Week #12

Your Money Your Structure

Overview of Week #12

How did you go? Objective of Module #12 - Your Money Your Structure Create an Easy to Manage Structure Purpose of a simple structure Principals for your simple and elegant structure Example of a simple structure Self Assessment Money Management Savings & Debt Planning for the Unexpected How Super is your Super? Investments Retirement and Estate Planning Creating Habits to Support You Daily Weekly Monthly Annually Your Journey

A woman's best protection is a little money of her own. - Clare Boothe Luce

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure

How did you go?

Exercise #1 - How did you go with implementing any commitments that you wrote down in the last module regarding your money and your emotions?

Exercise #2 - How do you feel about the actions you took? How do you feel about the actions you didnt take (if applicable)?

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure

Objective of Module #12 - Your Money Your Structure

The objective of module #12 - Your Money Your Structure is to show you how to create a simple and easy to manage structure to master your money, your financial plan and your future. We look at the purpose of a simple structure, the principals for creating a simple and elegant structure as well as provide an example of a simple structure. The module also contains an important self assessment which allows you to consider all the areas of finances that are included in the traditional financial planning process. You will have a chance to consider important questions about your money management, savings and debt, planning for the unexpected, superannuation, investments as well as retirement and estate planning. Each of the sections in the self assessment also includes more context about why this area of personal finance is important as well as some tips to help you with it. You are also encouraged to consider what you want to create in the next 12 months and what habits you will need to set in place to support that. Suggestions for creating your daily, weekly, monthly and annual habits are included. The final section of this module is about reflecting back at where you started at the beginning of this Her Money Her Purpose program and an invitation to anchor and celebrate the positive changes. Whats the point???

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure

Create an Easy to Manage Structure

Sometimes the struggle can be in the structure, or lack thereof. You may be resistant to track every dollar the comes in and out of your bank account. This may seem too tedious to keep up on a continual basis and may not be necessary in the long run. But I highly recommend it in the short term especially if you are spending more than you earn, not sure where your money is going or struggling to save. I also recommend a simple structure. Purpose of a simple structure Creating and maintaining a simple structure for your cash flow, combined with good money management habits, will allow you to: - Easily remember where your income is going. - Easily remember where your expenses have been paid from and easily check if something has been paid. - Ensure there is money available to cover your bills & expenses. - Keep up with your debt repayments. - Keep up with your savings and investment plan. - Reduce stress and worry and increase empowerment. Principals for your simple and elegant structure In structuring your basic finances: - K.I.S.S. (keep it simple silly). - Make sure your required spending is covered. - Make sure to allocate funds to savings and debt repayment. - Make sure to have a buffer in place to allow for fluctuation from month to month. - Make sure to build in an allowance for fun money. - Review regularly to make sure it is staying on track.
Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
Example of a simple structure A simple structure may look like this.

It is all about knowing where your money is going and why. Exercise #3 - Is your structure more complicated than this? In what ways might you make it more simple?

Self Assessment
Exercise #4 - Financial Health Check - Practical Aspects Money Management #
1 2 3

Question
Do you spend less than you earn? Do you know your real hourly rate (after tax, expenses, etc)? Do you regularly save at least 10% of your after tax income?

Answer
Y/N/Not Sure Y/N/Not Sure Y/N/Not Sure

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
4 How would you rate your money management (otherwise referred to as budgeting) on a scale of 1-10? (1 being terrible and 10 being excellent) Do you know where your money is going by keeping track of your income and expenses? Y/N/Not Sure Y/N/Not Sure

6 Do you have access to six months living expenses and debt repayment in savings or mortgage offset/redraw?

Why is this important? To sustainably build wealth and not go backwards you need to be spending less than you earn. Dont be too rigid, sometimes we will spend more than we earn, for example going back to school, travel, starting a business, or starting a family. Knowing your real hourly rate allows you to make empowered buying decisions. Refer to Module #4 - Your Money Your Mindset. Having access to six months living expenses and debt repayment means you have a cushion in case your income is interrupted. This gives you flexibility and breathing room. Tips: - Keep track of your income and expenses & reduce your spending if required. - Utilise the Money Harmony Journal to get conscious about why you are driven to spend on certain things. - Calculate and be aware of your real hourly rate. For more info refer to Module # - Set a goal to save at least 10% of what you earn, make your first goal to get your six months expenses saved. - Motivate yourself by getting clearer on what you are saving for (refer Module #1 - Your Money Your Clarity).

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
Savings & Debt #
7

Question

Answer
Y/N/Not Sure

Are your cash savings in a high interest, low or no fee bank account or in your mortgage (offset) account?

