Planning for the future: a guide for millennials

Planning for the future: A guide for millennials

MLC’s recent ‘Australia Today’ whitepaper revealed that a third of Australian parents believe their children (Gen Y’s and millennials) won’t be able to live the same lifestyle as them.

These are concerns frequently echoed in the media by young and old alike. Owning a home is becoming an impossible dream for some, while securing full time employment seems to slip further and further from the grasp of young Australians.

This is where planning for the future, both financially and in terms of long term lifestyle goals, becomes key. Being new to the workforce and receiving a regular pay check are the first steps to planning for the future that you want to have, but it’s not enough.

Earning money doesn’t automatically translate into accumulating enough wealth to lead the lifestyle that you want. This doesn’t mean flashy cars and clothes, this means having the luxury of choice when you need it. Things like taking time off work to have kids, going back to university or travelling to visit relatives are choices that some of us may wish to make in the future.

Without a solid financial plan, being able to have this flexibility may not be possible.  

Tom Davis ADFS (FP), Principal Adviser at MLC is passionate about holistic financial planning. He believes that for someone new in their financial journey, setting up for the future can begin with three simple steps.

Discovery

The first stage in this process is figuring out what is important to you now and in the future. This means asking yourself the tough questions says Davis.

“I’m talking the goals side here. It could be financial or career but generally speaking it comes back to family and lifestyle. Where do you want to live and what type of job do you want? Do you want to catch the train to work or drive? Do you want to be your own boss?” says Davis.

A good way of starting this process is asking yourself what are the three most important things to you now and then build a strategy towards those three things.

Seeking professional advice at this stage of the process can also help put you on track for future success.

“If you get the first part right and focus on things that are important to you, it’s much easier to make these things happen,” says Davis.

“The people who do really well have their goals and objectives front of mind and they are always taking one step at a time to achieve those goals.”

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Detail

This step is all about getting your head around exactly what comes in and what goes out of your bank account. These aren’t numbers that are necessarily easy to face up to, especially if you’ve let your spending go unchecked for many years.

Davis suggests using a software program to assist in this stage but avoiding ones that are too automated in terms of input, otherwise you won’t engage and create sustainable long term habits.

“If you don’t know what the numbers are, you just stick your head in the sand,” warns Davis.

“A lot of apps out there are too automated or not based on real numbers, and use hypothetical or best guest scenarios.”

This sort of imprecise record keeping prevents you from getting a good handle on detail so finding a tool to track spending that engages and supports your journey is essential to the process.

Vision

“It sounds a bit corny but having visibility is extremely important because sometimes if we don’t see our goal, it’s like it’s not there,” advises Davis.

Keeping on track with your vision can be harder than it seems once you get bogged down in everyday routine.

“The people who become quite wealthy, but also happy, are the ones who can look furthest into the future. The common traits that these people have are they make decisions based on what’s important to them. They don’t make flippant decisions based on what their neighbour or their brother or sister might think”

Some strategies Davis suggests for keeping goals front of mind include using a dream board as a visual representation and writing down your goals and reading through them every day.

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How do you open a bank account under 18?

If you’re under 18 and you want to open an Australian bank account, you will need your passport or birth certificate. (Some lenders might require just a Medicare card or driver’s licence.) You can apply online or at a branch. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

How do you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.

Can you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.

Can I link a bank account to Paypal?

Paypal is a safe and convenient way to pay online without the need to share your financial details. You can send and receive money or accept credit and debit cards as a seller using Paypal.

It’s easy to link your bank account to a Paypal account and start making transactions within minutes.

To start, you first need a Paypal account (it’s free to join). When setting up your Paypal account, you will be prompted to link a credit card or bank account (or both if you wish).

PayPal works without a balance; you can use Paypal to shop or send money when your balance is zero.

When your Paypal balance is zero, Paypal will ask you to choose your preferred payment method at the checkout.

This could be either your linked bank account or credit card. Your bank details can be updated if you change banks or credit cards.

What do I need to open a company bank account?

To open a company bank account, you will probably have to provide 100 points of ID, an ABN and an ACN. You will probably have to provide the details of all signatories as well.

Can British expats still open bank accounts?

As a British expat, you can open an Australian bank account, and you can apply for an account the same ways an Aussie would. You can even open an account online from the UK prior to relocating.

If you’re overseas, the bank you choose to open an account with may call you to provide you with our new account details beforehand. You can then have your ID verified within a branch once you’ve arrived.

And if you’re already living down under, the following list outlines the types of information required by most banks when opening an Australian bank account.

  • Australian residential address
  • Tax file number (TFN) or a TFN exemption
  • Identification (this can be your passport)

Can I open bank accounts for my children?

A common question for new parents is, ‘Can I open a bank account for my child?’

The short answer is yes – as a parent you can open a bank account for your child.

Once you’ve compared your options and found a bank account that suits your needs, the process is relatively simple.

As the bank account is for your child, you’ll need to provide some documentation such as proof of ID, including your tax file number.

You will also need a copy of your child’s birth certificate, and in some cases you may also need to sign a guarantee of indemnity.

Depending on the bank and whether you’re an existing customer, you may be able to open a bank account for your child online. However, you may still need to go into a branch to prove your identity.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

How can I close an ANZ Bank account from overseas?

There are two ways you can close your ANZ Bank account from overseas:

  • Call +64 4 472 7123 (toll charges apply)
  • Send a bank mail request via ANZ internet banking

How do I open a new bank account?

There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

  • A couple of forms of identification (such as driver’s licence, Medicare card, passport)
  • Tax file number
  • Residential address, contact phone number and email (though email is not essential)

How can I deposit cash into my bank account?

The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.