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Debt is needed in many circumstances to help us get the things that we want and need today. However if we aren’t careful our debt can get on top of us and life can get tough.

Case Study

Clients in their early 30’s married and recently started a family. When this happened mum took time off to look after the new baby and this is when things changed. The household went from two parents both producing good incomes with no kids to one income, one stay at home parent and one dependent.

The client’s goals didn’t change but their ability to fund them did. As a result the clients had to occasionally rely on credit cards to meet household expenses and the overtime credit cards got too big.

Goals

  • Pay out short term debt (credit cards)
  • Pay out mortgage over next 20 years
  • Regular annual family holidays
  • Provide for family (Create wealth and get ahead)
  • Protect family. (Make sure if anything happens the house is paid off and the kid(s) are looked after)

How Did Elliot Help?

Elliot worked with the clients to establish their priorities and a plan of attack. We first focused on the household budget confirming where all the money was going after it came in. When we were clear we directed our attention to the credit cards so we could get on top of the situation and stop the downward spiral of growing debt and interest.

As the clients owned a property with a mortgage this provided us with strategy options to get on top of the short term debt. We made some changes which freed up cashflow and that gave them the breathing room they required.

Once the debt was under control and the credit cards finalised we directed our attention to the families other goals which included regular holidays. We also allocated money to a future fund for the child so that when they turn 18 and finish high school there is money available to support with higher education.

We established a wealth protection plan (life, total and permanent disability, income protection and trauma) to protect the family and we utilised superannuation where we could to pay the premiums to avoid impacting the household budget.

Value of Advice

By doing a household budget we were able to identify savings and make wiser decisions about where their money was spent.

By prioritising short term debt we were able to minimise interest expenses and pay more money off the principle.

Once on top of the debt the clients were able to allocate funding for annual family holidays and spend quality time together without having to stress about money.

We were also able to put aside funds for the future so that money will be available to support University, Tafe, a first car, an overseas holiday or a house deposit for the child.

By implementing a wealth protection plan this has provided a sense of security knowing that if either of them ever suffer a major sickness or accident there will be funding available to meet medical costs, replace lost income and payout the mortgage and most importantly look after their family. We also funded the cover through superannuation which provided tax benefits and didn’t impact on the family’s household budget.

Testimonial

“We now have a plan to take control of future get out of the debt which was controlling our lives. We didn’t think things would improve so quickly we thought it would take us years. Elliot was fantastic and our family’s future is looking great.”

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