8 Do you have bad debt? i.e. personal loans, car loans, credit Y/N/Not Sure card debt or other consumer finance? 9 Are you sure your mortgage is cost competitive and structured to be paid off in the least amount of time? 10 Do you ever get behind on your bill or loan repayments? Y/N/Not Sure Y/N/Not Sure

11 Do you read and understand your bank and loan statements? Y/N/Not Sure

Why is this important? Holding your savings in your mortgage or offset account maximises the interest and minimise the tax. Interest on debts like mortgages for your own home, personal loans and consumer finance are generally not tax deductible. Interest on mortgages tend to be less expensive than other loans. Getting behind on payments, even for phone or utility accounts, can impact your credit rating and your eligibility for loans. Tips: - Review your bank accounts online, try comparison websites like www.ratecity.com.au - Reduce your personal loans and consumer finance, pay off your highest interest rate debts first but be aware of early repayments penalties. - Speak to a mortgage broker and your bank to see if you can get a better deal. Dont be afraid to ask for the best deal and shop around. - Dont be shy to ask your bank to explain to you your statements and your fees and charges. You are paying them and have the right to know. Wealth is what you have left when you loose all your money. - Bruce Muzik

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
Planning for the Unexpected # Question
12 Are your home, contents and cars insured? 13 Do you have sufficient insurance for temporary or permanent disability? 14 Do you have sufficient insurance in case of death? 15 Do you read and understand your insurance policies?

Answer
Y/N/Not Sure Y/N/Not Sure Y/N/Not Sure Y/N/Not Sure

Why is this important? If you are not insured for the full value of your personal property you could be out of pocket in the event of a claim. Only 50% of Australian women have life insurance, mainly in their superannuation and it is often insufficient. The figures are even worse for disability cover. This could spell financial disaster for the women and their families. It is important to know what your insurance protection covers including any exclusions, excesses, etc. You may be paying for multiple insurances (and you cant always make multiple claims!). Tips: - Review the amount of your cover regularly and make sure it is realistic to your needs. - Review your insurance needs. If the cost or your cash-flow is a big issue look at increasing you insurance in your super. - If you dont understand your policies ask questions to the insurance policy providers. How Super is your Super? # Question
16 Do you know where your superannuation is and how it is invested? 17 Do you hold multiple superannuation accounts?

Answer
Y/N/Not Sure Y/N/Not Sure

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
18 Do you know what the fees are in your superannuation fund(s)? 19 Can you read and understand your superannuation statement? Do you understand superannuation tax, preservation and contributions limits? Y/N/Not Sure Y/N/Not Sure

Why is this important? Your superannuation investment options will make a big difference to your balance at retirement. Superannuation is a powerful structure for saving for your retirement because of the tax concessions, however you generally cannot access it until you meet a condition of release and there are limits on how much you can put in. Your superannuation balance may be eaten away by fees, many funds charge minimum account keeping fees. Tips - If you have multiple superannuation accounts use Australian Taxation Office (ATO) Super Seeker Software or call the ATO to track them down. - Be sure to read your superannuation statements and call you fund and ask questions is you are unsure. - Consider diversification (not putting all your eggs into one investment basket) within your superannuation fund to lower risk. - Do research and/or get advice before making superannuation investments. Investments #

Question

Answer
Y/N/Not Sure Y/N/Not Sure Y/N/Not Sure

20 Do you have or want to have any non-superannuation investments? 21 If you answered yes to question 20, do you fully understand the risks involved with these investments? 22 If you answered yes to question 20, can you calculate the real after tax rate of return? Do you understand compound interest? 23 Do you understand your risk tolerance?

Y/N/Not Sure

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
Why is this important? If you dont understand the risks of your current or proposed investments. You may be taking on more risk than you are comfortable with. Your risk profile also depends on how long you want to be invested. Tips - Do research and/or get advice before making investments. - Consider diversification (not putting all your eggs into one investment basket) to reduce risk. - Refer to moneysmart.gov.au for more info on risk tolerance and investment timeframes. Retirement and Estate Planning # Question
24 Do you have an estate plan in place? In other words do you know what will happen to your assets and personal property in the event of your death? 25 Do you have a record/snapshot of your personal net worth? 26 Do you have an estimate of how much you would need to sustain your current lifestyle if you were to leave work?

Answer
Y/N/Not Sure

Y/N/Not Sure Y/N/Not Sure

Why is this important? The public trustee will take a portion of your estate, if you dont have a Will, this means those who survive you will get less and generally it will take longer. Your estate may not be paid to who you want it paid to if you dont have a Will. Also, your children and dependents will not have legal guardians appointed. Also, it is highly compassionate to have your final wishes stated so that your family need not have to guess at a time when they are grieving. Questions 25 and 26 relate to when you will be able to retire if you choose to. Also relates to your insurance requirements. It is helpful to know where you want to get to financially and where you are at on your journey.
Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
Tips - Do research, get advice, and have a Will legally drafted. This is one expense you can justify the value of. - Start by looking at where you are now and have a good think about where you want to get to. - Have a play with ASICS retirement planning calculator on the Money Smart website (moneysmart.gov.au) Money is something youve got to make in case you dont die. - Max Asnas Exercise #5 - After completing the self assessment, which areas of your practical personal finances do you believe need the most attention right now?

