Last month the Australian Securities & Investments Commission released the results of research examining the quality of financial advice given to people planning for their retirement. The findings? While 58% of respondents received adequate advice, in over a third of cases advice given to clients by financial advisers was poor. Now that’s a sobering statistic.

And the Federal Government has just announced further changes to the rules for financial advisers (due to come into effect in 2013) that it says will eliminate current conflicts of interest, including banning commission payments and requiring clients to ‘opt in’ every two years if they want ongoing advice (changes welcomed by consumer advocacy group Choice).

So what does this mean for you? In the words of Johnny Howard: be alert, but not alarmed.

If you’re looking for financial advice it’s OK to be wary, but remember that there are many financial advisers out there who are committed to helping you secure your financial future. While they don’t have crystal balls, they are in a position to help you choose financial products that best suit your needs; the trick is in finding one that you can trust. If you’re on the hunt, here are some tips to help.

1. Educate yourself about your finances first, even if you do plan to see a financial adviser. That way, you’ll go in with your eyes open and you’ll better understand the financial options that are presented to you. There are plenty of great books on the market, including Money Makeover (shameless plug!) and financial websites with lots of information to get you thinking.

2. Don’t put it off—we know that the thought of talking to someone about your money is probably as about as appealing as a visit to the dentist, but the sooner you do something about sorting yourself out the less you’re going to have to worry about money in the future. It might be challenging to hear you’re going to need to pull your socks up investment-wise in order to avoid a retirement on the pension, but the younger you are when you do the less painless it’s going to be.

3. Until the new financial planning laws come into effect in 2013 you’re going to have to do a bit of research to find yourself a financial adviser who charges by fee instead of commission. Fee-for-service is often recommended as the smart way to go as you’re more likely to receive impartial financial advice and it could end up being a lot less expensive too (commission fees can really eat into your savings once your investment grows). Check out MoneySmart for tips on choosing a financial adviser. Ask your friends and family members if they have an adviser they can recommend. And your accountant or HR Manager at work might even be able to give you a few leads.

4. A good financial adviser won’t only talk to you about your goals and write up a personal financial plan, they’ll also be able to help you sort out income protection insurance and life insurance (if you need it). These products are notoriously convoluted and difficult to compare and a professional will help you to make sure you take out the right insurance to suit your needs.

If things are getting serious between you and your beloved and living together is on the cards, or if your money relationship with your partner leaves a bit to be desired, here are a few simple ideas to help keep you on the path to happily-ever-after.

1. While it might seem a little unromantic, the most valuable thing you can do with your money as a couple is to set up clear financial ground rules. Only then can you be confident you’re both working towards achieving the same vision. That doesn’t mean you can’t have your own separate goals and financial independence, it just means there’s a common understanding when it comes to the money you share.

2. The next step is to work out the nuts and bolts of your daily money management. Start by estimating your joint monthly household expenses, including rent, groceries and utility bills. Make sure you agree exactly which expenses are joint expenses—you might not be thrilled at the idea of paying for his computer gadgets and he’s unlikely to be impressed if you expect him to chip in for your facials (or vice-versa, no judgement here).

3. Next, decide how much you’ll each pay towards these joint expenses. You might decide 50/50 is the way to go, but you could also consider splitting it according to each partner’s ability to contribute, especially if one of you earns significantly more than the other. American financial guru Suze Orman recommends splitting expenses this way—here’s an example:

Michelle brings home $5,000 a month. She lives with her boyfriend Andrew, who brings home $3,000 a month. They calculate what percentage they should each contribute using the following steps.

1.     Add up all shared monthly expenses: $4,000 per month.

2.     Add up combined monthly take home pay: $8,000 ($5,000 from Michelle and $3,000 from Andrew).

3.     Work out the percentage of shared monthly expenses to combined monthly take-home-pay: $4,000 expenses to $8,000 take home pay = 50 per cent.

4.     Use this percentage to determine how much each partner contributes each month: Michelle pays $2,500 (50 per cent of her pay) and Andrew pays $1,500 (50 per cent of his pay).

4. Decide who’ll be responsible for paying the rent and bills every month, as well as where the money for this will come from. For example, would you consider setting up a joint bank account for your household expenses? If you do, you could each contribute an agreed amount from your individual account into the shared pool on a set date each month and then the bill-payer would be responsible for paying all bills from this account instead of their own.

