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Helping your adult kids to be financially savvy

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Written by Marketing

It is human nature for parents to want to provide for their children but at some point, the “help” you may be giving them could actually be more of a hindrance to them gaining their own financial independence - stunting their financial literacy and growth.

Your financial future is at stake

The other consideration is your retirement lifestyle. If you are 50 or older, now is the time to be setting yourself up for the future and making the most of every discretionary dollar for the development of your nest egg. If you are operating the “bank of mum and dad” for your kids instead of building your retirement, it could mean you need to work longer or compromise your retirement lifestyle.

Helping them become financially savvy

So, what can you do to help your kids get a grip on their situation and gain financial responsibility?

You can give your children positive encouragement and tangible education on the financial life skills they will need. This doesn’t mean you should suddenly “cut them off”, but it does mean you need to begin a serious discussion with them about the costs of maintaining their lifestyle and determine a timeline for passing over responsibility to them.

Budgeting is the foundation

If you have been putting food on the table and a roof over their head, chances are their income has been directed toward spending on their own entertainment and enjoyment. Giving them an understanding of budgeting is critical for them to gain a broader view of what it takes to survive and prosper financially.

Fortunately, there are plenty of budgeting tools available online or through banks, which you can encourage them to use and help them to complete. This will give them an understanding of the scope and scale of spending required to live independently, as well as an appreciation of the differences between essential living expenses (such as food, utilities, communication, transport, and rent) and discretionary spending (such as eating out, entertainment, gaming, and hobbies).

Developing responsible habits

An extension of the budgeting process is to educate them on the vital importance of saving regularly from their income. Start with a simple rule of saving a set percentage of everything they earn. This can then be developed into goal-oriented saving for various objectives they consider important and worth sacrificing for.

If you do want to provide some form of financial support, rather than giving random handouts toward immediate needs, perhaps you can offer to match their savings dollar for dollar in support of something worthwhile, such as a home deposit, rental bond, or a business venture. This gives real incentive to form solid saving habits that will benefit them throughout their life.

Educating on credit is also essential as it is easy for them to quickly rack up personal debts that can demoralise them and distort their financial priorities. Analysing a month’s spending may point out where their income is being squandered or wasted.

Creating wealth slowly

Your children may view the concept of creating financial independence as something that can only happen through outrageous luck or taking huge risks for quick gain. Therefore, one of the most vital lessons you can pass on is the value and importance of creating wealth slowly.

Real financial independence is not the result of a lottery win or riding the back of an investment boom — rather it is the result of forming sound investment practices such as:

  • Allocating a certain proportion of your regular savings toward long-term wealth creation plans
  • Utilising available tools that accelerate wealth, such as superannuation tax incentives
  • Diversifying investments beyond bank term deposits and into a variety of asset classes that relate to your investment time horizons
  • Planning for contingencies (such as sudden loss of income or emergency expenses) by establishing an emergency savings plan and personal insurance protection plans
  • Seeking the advice of a financial adviser to coordinate all of the above, and to develop a lifelong plan and strategy for wealth creation.

Start the conversation now

Delaying the steps outlined here may result in an ongoing cycle of dependence that will only become harder to break if it isn’t addressed.

Take the next step

To discuss your financial situation, make an appointment with a Bridges financial planner.

If you would like to learn more about account features offered by LCU that might be of use in helping teach your adult (in name only!) child, then please feel free to contact us using the Enquire or Call buttons on this page. 

We have an established alliance with Bridges, to provide our customers with financial advice. Bridges has been helping Australians with financial advice for 30 years.

A Bridges financial planner will develop a plan specifically for you; one that’s tailored to your needs and circumstances to help you achieve your goals.

To make an appointment with a Bridges financial planner, contact us. LCU members are entitled to a complimentary and obligation free initial consultation .

Bridges Financial Services Pty Ltd (Bridges). ABN 60 003 474 977. ASX Participant. AFSL 240837.

This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner or a registered tax agent.

Examples are illustrative only and are subject to the assumptions and qualifications disclosed.

 
Enquire Call 02 9859 0585

 


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Cost of Banking Regulation for Smaller Lenders - Grant Thronton report

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Written by Marketing

 

COBA Media Release - 16 November 2018

Grant Thornton, one of the world's leading organisations of independent assurance, tax and advisory firms, released a report titled: rising fear over disproportionate cost of banking regulation for smaller lenders and the ultimate cost to competition and consumers.

As this is a topic very relevant to us here at LCU we encourage everyone to read the report. We have highlighted a few key points: 

  • Grant Thornton’s findings and recommendations are based on a survey of Customer Owned Banking Association (COBA) members which collectively hold the largest deposit pool and home-lending book outside the Big Four banks. The independent audit and financial advisory firm interviewed top executives from 26 banks and mutuals with asset sizes ranging from more than $5 billion to less than $1 billion. 
  • The report said smaller banks could be ‘squeezed out’, with profound implications for Australian consumers, if decision-makers forget that it was the Big Four who were ultimately responsible for the bad behaviour which led to the Hayne Royal Commission.
  • Grant Thornton has also created an infographic to help explain the varying cost of compliance across different financial organisations.

Read the Report Media Release

What Can I Do?

Are you tired of hearing bad news and feeling helpless? Well in this case there is something you can do. Contact your local member of parliament or even the current finance minister at the time of reading. Find their contact details by heading to the Australian Parliament website here.

Contact your MP

What MORE Can I Do?

Become a part of the solution and join your local mutual institution. If that is us, excellent! You can Apply Online today! 

If not, please check the OwnYourBanking website to find the mutual financial institution that is best for you. 