Creating Habits to Support You

We have covered a lot of ground in this Her Money Her Purpose program. From getting clear on what you want in life and how your money can support it, to getting in touch with your life purpose and personal presence, shifting your mindset around money, managing your figures, bringing more awareness to your money decisions and values. We also looked at stepping more fully into your power, valuing yourself and opening to more receiving, learning to embrace your money shadow, discovering how money impacts your relationships, transforming your feelings and emotions about money all the way to this module about the big picture and structure.

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
No doubt many ideas and insights about how to improve your life have come up. I encourage you now to take a little time, as much as you need, to really consider what are the most important things that you want to focus on. As we cant focus on everything at once what you would be most beneficial for you to focus on in the next year? Note: as humans it is easy to overestimate what we can do in a day and underestimate what we can do in a year. Will you allow yourself to dream a little bigger for the next year? Exercise #6 - What is the one or more areas of your life (aside from finances) that you want to focus on improving over the next 12 months? What do you want to create in this area and how will you know when you have done that?

Exercise #7 - What is the one financial area you will focus on improving in the next 12 months? What do you want to create in this area and how will you know when you have done that?

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
Daily There are certain things we can do everyday that keep life flowing well. It is not about being so rigid that we feel we must do it everyday or that we beat ourselves up if we miss a day. It is about getting into a flow so that things happen, seemingly on their own, by habit, and this stops things from piling up. Daily financial habits may include things like opening the mail and keeping it organised as it comes through the post box, checking to make sure everyone has lunch money and train fare, filing receipts, etc. Daily personal habits may include allowing moments for silence and stillness each day, making sure to eat well, daily exercise, or setting up a morning practice (refer to Module #3 - Your Money Your Presence for more about morning practice). Exercise #8 - What habits can you create each (or most) days to support the movement towards what you are creating?

Weekly There are certain things we may only need to think about once per week to keep life flowing well. Weekly financial habits may include, paying any bills that have come due and noting what bills are coming up, tracking your expenses and incomings (see Module #5 - Your Money Your Numbers), withdrawing cash and paying everyone (including yourself) their allowance for the week.
Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
Weekly personal habits may include setting aside time for study or self improvement, creativity time to nurture your soul, time out in a bath or in nature, weekly planning/visioning, weekly date with you (refer to Module #3 Your Money Your Presence). Exercise #9 - What habits can you create each (or most) weeks to support the movement towards what you are creating?

Monthly There are certain things we may only need to think about once per month to keep life flowing well. Monthly financial habits may include reviewing your incomings and outgoings for the month and tracking them to annual goals, adjusting your financial freedom plan (see Module #5 - Your Money Your Numbers), reviewing and planning for any upcoming non regular expenses. Monthly personal habits may include planning/visioning for the month. Exercise #10 - What habits can you create each (or most) months to support the movement towards what you are creating?

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
Annually There are certain things we may only need to think about once per year to keep life flowing well. Annual financial habits may include reviewing your loans and bank accounts to make sure they are structured well and cost effective, reviewing superannuation and insurance policies, annual financial planning and tracking to a long term plan, setting your financial freedom plan for the coming year, reviewing annual expenses and including them in your plan, setting savings and debt repayment goals, etc. Annual personal habits may include planning and visioning for the year, deciding what you want to focus on for the coming year (what areas of life are important), looking at when you may like to take holidays this year and where you might like to go, etc. Exercise #11 - What habits can you create that you will do annually to support the movement towards what you are creating?

Exercise #12 - How can you remind and motivate yourself to follow through with creating these daily, weekly, monthly and annual habits?

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure

Your Journey
Exercise 13 - Take time now to reflect on where you were when you started this journey in the Her Money Her Purpose program.

Exercise 14 - Take time now to reflect on how things have changed for you in the last 12 weeks since you started the Her Money Her Purpose program (or the amount of time it has taken you to reach and complete this module).

Heres another box because you are awesome!

Copyright 2013 Susan Broughton, Journey to Abundance

Week #12
Your Money Your Structure
Exercise 15 - How can you mark, anchor and celebrate the positive changes you have made?

Caution!! Do not skip this step. Celebrating your success, even what
you think may be a small success is worthy of your celebration!!!

Once again I would like to thank and honour you for trusting me and yourself to complete this program. If there is anything I can do to support you further please let me know. To your happiness and harmony, Susan

Copyright 2013 Susan Broughton, Journey to Abundance