5. Make a commitment to an open and honest money relationship. It’s hard enough when you’re just managing your own finances, but when you have to take into consideration someone else’s goals and habits on a daily basis it isn’t always easy. But if you’re both on the same page about your financial ground rules, you have solid systems in place that you’re both comfortable with, and you’re both committed to sticking to them, then that’s a fantastic start.

You’ll face more expensive living costs and you’ll need to be extra vigilant about saving for your future – check out the Association of Superannuation Funds of Australia’s Retirement Standard for information on living costs of singles versus couples.

However, there are some really terrific financial advantages to being single—you just need to embrace the power of one.

The world is your oyster

Relationship veterans know that it’s all about compromise. When you’re partnered up you have no choice but to consult at every turn and consider not just your own financial habits and goals but someone else’s too. Being single means you can focus on exactly what interests you, and you alone. If property is your bag then you can focus on property investment but if shares are your thing then that’s exactly what you can concentrate on, no questions asked.

Solo satisfaction

Do you remember the thrill you got the first time you saved for something and then bought it with your own hard earned cash? Imagine how empowered you’ll feel knowing that you’ve put yourself on the path to financial success. It’s true that doing it alone means you can’t rely on someone else to help you out and it may take you a little longer to reach your goals, but what a wonderful feeling knowing that you’re truly independent and making it on your own.

Time for action!

While you never know what great love adventure might be waiting around the corner, there’s no point in waiting around to start investing or to take your next financial step (like putting together a property buying plan). The time for action is now! If Prince Charming turns up, fantastic. But if he doesn’t (or if he turns out to be slightly less charming than anticipated) then you’ve given yourself the best chance of being financially free on your own.

While warm nights with a margarita in hand may be topmost of mind, there are a few simple things you can put in place beforehand to make sure your travels are as financially stress free as possible.

Standard holiday money advice aside (save like silly first, stick to your budget and make sure you’re insured), here are a few other tips to consider:

1. Bag a bargain

If you managed to get yourself organised months ago, you’ll be sitting pretty. But if you’re more a go-with-the-flow kind of girl, it pays to check out sites like wotif.com and lastminute.com.au that cater for last minute holidaymakers. On the flight front, don’t forget about using your frequent flyer points if you have any tucked away. You’ll get the best mileage using your points for international flights rather than on shorter domestic trips for which there are regularly great deals available.

2. Don’t sweat the dollar

Small increases or decreases in the value of the Australian dollar aren’t going to have that much of an impact on your spending power if you’re planning on travelling overseas, so don’t break a sweat every time you tune into the night’s finance report.

3. Do sweat the fees

What you should be mindful of is how much you’ll be charged by your bank every time you make a withdrawal from an ATM overseas or for every transaction you make on your credit card. Banks typically charge around $5 to $7 per overseas ATM withdrawal and up to $10 per credit card transaction plus they’ll charge you a conversion fee on top (of both).

4. Find the best card for you

It’s a good idea to check out the card comparisons on sites like Mozo and consider picking yourself up a credit card without fees, or even one with free travel insurance included in the deal. Just always be sure to check the conditions of the card and any extra offers very carefully.

5. Consider a prepaid travel card

Alternatively, you could consider taking out a prepaid travel card. For around $10 to $15 you can open an account and transfer foreign currency onto your card then and there at the day’s rate—great if the Aussie dollar is riding high and you’re keen to make the most of it. Your travel card then acts as a debit card at ATMs or when making purchases, and you get charged much lower fees. The other good thing about this type of card is that you can check to see how your balance is faring. It’s then easy to transfer money across from your everyday bank account whenever you want.

Wherever you end up spending your holidays this year, may money be the furthest thing from your mind. We hope you have an enjoyable and safe break and we look forward to seeing you in 2012!

Having recently returned from an overseas holiday with a bank balance in the black I realised how lucky I was to be in such a comfortable position. It also made me think about what a difference having even a little money behind us can make.

Money can magically whisk away at least some of our problems and can give us peace of mind … it’s hard to sleep well if our debt is growing and we have no idea how we’re going to pay it back. If it’s handled right, money can give us choices in life that we’d never have otherwise, from where we live to how often we can afford to take a holiday. Being smart with our finances also affords us the freedom to do what we really want to do—like staying in a rewarding but low-paying job, taking time out of the workplace to have children, or going back to full-time study. Best of all, if we ever do become one of the lucky ones with money to burn there are so many wonderful causes we could support.

Where to start? It’s pretty simply really.

