 Most people experiencing difficulty balancing their household budget do so because they don’t adapt their spending habits as their level of financial commitment changes over time. To explore this in further detail let’s look at a hypothetical example; A couple meet in their early twenties, both working full time, both living at home with their respective parents, no financial commitments. Initially this couple have complete freedom from a spending perspective. All the income they earn is theirs to spend as they choose – often, spending choices like overseas travel, retail purchases, or self-indulgent socialising can be made at the drop of a hat. It’s a great time of life, with many fantastic life experiences to be had – however it’s not necessarily a period where utilising the skills of sound financial management are often front of mind. If we then look ten years forward for this same couple their financial life can look completely different. If the couple have started a family, the two full time incomes will have reverted to one income (or maybe one and a half incomes). On top of the additional cost of raising children (food costs, healthcare, insurance costs, education etc.) the couple will also have the ongoing monthly obligation of either rent or a mortgage payment. This is where the pain of financial mismanagement can really start to hurt. Instead of the example couple having a plan that addresses and educates the changed set of financial circumstances often they will mismanage this increase in expense levels by carrying a credit card debt (or worse still juggling multiple credit card debts), and personal loan debt. It is simply a statement of fact to say that your financial circumstances will change many times over your working life. If you don’t, (or don’t know how to) adapt your spending levels to your changing circumstances you need the assistance of an industry expert who can help you to learn and manage the skills to adapt your household budget to your current financial capacity. Take the anxiety out of managing your own money – Contact Leigh at Empower Money Management today.
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 I was watching a program on commercial television earlier this week, and an ad for a credit card comparison website came on during the break. The premise of the ad was that you could potentially save thousands of dollars in credit card interest costs by switching to a credit card that charges a lower rate of interest. In my opinion that is just a complete load of garbage to be making such a claim – I have worked in the finance industry for over 30 years and in that time I have never seen a person become financially better off by switching their credit card from one type of credit card to another. There is ONLY ONE sustainable way of improving your financial position with regard to credit card usage; and that is to pay the balance owing in full prior to the due payment date each month. If you are choosing a credit card facility on the basis of the interest rate charged on the card, then you shouldn’t have it in the first place – because the harsh reality that you need to confront first is that you are spending beyond your earning means. If you are carrying over a balance from month to month on your credit card you are losing, and your credit card provider is winning. An outstanding balance on your credit card from month to month means that you have committed some of your future income before you have earned it – and put very simply you are engaging in financial behaviour that is neither sustainable or emotionally enjoyable. REMEMBER, a comparison website offering product change does not equal financial freedom – real financial understanding and empowerment comes through education and sustainable behavioural change in the way you manage your own money. If you are ready to make sustainable change to the emotional minefield that is the current state of your financial affairs then why not join the growing list of satisfied clients who have used my expertise to empower themselves to take control of their own finances. Contact Leigh at Empower Money Management today. Here are some simple tips to keep your Christmas spending under control. Thanks to the MoneySmart Website. https://www.moneysmart.gov.au/tools-and-resources/news/12-money-tips-for-christmas 
However, what I think has been lost in the relentless nature of modern marketing is the capacity for people to recognise their spending limits, and then feeling ok (not pressured by society) about choosing to spend within their means.
Buying something at the post-Christmas sales because it was 50% off is not a reason in itself to buy something that you don’t really need. I would argue that if you didn’t need a certain item the week before Christmas than you probably don’t need it the week after Christmas. Furthermore, no matter the price paid an item isn’t cheap if you are still paying for it 6,12,24 or 36 months after you first bought it. Unfortunately too many of us fall in to the trap of using credit for Christmas shopping. The residual debt of a Christmas and post-Christmas shopping binge is often one of the key factors in people experiencing cash flow and budgeting issues into the New Year. Using credit for Christmas shopping, combined with the expense of a summer holiday, followed up by back to school expenses in January/February, followed by rates bills in February is often the catalyst for people getting the feeling of being overburdened by their financial load. As with most things in life the key is planning. I mentioned earlier in the article I have no wish to be seen as the Christmas Grinch. Creating a manageable budget, and understanding the difference between a need and a want is the key not only to a happy Christmas, but the key to financial peace of mind throughout the rest of each year. Empower Money Management can help with creating a manageable budget, and provide you with ongoing coaching to assist achieving financial peace of mind. Contact Leigh today www.empowermm.com.au; leigh@empowermm.com.au  Although the Reserve Bank of Australia has made no change to official interest rates since August 2016, inevitably at some time in the short to medium term future that will change. Exactly when that will be no one can be certain of. All so called “experts” will have an opinion; however nobody can predict interest rate cycles with any certainty.
