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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



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


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.

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


© Grant Featherston/Licensed by VISCOPY, Australia


* RBA inflation calculator



Chairman's Report 2018

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Written by Marketing

Chairman's Report 


About our Chairman: Scott Martin 

  • Scott has been Chairman of the Board since 2017
  • A Director since 2012
  • And holds BSc Hons PhD GAICD FAIP 


On behalf of the Board, I am pleased to present to Members the 2018 Annual Report for Laboratories Credit Union Limited in our 64th year.

Financial and Operating Performance

2018 has been another year of very healthy growth and pleasing financial performance in all areas: 

  • Reflecting another year of careful cost control, LCU achieved a net interest margin (the average difference between lending and borrowing rates) of 1.95%, which compares to 1.97% in 2017, and an industry average of 2.5%
  • Despite keeping LCU fees and charges at sector-leading low levels, our 64th consecutive pre-tax surplus was both pleasing and on-target at $1,040,704, compared with $1,123,632 in 2017.  This surplus grows LCU member total capital to $13.1 million, and generating a healthy Return on Assets of 0.42% (similar to 2017’s 0.47%);
  • Our critical financial resilience metrics remain within our target comfort zones and well in excess of prudential requirements: Capital Adequacy was 16.2% (cf 16.54% 2017) and Minimum Liquid Holdings 16.16% (cf 18.85% 2017).
  • After the unusually strong loan growth experienced in 2017, this year we have achieved more normal level of loan growth of 6.1%, which combined with 5.7% deposit growth.

These excellent financial results rest on long-established foundations.  Prudent and frugal operations lie at the core of LCU’s ability to offer industry-leading value and still return earnings to boost capital. LCU’s cost base is improved by having a single branch, by having efficient and engaged staff cross-trained over multiple functions and through the effective use of technology. However, the inexorable cost of technology is a factor that LCU will always be exposed to as one of the smallest players in the prudential sector.

In summary, LCU has delivered another excellent result from strong financial fundamentals, which place us well entering the 2019 year.

Member Services and Marketing

2018 has been another year of strong member service performance, reflecting our focus on friendly personalized service, innovation in our service offer, and planning for the future needs of our evolving membership.

Consistent with our CSIRO roots, LCU has aimed to be at the forefront of technological developments for members and has been amongst the first to offer ApplePay, AndroidPay and, more recently, Osko, Australia’s new almost instantaneous payments platform.  In 2017 we undertook a project to migrate the hosting of LCU’s core banking system to an alternate supplier – one that offers more longevity (more credit unions are using it) as well as lower costs. The migration placed significant demands on staff for many months (testing and validating) and I commend them for delivering the upgrade without any inconvenience to members.

LCU has also revamped our car loan product offer, which has led to a pleasing uptick in loans.

In line with LCU’s member-centred approach, Your Financial Wellness has been released to members as a powerful aid to help members understand their current and future financial positions.

The team at LCU is committed to spreading the footprint of the credit union and had led and participated in a diverse set of professional, community and member events and initiatives in the 2018 year. A key example was hosting the Riverside Business Chamber networking event in February in addition to several organisation-specific events in the Riverside Corporate Park.

Our connection with CSIRO and NMI was vibrantly supported via sponsorship of events, scholarships and amenities across sites, and as a CSIRO employee, myself, I can attest to how LCU’s local support is appreciated by staff. For example, LCU contributed to the purchase of some new gym equipment at the Lindfield site, which is giving a substantial boost to site vibrancy.

LCU’s campaign to 18-35-year-old members was reinvigorated under a program with Natural Mind Concepts working with staff. We’ve already seen an uptick in membership in this demographic linked to additional deposits more than $800k.

Economic Landscape

Smaller, non-diversified financial institutions historically experience an operational squeeze during times of low interest rates – it’s simply harder to maintain the net interest margin. When interest rates were reducing some years ago, our strategy was to tighten the belt on spending and weather the coming lean time. None of us expected it to last this long! The previous and current senior management of LCU are to be congratulated in not only weathering this transition but having established an operating configuration in which LCU not only survives, but thrives during low interest periods. Our 2018 figures are strong despite not a single official RBA interest rate change in the year.

System-Wide Machinations

I don’t intend to say much about the Royal Commission, suffice to say that thus far it has shone a positive light on the customer-owned banking sector as a real alternative to the large banks. Notwithstanding the disgust of customers of big banks to the public revelations there has yet to be a substantial exodus and is, perhaps, indicative of the populace indifference to banking, which is I believe partially responsible for enabling the poor business practices in the first place.  

Compliance and Regulation

Compliance and regulation are aspects of LCU’s operation that should not be apparent to the member, but from a board perspective, they are arguably our highest demands on time and effort.  In this context, I would like to acknowledge Joanne O’Donnell for her work establishing the TriLine Risk Management System at LCU, ably supported by management and staff. This marks a significant evolution for LCU from a landscape of manual spreadsheets to an integrated system across the organization, making welcomed efficiencies!

