Early planning can take away a lot of the stress and uncertainty that can arise when considering aged care at home or a residential aged care facility.

Know what your options are

The first option that probably comes to mind is a residential aged care facility. These facilities provide accommodation and care depending on your personal needs. Care can range from personal care, such as help with showering and dressing, together with occasional nursing care to continuous nursing care for those with a greater degree of frailty.

What you may not realise, however, is that there are also Home Care Packages that provide access to services that can help you to stay at home for as long as possible. Support services may include cleaning, meal preparation and transport for shopping or appointments.

Start planning early

There are a number of reasons why you should plan ahead and well before the need for aged care is imminent. For example:

• in many cases, the need to move into residential care can be sudden due to a serious illness or injury (eg a stroke, heart attack, or fall), or another unexpected event;
• it’s not uncommon to find there are significant waitlists for residential care, particularly at the more popular facilities; and
• regardless of whether home or residential aged care is required, if you wait until the last minute to speak to a financial adviser, you may not be able to minimise the fees you may have to pay and/or maximise the social security benefits you may receive.

Visit local facilities

Whether you currently need residential aged care or not, ideally you should plan to visit a range of facilities in your chosen area as soon as possible and, you may prefer to do this with family members.

Becoming familiar with the alternatives can enable you and your family to have meaningful conversations regarding your options and make more informed lifestyle and financial decisions.

Importantly, with assistance from a financial adviser, you can:

• determine whether care in your preferred facility is affordable; and
• potentially start restructuring your assets to improve your financial position;

Assess affordability

A range of fees may be payable when accessing care services. One of the key payments when moving into residential care is the accommodation payment. This payment:

• is subject to certain limits;
• can be paid as a lump sum, in regular instalments, or a combination of a lump sum and regular instalments; and
• is published on the facilities website and at myagedcare.gov.au for potential residents to consider.

The published amount will vary between facilities and, as a general rule, it will be higher for newer places because of the money recently outlaid on building or improving the accommodation, and for facilities in more affluent suburbs.

It’s therefore important to ensure you will have sufficient assets to pay the accommodation payment required to secure yourself a spot in your facility of choice when the time comes, as well as cover the ongoing aged care fees and your living expenses.

Understand the trade-off

There are a range of strategies that can be used to reduce aged care fees. However, caution needs to be exercised to ensure you have enough money to afford the care you’d want. A financial adviser can help you to address this complex issue. They can also assist in many other ways. This includes helping to address your estate planning needs, in conjunction with your lawyer. .

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

Welcome to the next in a series of videos featuring Integrity One staff members sharing stories of day to day experiences which may be of interest to you.

Today we hear from Integrity One Founder and Managing Director Darryn Borg who recounts a recent experience with clients concerned about the impact of downsizing his home home and impact on their aged pension

Click to watch Darryn’s story.

To speak to Darryn or another Integrity One staff member regard this or any other financial financial planning or accounting matter please call on –

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

If you’re experiencing financial difficulty – if you’ve taken some hard knocks – then you’ll know how quickly things can spiral. We look at five ways you can take charge.

Talk to a Financial Counsellor

There are government-funded financial counselling services available in every state and territory. They come under the umbrella of Financial Counselling Australia (FCA). Their motto is: “Without fees. Without bias. Without judging. We’re on your side.”

A financial counsellor will help you take stock of your financial situation and regroup. Their free, independent and confidential services might include:

• Help with spending plans.
• Mapping out sustainable repayment plans.
• Talking to your creditors.
• Looking into government assistance.

To find your nearest financial counselling service, go to the FCA website. You’ll find heaps of good info there, and they also have a freecall number—1800 007 007.

Contact your bank

Another site worth looking at is Doing it tough? (from the Australian Bankers Association). It notes: “The majority of customers don’t call their bank if they’re feeling like they’re losing control of their finances or experiencing financial difficulty. This is a mistake.”

The site has a wealth of resources. While it can be hard to make the call, you’ll usually find your bank will be receptive and reasonable.

They’ll look at your individual circumstances and work on a plan. It might be a short break from repayments. Or perhaps a debt consolidation loan (at lower interest). The important thing is to talk to someone before it’s too late.

Work out a spending plan

When you’re battling, it’s easy to let things slip-to spend money you don’t have.

Working out how much money is coming in—how much you’re spending, where it’s going, and what changes you may be able to make—can help you take charge of a situation. Take control back.

Set goals

Once you’ve sorted out your spending plan, you’ll be in a better place to set some realistic goals. This might be to pay down your credit card, personal loan, to save for a washing machine or build up an emergency fund for the future.

Setting goals, however humble, is satisfying.

Start saving

Once you’ve got a spending plan in place, set goals, and mapped out a financial plan, you can start saving. Most of us know the basic saving rules—how the secret is to make it a habit and start today (or tomorrow if you must). It’s true—a dollar here, a dollar there adds up: it’ll do wonders for your morale if you see your debts dropping, and your assets building.

We’re here to help

A financial adviser can provide you with advice to help you manage your debts efficiently. To find out more, contact us today.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

Welcome to the first of a series of videos featuring Integrity One staff members sharing stories of day to day experiences which may be of interest to you.

Today we hear from Tom Bailey – Financial Planner & Mortgage broker – who has a good news story involving a couple he helped with retirement planning.

Click to watch Tom’s story.

For more information regarding this story or any other financial planning matter please call on –

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

Integrity One Facebook

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

Everyone saves money differently. Some set aside a percentage of their pay regularly, others use lump sums from bonuses or tax refunds. The secret to reaching your savings goal is to choose the right account, understand how to use it and form a habit of saving regularly. Here are our tips to help you on your way.