The official cash rate currently sits at an all-time low of 1.50%. What this means to a borrower is that the actual rate a customer will be paying through the retail provider of their home loan will generally be around a variable rate of 4.00% in the current marketplace. If we use the example of a borrower taking out a new loan of $250,000 over 30 years at 4.00% variable the minimum repayment required would be $1282 per month. In this example the $1282 per month is the minimum payment required every month for the next 30 years. This does not take into account any rate changes during the term of the loan, or just as importantly it does not take into account any change in your personal circumstances during that time. Having pointed that out, there would obviously be very likely to be a number of significant changes to your personal circumstances during that time (e.g. job loss/change; birth of a child; change of relationship status; education expenses; additional debt obligations etc.). I therefore pose the question to you – How do you educate yourself around the options available to you? Let me further illustrate my point;
YOU NEED A PLAN! You need to seek some objective direction from someone independent of your current lender. You need to seek some assistance from someone with the skill, empathy and experience to provide you with non-judgemental training and education in the more efficient and effective management of your own financial affairs. “My coaching program is designed to empower people to develop a capacity to make better financial decisions on their own behalf; and enjoy the financial peace of mind that can be created with appropriate levels of planning and control.” To arrange an obligation-free consultation contact Leigh today.  Why don’t you review your financial affairs? One of the key challenges I have faced with establishing Empower Money Management is getting prospective clients to understand the value proposition I am offering. Just like any consumer decision, there has to be recognition of the value of the transaction for the client to proceed with the purchase of the product or service. I can’t think of a simpler way to demonstrate the value I am offering to my potential clients than by providing an overview of the following information. The vast majority of the financial products and services utilised by Australian consumers are still provided by the big 4 banks. That is, CBA, NAB, Westpac and ANZ. In the most recent full financial year reported the combined profit of those four organisations was $28,864M. Again, that figure was $28,864,000,000. So, let me repeat my headline question – Why don’t you review your financial affairs? I believe the key reason why is that most people don’t know where to start – They just think it’s too hard to represent their own best interest in a conversation with their bank. This is where I step in on your behalf – I’ve sat in the Bank Manager’s chair. I’ve sat in the mortgage broker’s chair. I know the questions to ask on your behalf. I can help to level the playing field for you – And represent your best interests in the conversation. Not the best interests of contributing more profit to the $28,864,000,000. I offer my clients an independent fee-for-service review of their existing financial affairs. I DO NOT sell or recommend specific products. Put very simply, through coaching and education I assist my clients to review and understand their existing financial affairs. Based on my review we then seek cost saving solutions to any issues identified. Of course those solutions may involve the renegotiation of existing financial products, or the purchase of new financial products. Once again, I DO NOT sell those products – however I assist my clients in the understanding and negotiation of the purchase of the products that may be required. My first appointment is free - To learn more or to make an appointment contact me as follows; 0407 439 827 leigh@empowermm.com.au  I never cease to be amazed by the ongoing popularity of “reality” television, the world of “celebrity” magazine coverage, the banal nature of some forms of social media communication and the like.
It seems to me that some people find the world of mindless escapism offered by these forms of communication as preferable to dealing with the realities of their own lives. This raises the question - Why do we find it preferable to waste time and energy consuming these manufactured forms of drama? Think of it like this;
Clearly I could provide an endless list of examples, but when viewed through the window I have outlined above I think most of us can see the absurd nature of the distractions we often allow into our own world. Of course we all need a little light relief in our lives, and I’m not for a moment suggesting otherwise, however I think the key here is to have an appropriate sense of perspective as to what are the real things that are important in our lives. I know, because I have seen it so frequently over 30+ years, what real value, real happiness and real financial peace of mind is provided by sound household financial management. I have established Empower Money Management to share my expertise with clients who struggle to understand the nuances of sound financial management. I provide fee-for-service budgeting assistance, coaching and education around the efficient and effective usage of your own money. To learn more or to join the growing list of clients who have benefitted from my experience contact me today. leigh@empowermm.com.au www.empowermm.com.au M. 0407 439 827  Whether it is a business that sells stock, or whether it is a business that sells or provides a service all businesses generate their revenue through the provision of their particular products and/or services. That’s how a business operates in a capitalist economy.