In contrast to the past couple of years, APRA has alleviated some of the investor lending constraints for mutuals. This is a welcome development and one that we interpret as an acknowledgement of the lower actual risks in the system from the mutual sector. However, LCU business-as-usual was not constrained by APRA’s previous limits so, equally, their removal confers no immediate benefit.


It was my great pleasure to present LCU Tertiary Scholarships for 2018 to recipients Dibyendu Roy, Alice Warrington, Annika Rees, Ethan Kalms, Amy Bendixsen, Sabrina Colatosti, Maya Robertson, Alex Wieringa, Brett Whittard, Tafyd Love, Lachlan Sinclair and Jaqueline Albert. LCU's tertiary scholarship scheme was instigated by former director Don Pendergast, who attended the luncheon ceremony, which remains an event central to LCU's bond.

Since the inception of the CSIRO Alumni Scholarship in Physics in 2015, LCU has been the major sponsor, in the memory of Drs Gerry Haddad, Tony Farmer, John Dunlop and Don Price. As an ex-colleague of these fine gentlemen at CSIRO Lindfield I am particularly proud of the support LCU provides to this prestigious award. LCU directors Dr Tony Murphy and Dr Anita Andrew and former director Dr Warren King are members of the selection panel for the scholarship.

This year, the scholarship was awarded to Naomi Paxton from QUT. In a truly invigorating ceremony, Professor Michelle Simmons, Australian of the Year, congratulated Naomi via recorded video[1] and CSIRO’s Dr Martin Cole made the presentation in person. Naomi presented an overview of the research she will undertake in the bio-fabrication for repair and replacement of human tissues. 

Board and Staff

I would like to thank my fellow Directors, Anita Andrew (Deputy Chair and Chair of the Board Risk Committee), Frank Benito de Valle, Tony Murphy, Allison Smart, Peter Steele, John Stephens (Chair of the Board Audit Committee)  and Paul Swan for their valuable contribution to the governance of LCU over the past year. I would also like to thank our Associate Director Amber O’Connell, who attends Board meetings by invitation and provides invaluable service and views to the Board – Amber has made unprecedented contributions to the strategic planning activities of the Board and governance.

This year we farewelled Kieran Greene from LCU’s Board of Directors.  Kieran served as director since 2000 and as Chairman between 2006 and 2009. We marked the occasion with a wonderful dinner during which appreciation for Kieran’s attributes as a gentleman and a director resounded around a packed room. On behalf of LCU, I gratefully acknowledge and thank Kieran for his years of service; particular, his dignity, integrity and generous votes of gratitude towards others over the years. His positive influences on board culture and respectful discourse have set a precedent for decades to come.

The Board gratefully acknowledges the friendly service and commitment of our staff Leanne Harris, Eileen Thoms, Lyn Slatter, Kerrie Griffiths, Rhonda Hatton, Susanne Tran-Lowder, Nalini Mannie, Deepthi Satheesan, Matthew Thoms, Joanne O’Donnell and Betty Ho. Personal service and member value are the cornerstones of LCU’s success. We wish a successful and happy future for Dee, who left LCU this year to pursue a career closer to her new home on the central coast. From a personal perspective, it has been a pleasure collaborating in joint events in my role at CSIRO.

Looking Forward 

Last year, in this section I listed the Risk Management System, the Osko payment system, involvement in SocietyOne, APRA CET1 capital approval and LCU’s participation in the loan sharing scheme and coming developments. It is wonderful to be able to say that all of those exciting initiatives have come to pass and I commend management and staff for their dedication to LCU. It is testament to the able and committed leadership of Leanne Harris that LCU has been able to complete so many challenging projects in addition to business as usual and maintaining LCU’s exemplary hallmark customer service. 

Except for the launch of a new mobile banking app, there are no other significant IT projects in 2019. So much has been undertaken and accomplished in this area in the past two to three years that we now find LCU in a position well prepared for years to come.

In its entire 64-year history, LCU has returned a surplus and today LCU has a solid model for sustained business even under low official interest rates. Our banking and operating systems are recently upgraded. I have strong confidence for LCU in coming years. One persisting concern (for the entire sector) is attracting younger members by offering a relevant and appealing proposition – not only in financial services, but being able to capitalise on the resurgence in authenticity and social responsibility. In many ways, that’s where mutuals originated – we are akin to craft-banking or artisan-banking – we (collectively) face the challenge of how to get the message out there! LCU’s sustained strength can be attributed to members’ enthusiasm to promote and recommend LCU to friends and family – it is a powerful channel. On behalf of LCU, I thank all members for advancing our mutual cause and implore you to keep up the great work!

Scott Martin
Chairman 19 September 2018







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