1. Wipe your slate clean. The first and most important thing you can do is to get rid of any bad debt you may have accumulated (that is, money you’ve borrowed to buy things that depreciate—like most of the things you’ll purchase on your credit card). If you’re struggling or just don’t know where to start, speak to a licensed financial adviser as soon as possible.

2. Open an online savings account that offers a competitive interest rate and start saving—think about setting up direct debits from your everyday bank account to your online account straight after every pay, before you can be tempted to spend it. Try to save three months’ worth of living expenses—if you’re not sure how much to save write down everything you spend over a month to give yourself a realistic idea. Call this account something like ‘Emergency Fund’ and don’t touch it (except if there’s an emergency, obviously).

3. Keep going. Once you’ve completed steps one and two give yourself a pat on the back, but don’t stop there. It’s time to start investing, in whatever way appeals to you most. Managed funds are great for people just starting out or for those of us who are time-poor. Shares and property both make great investments over the long-term and you could very well pick up a bargain in either if you’re ready to invest anytime soon. Whatever you do, make a start now—we guarantee you’ll get a kick out of watching your money grow.

Nina  (one half of Moneygirl)

As of July this year, legislation was passed to remove low income tax offset eligibility for children. In simple-speak, unearned income (such as bank interest, dividends from shares or distributions from family trusts) over $416 per year in a child’s name will be taxed at 66 per cent.

For example, if your child had a bank account in their name earning 6% per annum, the balance of the account could get no higher than $6,930 before the interest earned would start to be taxed at 66%. We know—whoa. You can check out the various thresholds and exclusions here.

Previously, minors could earn up to $3,333 of unearned income before paying tax. The reason for the change: to prevent families from investing in their children’s names in order to avoid paying tax—commonly known as income splitting.

But never fear. There are still plenty of ways to help give the little people in your life a head start financially. It’s just a matter of a bit of research and being smart with your (and their) money.

Consider these three things:

1. Become besties with the tax man

The Australian Taxation Office’s website is, of course, the most trustworthy source of information; you can read about how children’s investments are taxed, be they savings accounts or shares.

2. Be clever with your money

There are plenty of clever ways to invest money for your children—one way you could consider reducing tax is to buy Australian shares paying franked dividends (keeping in mind that shares fluctuate in value so a long term view on your investment could be wise). Australian author Ashley Ormond’s book How to give your kids $1 million each has recently been revised and is worth checking out.

3. Apply the principles of smart investing

Investing for little people involves the same rules as if you were investing money for yourself. That is, setting out goals (and strategies to achieve them) that suit your time frame, risk profile and personal circumstances. However, an extra question you need to ask when investing for someone else is in whose name should the investment be held? As always, if you’re unsure your accountant or financial planner will be able to help you decide.

While the lower pay rises in this particular period are likely to reflect weak growth in the retail sector (which typically employs a high proportion of female workers) statistics like these are nothing new.

Historically, women have earned less than their male counterparts; indeed a NATSEM report released in 2010 found that women in Australia were paid an average of 17% less than men (that’s around $224 a week). And it isn’t just an Australian issue—it’s global.

One reason given by Time Magazine for the reason US women earn less than their male counterparts (77 cents to the male dollar in 2008) was that women tended to work in lower paying industries. For example, well-educated men tend to work as business executives, lawyers or doctors, whereas well-educated women typically gravitate towards teaching, caring and communications roles.

Other reasons cited by Reportage Online include under-representation in large firms and discontinuous employment (to raise children, for example) which can lead to lower wages or lack of promotional opportunities at crucial stages of their careers.

While the reasons could be debated endlessly, one thing remains certain—that as women we need to be smarter than ever with our money.

Three things to consider

1. Are you being paid what you’re worth?

It’s a good idea to know what your role is worth within the context of your industry and organisation. If you feel you’re earning less than you deserve, prepare your case and at an appropriate time (such as an annual review), summon up the courage to ask for a raise. Remember: nothing ventured, nothing gained.

2. Make your money work hard for you

With inflation doing its nasty little thing, you need to make sure you have a long-term investment strategy in place. To outperform inflation, your plan might be to invest for capital growth (in assets like shares or property that increase in value) or invest to create income (through share dividends or rental income from investment property, for example)—or both. Whatever the case, the most important thing is to do your research, seek independent advice and take action!

