell happened???

On the subject of actually paying for the financial plan, my comments to this statement could be many, but I’ll keep it brief for now. Having a professional prepare a detailed financial plan (AKA, Statement of Advice) that truly reflects your personal financial circumstances and also takes into account what it is you want to achieve in the future, takes time, research and effort and all of these things cost money.

Not to mention the fact that a true financial professional knows what he or she is doing and will bring something to the table that you just can’t (apart from specific expertise) and that’s objectivity…VERY important!

Even for people who are high-income earners and have reasonable, or in some cases, very strong asset bases with low debt levels, they can get so much more traction from a well prepared financial plan. Just because they might be doing “very well” by the standards of us mere-mortals J with a good financial plan in hand, they could do so much better.

In fact, recently I prepared a financial plan for one such individual who was doing very well in his business, earning really good money, growing his family asset base, as well as growing the family business.

As a financial adviser, I was impressed with his candid attitude when he said, “I need to focus on what it is I do best and build this business and make money and find a professional I can trust to assist me to secure the financial future for myself and my family”.

It wasn’t the fact that I was preparing a comprehensive financial plan for him that impressed me, as I’ve done plenty of them. It was the fact that he didn’t need to be told or convinced that a well prepared and executed financial plan would benefit him far more than the cost of getting it done.

Along with it he was also prepared to allocate the necessary time for me to get all the information I needed to get the job done properly and spend more time down the track with reviews and adjustments whenever it was needed. And guess what, he’s getting really good results from this plan that has been devised for him.

Don’t think for one minute that I’m advocating that financial plans are only for the well off and high-income earners, as that couldn’t be further from the truth. In fact, everyone can, and should get a financial plan prepared for themselves. Perhaps if more people did this there would be less financial hardship in a lot of families and especially a much higher level of self-funded retirees in society, which has got to be a good thing overall for the economy.

I’ve said before that something like this should be taught at schools to our kids from an early age, or at least in early high school to give kids a good understanding of money management etc. But, I don’t want to get started on this particular subject right now. I’ll leave that for another forthcoming blog article.

Of course it’s all good and well and to go out and find who you think is a good financial planner, then pay them some money to prepare a plan for you and then you go and shove it in the draw somewhere safe and never do anything with it.

And to add insult to injury, that so called good financial planner never even picks up the phone and calls you to follow up after you’ve gotten your plan and to get things moving forward in the right direction.

Both of these are wrong! Plans require action to make them work and action is what gets us somewhere, anywhere in life! AND, to be a good financial planner he or she needs to follow up and stay in touch with the client and motivate them to put the plan in action.

In my experience, anyone can get great results from a well prepared, but most importantly, a well executed financial plan. And I do mean anyone. It doesn’t matter what background you have, what type of job you have or how much money you earn. A good financial plan that is executed and followed through will almost always reap great benefits to the plan-owner.

It’s important also for everyone in this equation to have realistic expectations about the outcomes. Nothing great or worthwhile ever happens quickly, remember that. I always like to explain this to my clients from the very out-set of the relationship, and for financial planning outcomes to be successful there will need to be a relationship of sorts in place between the planner and the client.

That’s just the way it is and will always be and it’s the main reason why robots will never take the place of successful financial planning humans who develop a working relationship.

This is not a one-size-fits-all industry and good financial planners know exactly that.

So, if you really want to have financial prosperity in your life, go get a good financial plan happening…can’t go wrong!

The writer of this article Gary Fabian, is a qualified Gold Coast financial adviser and director of Precision Advisory.

A NerdWallet survey of more than 2,000 couples has revealed that roughly 1 in 3 couples do not have any life insurance at all and 43% of those adult who actually do have some life insurance say they would not be financially prepared or capable if they were to loose their spouse.

And, it also revealed that women would be more financially affected than men…so take note of this, thoughtful husbands out there every where.

Here are 5 things couples can do to be prepared in the event of the loss of a spouse:

A will is a legal document that outlines and designates who gets specific belongings and assets after you die. It’s a very important document and needs to be kept up to date. You name an executor (aka personal representative to manage your estate) and you can also name a guardian for your children. There is plenty of DIY will kits out there that you can use and frankly, they’re better than not having one in place at all. However, a solicitor can assist you with preparing a will in a little more detail than a DIY will kit will do but in any case, you need to have a will.

As I always say, no one is bullet-proof, so don’t take this issue of life insurance for granted. We all die, that’s an indisputable fact!

And it usually happens when you least expect it. Most people just rely on whatever life insurance their employer provides them through their default super fund but this is usually never enough.

And don’t for one minute think that just one of you should have life insurance and not the other, because death doesn’t discriminate.

Both spouses should have life cover, even if one is a stay-at-home parent.