Apply Online Find a mutual


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Christmas Opening Hours 2018

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Written by Marketing

Head Office North Ryde
Monday 24th December 2018 9:00 AM to 12:00 PM
Tuesday 25th December 2018 Closed (Christmas Day)
Wednesday 26th December 2018 Closed (Boxing Day)
Thursday 27th December 2018 9:00 AM to 4:30 PM
Friday 28th December 2018 9:30 AM to 1:00 PM
Monday 31st December 2018 Closed (LCU Picnic Day)
Tuesday 1st January 2019 Closed (New Year's Day)

North Ryde - Normal office hours resume from 2nd January 2019

Lindfield
Last Wednesday for 2018 12th December 2018
First Wednesday Back in 2019 16th January 2019

EFT and BPAY cut off for Christmas 2018 and New Year 2019

Christmas - If you wish for a payment to be made before the Christmas Public Holidays, it will need to be sent by Thursday 20th December 2018, cut off time is 4 PM for external funds transfers and BPAYs.

Payments made before midday on Friday 21st December 2018 will be sent, but may not reach the recipient before the next working day Thursday the 27th December 2018.

Payments will be processed again on Thursday 27th December 2018.

New Year - If you wish for a payment to be made before the New Year Public Holidays it will need to be sent by Thursday 27th December 2018, cut off time is 4 PM for external funds transfers and BPAYs.

We are closed on Monday 31st December for our LCU picnic day – so after 4 PM on the 28th December 2018, the next lot of payment processing will be on Tuesday 3rd January 2017.

Please note: although LCU remit the funds by the cut off times, we can not guarantee receipt at the other Financial Institution by the due date.

Merry Christmas from the LCU team :)


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Investment fundamentals

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Written by Marketing

You may not think of yourself as an investor but if you have a super account you probably are! Bridges, our financial planning partner, explains some fundamentals of investing in this short video.

 

 
Bridges Financial Services Pty Ltd (Bridges). ABN 60 003 474 977. ASX Participant. AFSL 240837.
This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner or a registered tax agent. 
Examples are illustrative only and are subject to the assumptions and qualifications disclosed.
Part of the IOOF group
 
In referring customers to Bridges, Laboratories Credit Union Ltd does not accept responsibility for any acts, omissions or advice of Bridges and its authorised representatives.
 

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Quality or Quantity

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Written by Marketing

Quality or quantity

The clothes we wear, the furniture we sit on and the items we use throughout our lives take their toll on our savings and overall wealth. Not to mention the environment. Here’s how you can make long term choices, whether you’re investing in fashion, furniture or home decoration.

This season, go for quality and go green

The fashion industry thrives on telling people what the must-have items are from one season to the next. This season, help direct the conversation away from impulsive purchases to more considered, quality choices that are also more sustainable.

This begins with your fabric choices. Instead of purchasing a suit made with synthetic fabric that may only last a season, invest in a wool suit in classic styles and colours that you can wear for years to come. Cutting back on your consumerism reduces waste and saves you money in the long term.

The fashion industry leaves behind a huge environmental footprint. From the pesticides used to grow cotton to the chemicals found in fabric dyes, choosing organic fibres or sustainable fabrics, such as those made from bamboo or hemp, will significantly reduce the toll your clothing takes on the environment. Finding timeless, durable pieces will also mean your wardrobe is more distinctive and unique.

Earth-friendly furniture

When it comes to investing in furniture, there are a number of products on the market to look out for.

Wood is the obvious choice. It’s durable and is easily maintained — lessening the chance of it ending up in landfill and saving you money in the long run. Make sure you know where it comes from. Check for the Forest Stewardship Council (FSC) label; this ensures the product you’re buying is made from responsibly sourced wood.

Many furniture designers are using reclaimed wood in their products, sourced from old furniture or houses. Also look out for designers making the most of recycled metals and plastics, which lowers the demand for new materials and lessens the impact on the environment.

You could also invest in quality antique or vintage furniture that can be preserved, restored and potentially be a valuable asset that you could sell or pass on to your children — leaving a long lasting legacy.

Home sweet home

Making purchases for your home means considering the environmental and social impacts of manufacturing and the longevity of your items.

Here are a few key things to keep front of mind when making purchases for the home:

Aim to purchase high-quality products such as durable carpet, lounge suites and curtains. You may pay more up front but they’ll retain their value, last longer and have less of an impact on the environment.

  • Look out for the energy rating on appliances such as washing machines, fridges, ovens and TVs.
  • Buy local — this not only keeps Australian producers in business, but also reduces the environmental cost of shipping.
  • Buy and sell second-hand products — donating items to charity and buying used products reduces the amount of items that go to landfill. This, in turn, can reduce the manufacturing demand for some products.

Grant Featherston chair

Grant Featherston was a famous Australian designer, best known for designing furniture. In 1955 the National Gallery of Victoria paid £14/1/6 ($28.15) for a Grant Featherston chair.

In 1955 this was an expensive chair but it has more than held its value since then. A chair like this was recently advertised for sale at $4,000. This represents an increase in value of 14 per cent per year comparing favourably to the rate of inflation which only increased by 4.6 per cent per year over the same period.*

Buying high-quality items might seem extravagant at the time but in years to come they may hold their value better than cheaper alternatives.

The purchasing decisions you make affect your wallet but they can also affect the planet.

 

Grant Featherston (designer) EMERSON BROS PTY LTD, Melbourne (manufacturer)

R152 Contour chair (designed — 1950); (manufactured — 1951) hardwood, plywood, linen, (other materials)

National Gallery of Victoria, Melbourne Purchased, 1955

1532-D4

© Grant Featherston/Licensed by VISCOPY, Australia

 

* RBA inflation calculator

 


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