1. HAVE A SAVINGS GOAL AND SPENDING PLAN

It’s much easier to be a good saver if you have some sort of goal in mind. Whether it’s a holiday, a house deposit or just saving for a rainy day, have an amount in mind.

To help you work out what that savings goal amount is, you should be realistic about what you can afford to save each week, fortnight or month. A well-considered spending plan will get you started on your savings path.

2. EARN YOUR BONUS INTEREST

Good savings habits can reward you with bonus interest on some accounts. Be disciplined and it will pay off in the long run by helping you save a little faster.

3. SET UP A REGULAR PAYMENT

Do you get your phone or power bill direct debited from your account? Well you can apply the same concept to your savings account. With a direct debit arrangement, each pay day you can make a regular automatic payment into your savings account.

4. COMPARE SAVINGS ACCOUNTS

You compare insurance and mobile phone plans for the best deals and options for your needs, the same should be done with your savings accounts.

How do you decide on a savings account? You need to think about your needs and whether you want access to your savings anytime, or if you’d prefer to have a longer-term savings plan.

Think about whether you want an ‘at call’ account to put your savings into or let it grow for a set term. An ‘at call’ account means you can access the money anytime without fees or economic cost, but you might lose bonus interest for any withdrawals you make.

A term deposit means you put your money away for a longer term (months or years) and receive a fixed interest rate. The interest rate is usually based on the amount and length of time you put the money away for. This is fine if you don’t need access to the money during the fixed term. If you need to withdraw the money before the fixed term is up, you may be charged additional costs.

5. TRACK YOUR SAVINGS GOAL

The final secret to successful saving is to keep track of your savings goal. This can help you keep focused by tracking how your savings are growing.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

“Don’t sail out farther than you can row back.” This Danish saying is sound advice for anyone thinking of borrowing to buy a home, particularly now that interest rates are low and house prices are generally rising.

According to a paper [1] for the Centre of Policy Development and University of Canberra, Australians have a tendency to be over-confident in our ability to repay loans. We also underestimate the likelihood of things potentially going wrong in our lives.

Have you ever heard yourself or someone else say “I’ll be able to repay my loan, provided I keep my job, don’t get sick and I’m not hit with any large unexpected bills”? Chances are you probably have. But things can and often do go wrong.
Causes of mortgage stress

A study [2] was completed for the Royal Melbourne Institute of Technology (RMIT), which looked at the specific triggers that have resulted in Australian households being unable to meet their mortgage repayments. Survey respondents were asked the initial causes and, if they changed, what the final causes were. They were also able to identify more than one cause. The graph below shows the results.

How to reduce stress

Like most things in life, it’s difficult to make borrowing a stress-free exercise, but there are a few things you can do to reduce the angst.

1.     Review Maximum Loan Amount Offered

Most financial institutions determine the maximum loan they will provide based on a multiple of your income and other factors. But if you borrow the maximum amount, you may find you are stretched from day one unless you are very disciplined with your spending. Therefore it is important to consider if the maximum offered is suitable to your circumstances.

2.     Build up a buffer

It’s a good idea to hold (or build up) a cash reserve in a mortgage offset account to provide a buffer that can be drawn upon to meet your loan repayments if you become ill or are off work for other reasons.

3.     Take out mortgage protection insurance

Many lenders offer insurance when you take out a home loan that covers the mortgage (often up to a specified amount and for a particular period of time) if you die, become disabled or your employment ends involuntarily.

4.     Take out personal insurances

While mortgage protection insurance can provide peace of mind for a limited time frame, other types of insurances should be considered. These include:

• Income Protection Insurance which can replace up to 75% of your income if you are unable to work due to illness or injury. This can ensure you are able to continue meeting the majority of your living expenses, not just your loan repayments.
• Critical Illness Insurance which can help you service or pay off your loan and meet a range of expenses in the event you suffer a specified illness, such as cancer or a heart attack.
• Total and Permanent Disability Insurance which can help you service or pay off your loan and provide an ongoing income if you become totally and permanently disabled.
• Life Insurance which can be used to service or pay off your loan and provide your family with an ongoing income if you pass away.

5.     Fix the interest rate

Fixing the interest rate on your home loan can provide protection against rising interest rates. The downside is there are often restrictions on making additional payments into a fixed rate loan, which would limit your capacity to build up a buffer. Many people find a combination of fixed and variable rate loans works best, as additional repayments can be made into the variable rate portion of the debt.

6.     Don’t add fuel to the fire

Over 40% of the people who completed the RMIT survey responded to the initial difficulty in meeting mortgage repayments by using credit cards more often than they normally would. Using debt to service debt is very likely to compound the problem.

7.     Seek advice

At the first sign of a problem, it’s essential to seek financial advice, as there may be a range of potentially viable options to explore. Better still, you may want to seek financial advice before you decide how much to borrow.

An adviser can help you assess your spending plan and determine your affordability level. They can help you to focus on other goals you may want to achieve in the short, medium and long term and the cash flow that may be required to meet them. They can also assess your insurance needs and advise you on a range of other financial matters.

Footnotes

1.      Source: Understanding human behaviour in financial decision making: Some insights from behavioural economics. Paper to accompany presentation to No Interest Loans Scheme Conference “Dignity in a Downturn” June 2009. Ian McAuley, Centre for Policy Development and University of Canberra.

2.      Source: Mortgage default in Australia: nature, causes and social and economic Impacts. Authored by Mike Berry, Tony Dalton and Anitra Nelson for the Australian Housing and Urban Research Institute, RMIT Research Centre, March 2010.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.