There are a few different ways to work out how much life cover is enough and a professional (Risk) Adviser will be able to guide you in the right direction for this.

Even if one of you is more involved in the day-to-day financial management of the household, the other spouse should have at least a basic understanding of what is what…this should make sense, doesn’t it?

It’s amazing how many people, or couples just don’t know where their important financial documents are kept or worse still, many people don’t even keep them and end up, for whatever reason, loosing them. It’s hard enough having to deal with the emotions of loosing a loved one and then having to ferret around and find that person’s important financial documents such as a life insurance policy is usually the last thing you want to do. So keep all of your important financial documents in a safe and secure location that both of you know about and are able to get too if a tragedy does happen.

The NerdWallet survey also found that a large number of people simply do not know anything about their spouse’s final wishes, including their preferences about burial or cremation or even if they are listed as an organ donor.

Some people have very specific wishes but like a lot of things, we’re afraid to communicate these types of things and talk about them to our spouses.

Especially today with so many blended families it’s so important to get instructions right about our belongings and assets and exactly what we want to happen when we die.

The problem is that most families don’t look into estate documents until after the funeral and conflicts can, and often do arise about what someone thought, or expected would be left to them.

This is a sad and very true fact unfortunately and talking about the end of your own life, or harder still, the end of your spouse’s life may not be a very nice topic of conversation but it’s the responsible thing to do.

This way there is no uncertainty and it’s all about managing expectations at a time that is usually extremely emotional and painful for the surviving family members.

So, even if you consider yourself not to be one of those people who is all that organised, make an effort on this subject for the ones you love.

There are many gifts of love you can give your family and the gift of security is one of the best!

* The author of this article, Gary Fabian is a financial adviser and principal of Precision Advisory and specialises in risk insurance and superannuation. 

Christmas is a wonderful time but it can be very busy and often a stressful time of the year and certainly an expensive time of the year for just about everyone. Here are 7 finance tips to help keep the expenses in check and to relieve the burden of carrying forward extra debt into the new year.

Even if you’re not organised for the rest of the year try as hard as you can to be organised for Christmas and you might find it’s a little less stressful on your head and your wallet. When you’re organised and plan things out in a logical way you’ll usually find this will overlay to your finances as well. It’s easy to get caught up in the excitement of it all but the extra debt you might end up with won’t be exciting at all when it comes to paying it off.

A part of being organised is to write things down so make a list of everyone you’re going to get presents for and then double-check and be sure you’re not going over board about it. I’m not suggesting for one minute to be the Christmas Grinch by any means, all I’m saying is to be mindful of who you’re buying pressies for, that’s all. When you’ve finalised you’re list, then go over it and work out what would be a good present to get that person and try to put a reasonable budget to it and off you go shopping.

I know it’s always busy at every shopping centre but if you try to plan when you go and keep away from the obvious really busy times then you’ll probably find you’ll enjoy it a little more and you won’t get caught up in the crowds and the hassell that goes with and get feed up and just buy anything (at any price) just so you can get outta there. An obvious part of being organised and having a plan is to try to get your shopping done in early December rather than late December, at the last moment. This way you can keep your budget in check and keep some degree of sanity as well.

Credit card debt in January and February is beyond enormous and it is without doubt because most people get caught up in the buying frenzy that is Christmas shopping. Whatever you do, keep a very close eye on your credit card spending because it’s an invisible monster that will creep up on you and take all the fun out of Christmas when the bills start coming in. Again, this is not about being tight-fisted, it’s about being financially smart about consumer debt and credit cards are the worst enemy of them all for this.

In keeping with the previous tips about being organised, having a plan and keeping an eye on the credit card, the obvious tip here is to have a budget worked out for how much you’re going to spend over the Christmas period and monitor you’re spending as you go and stick to the budget you’ve worked out. If you do this there probably won’t be any (unwanted) financial surprises after Christmas is over and whatever credit card debt you have should be manageable.

Just because it’s Christmas and you’re giving a gift doesn’t mean it has to be expensive. In fact, with a little bit of thought you can give wonderful gifts to your friends and family that have meaning and warmth and will last in their memory as gift from you from your heart, not your wallet. This just comes down to your Christmas plan you devise and being a bit creative and thinking about what it is that the person you’re buying for really likes and their particular character and guess what, you’ll probably come up with a wonderful lasting gift for them that won’t break the bank either.

This one is not really a tip, I just threw it in… As always, the best feeling in the world is to give rather than to receive. So, enjoy the Christmas festive period and enjoy the giving of thoughtful presents to those people you love and admire.

* The author of this article, Gary Fabian is a financial adviser and principal of Precision Advisory and specialises in risk insurance and superannuation planning.