We’ve provided a fictional example based on a situation that many couples will identify with:
Names: Chris & Anna Smith
Age: 37 & 32
Children: Ben age 1 and Bianca age 3
Chris’s occupation: Solutions Architect
Anna’s occupation: Part time student and full-time mother
Chris’ salary: $160,000 Plus Super Guarantee of 9.5%
Current savings: $50,000
Marital status: Married
Key Goal: Second home purchase – $900,000
Chris and Anna feel they have outgrown their current apartment and would like to have a backyard for the children to play in and also cultivate a small veggie patch.
During discussions with family and friends they have all confirmed that this is the way to make the second purchase, by using the equity in the current home to buy a bigger place and retain this one as an investment property. However, as they are unable to accurately determine their cashflow surplus every month they are undecided on whether they can afford to retain the current unit as an investment property.
They have been putting their excess cash in the home offset and the current balance is $50,000
As part of this, they need to answer the ‘where does all of my money go’ question.
Chris & Anna start using MyVAULT! After a short sign-on process their financial world is summarised on one page. They have the previous 12 months of transactions automatically downloaded and categorised.
Spending some time reviewing the past 12 months allows the Smith’s to highlight some areas for improvement:
- They commit to a reduction of $60 per week from their ‘eating out’ budget.
- They change their utilities provider and get a 30% discount by paying in time every quarter reducing this expense by $60 per quarter
- They determine that if they plan ahead Chris could take public transport on the certain days so that Anna does not have to use Uber on days that she does not have the car
- Chris decides to get his salary paid into his mortgage offset account and transfers their fixed expenses on a fortnightly basis into their regular bank account so that all excess cash is left in the mortgage offset
In completing several small changes to their monthly expenditure and restructuring their regular expenses Chris & Anna can add $490 per month to their savings, without making big sacrifices to their everyday life.
After adding a ‘second home purchase’ goal in MyVAULT Chris & Anna understand that they are comfortable in having a chat with a mortgage broker as they have a firm understanding of their finances.
Monthly Expenses
| Automotive Expenses | $350.00 |
| Charitable Giving | $100.00 |
| Clothing/shoes | $250.00 |
| Entertainment | $300.00 |
| General Merchandise | $500.00 |
| Gifts | $200.00 |
| Groceries | $1,200.00 |
| Healthcare/Medical | $300.00 |
| Hobbies | $200.00 |
| Online Services | $100.00 |
| Personal Care | $200.00 |
| Restaurants/Dining | $700.00 |
| Service Charges/Fees | $120.00 |
| Telephone Services | $150.00 |
| Utilities | $140.00 |
| Total | $4,810.00 |
After speaking with several experts and playing with their budget in MyVAULT, Chris & Anna have a greater understanding of their options:
- Chris & Anna have added an extra $5,880 on an annual basis to their savings buffer
- This exercise enabled them to see the value in budgeting and are now tempted to set a holiday goal and save towards it rather than just dipping into the offset
- Chris & Anna would be more comfortable if the unit remained positively geared or close to neutral so that they can continue their savings plan
- Chris & Anna may consider setting goals for the children to help with birthday party expenses and birthday gifts as this app makes it visually appealing versus entering data into a spreadsheet
MyVAULT provides you with the knowledge you need to make financial decisions that activate your prosperity. To speak with a member of the MyVAULT team contact us on 1300 925 081 or simply navigate to the MyVAULT page, sign up and start making the changes today that will create the future you want.