Including myself, I wonder how many businesses are in the habit of regularly checking in with their clients or prospective clients as to how well they are actually meeting their needs. To explain further - I have a belief that there is a definite need in the financial services marketplace for a service such as mine. My service is not product based. Broadly speaking, I offer fee-for-service budgeting assistance, finance coaching and education in the more efficient and effective usage of your existing financial products and affairs. Since commencing my business in late 2016 I have helped many people as I have outlined above. However, through actively listening to the concerns of my clients I have developed a much broader scope to my business than I initially imagined. For example I have helped small business clients in areas as diverse as researching and writing new business plans and marketing plans; employers have engaged me to provide financial review services for their employees; and I have also diversified into areas like providing information sessions on financial literacy to secondary school students. As a small business I also have the advantage of being instantly contactable. The immediate nature of contemporary forms of communication means today’s consumers want more or less instant responses to their needs. Unfortunately, the massive size of most financial organisations often counts against them with regard to their capacity to actively and promptly listen to their client’s needs, or for that matter for you to even know who to contact at the bank in the first place. Most financial institutions also operate in a very sales focused environment, which is often counter- productive to the actual need of their clients. I would be interested to know how many people have come away from a meeting with their banker with another product that they had no idea they “needed”. Through staying small and really listening to what my clients are telling me I can respond quickly to your needs. Furthermore, if our meeting leads to a realisation that your needs are outside the scope of the services I can provide I have an extensive network of expert finance industry contacts who can also assist. To help me to maximise the relevance of the services I provide I would love to hear from the people who follow my Facebook and LinkedIn posts. Tell me what your financial needs and concerns are, and together we can proactively take the first steps to assisting you. leigh@empowermm.com.au www.empowermm.com.au M.0407 439 827  I read an article a couple of days ago that pointed out it was now only 20 weeks until Christmas. For most of us Christmas means time with family and friends, gift buying and summer holidays – always an enjoyable time of year.
Whilst an enjoyable time of year, that then got me thinking about the Achilles heel for most people at that time. How do we go about paying for the expense of Christmas gifts and summer holidays? Unfortunately I’ve seen all too often during my 32 years in the finance industry clients who dig themselves into a big financial hole through mismanaging their money, and it often starts from the lead up to Christmas and then the following summer holiday. If you don’t plan ahead, a lot of the expenses that begin to mount up in the lead up to Christmas can soon snowball into a debt servicing load that can become increasingly difficult and expensive to manage. Think of it this way – I’ll list below a relatively stereotypical hypothetical example of the type and amount of expenses families experience during the Christmas/New Year period.
Obviously this is not an exhaustive list, it’s simply meant as a typical example. However, what it does portray is how quickly costs can mount, and if no defined plan is in place the problem of how those costs are managed then occurs. Again stereotypically, for most people who haven’t made a plan they will choose to fund these expenses via their credit card. The negative effect of managing this way is further magnified if there is already a month to month balance being carried on the credit card account. For the sake of my example let’s imagine we have a client who already carries a month to month outstanding balance of $5000 on their credit card. Following the Christmas/summer holiday/back to school period the $5000 outstanding on the credit card has become $12000. $12000 that depending on what type of credit card you have you may be paying interest at an annual rate around 20% - clearly not a sound or cost effective financing strategy. Thankfully, the alternative to the unfortunately all too usual AND stressful scenario outlined above is simple. HAVE A PLAN. BE YOUR OWN BANK – In the example listed above with the $7000 in expenses across the Christmas/summer holiday/back to school period the $7000 can be broken down into a weekly amount of $134.62 across the entire year. By being prepared to formulate a manageable budget that provides the discipline to save the necessary $134.62 each week during the year you have funded the expense of that time of year out of your own pocket. Furthermore, this means that the $7000 expense has cost you $7000. In this specific example you have effectively become your own bank. If you had borrowed the money the end cost is impossible to determine because it would depend on both what length of time it took you to repay it, and also what interest rate you were being charged. Most importantly, by NOT borrowing the money you don’t have those further debt servicing costs. Interest costs (and anxiety) haven’t been added on. To learn more about the value of having an effective budget, and also to learn about the value in effectively managing your existing loans and bank accounts contact Leigh at Empower Money Management. 0407 439 827 leigh@empowermm.com.au www.empowermm.com.au I usually try to present my Facebook and LinkedIn articles from a positive perspective, however there is no hiding from the realities posed by my article heading today – I’ve never met a client with financial stresses who isn’t tired of the emotional strain that creates.
Given that, the questions then become;
And then
And then
And then, and in my view most importantly
I like to imagine a financial life for my clients’ that revolves around positive experiences with the day to day management of their money. Through building a better understanding of the value of good financial management I help to free my clients of the grind and the emotional drain created by the mismanagement of money. A key motivating driver for me in establishing my business has been the opportunity to empower people with the skills and information to make sound financial decisions that then have a positive impact on both their emotional and financial wellbeing. It is possible to be in control of your emotions surrounding your money. To learn more contact Leigh at Empower Money Management. leigh@empowermm.com.au www.empowermm.com.au |
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Contact Leigh: 0407 439 827 |