3. Remember your super

This is where the stats get really scary for women. Currently the average retirement payout for women is half that of men ($73,000 compared to $155,000)—and there’s a marked difference for younger age groups too. But don’t be alarmed, there is plenty you can do to sort out your super and the earlier you do it the better. Check out our super section to learn more.

In a nutshell, that the US has lost some of it’s financial street cred and is now considered a greater credit risk than Australia, Canada and France. While this is going to have a knock-on effect on our own economy (including the likelihood of a turbulent Australian sharemarket for some time to come), it’s your personal credit rating that you should be more worried about.

Everyone who’s had some kind of credit over the past seven years will have a credit file that contains information about them and their credit history, for example, if they’ve ever failed to pay a bill in their name or defaulted on a loan. And that’s what will determine whether or not their bank manager is happy to see them if they ever apply for a loan.

Credit reference agencies around the world record the credit history of potential borrowers and then sell the information to their customers, such as banks, who need to know a person’s credit history before offering them a loan, or utilities companies, before they set up an account.

It’s a good idea to check your credit rating every year or two, especially if you have any plans to take out a loan any time soon, just so you don’t get any nasty surprises.

Three things to consider

1. Check your credit rating at Checkmyfile by clicking on the option for a credit report from Dun and Bradstreet (an international credit reference agency)—note this service is free of charge for the first three months, and you can cancel after one month.

2. Read your credit report thoroughly to make sure the information is correct. Listings remain on your credit history for a long time—five to seven years—so it’s important they’ve got it right. If you believe that any listing is incorrect you can ask to have it changed (click here for tips on making sense of credit reports).

3. Keep yourself nice and vow to pay your bills, credit cards and any other debt on time, every time. If you ever find yourself struggling to cope, seek help straight away by visiting a licensed financial adviser—they’ll help you to avoid black marks on your record from now on.

Our Number One Investment-Hunk-of-Spunk Warren Buffett is a big fan. And quite frankly, if they’re good enough for one of the smartest investment gurus of our time, then they’re good enough for us.

How do index funds work? Just like a managed fund, investor’s money gets pooled into a fund which invests in a variety of Australian or international shares. However, unlike most managed funds, index funds aren’t actively managed by experts trying to pick and choose among all the different shares on offer. Instead, shares are automatically selected to match a given ‘index’ on the sharemarket.

So, let’s say you’re keen to invest in Australian shares, but don’t want the hassle of choosing them. If you invest $5,000 in Vanguard’s S&P/ASX 300 Index, your money will be spread into every share over the S&P/ASX 300 Index. If the index goes up, the value of your investment does too (and vice versa). You can check out historical Australian share returns here.

So what are the benefits?

• They’re much cheaper to manage than retail managed funds, which means much lower fees for you.
• They make diversification across the Australian share market easy—you are, in effect, buying into heaps of different companies at the one time. Good for the lazy share investor.

The downsides?

• You’ll need $5,000 to kick-start an investment (but can regularly invest as little as $100 after that).
• Like most share-based investments, index funds are subject to market fluctuations so you should take a long-term view. You wouldn’t want to be putting your holiday money in this puppy.

If our little outline has inspired you to learn more, check out Vanguard Investments. They are the major index manager in Australia. You might also like to learn more about Exchange Traded Funds (ETFs) which are a form of index fund at iShares—check out their Education Centre too.

But sacrificing of the salary kind doesn’t have to be all bad. In fact, salary sacrificing can be a really useful strategy to have as part of your smart money armour—especially with 30 June just around the corner.

While you can salary sacrifice a myriad of things (more about that later), most commonly it’s used in relation to superannuation. What does this mean? Well, in a nutshell, you arrange for your employer to regularly pay a percentage of your pre-tax income into your super account. Why would you do that? Because you’ll make tax savings as well as boost your super. To explain:

1. You’ll reduce your taxable income, so you pay less tax.

If that sounds confusing, we can assure you it’s really quite simple. In a case study on ASIC’s MoneySmart website, Candy, who earns $90,000 before super, decides to salary sacrifice $10,000 into her super (over a year). Her taxable income is reduced to $80,000 that year and this is taxed at her marginal tax rate, while the $10,000 that she salary sacrifices into her super is only taxed at 15%. This reduces the overall amount of tax she pays by $2,350 per year – check out all the details here (just scroll down the page).

This also makes good sense if your earnings are in a borderline tax bracket (marginal rates rise at $6,001, $37,001, $80,001 and $180,001)—by salary sacrificing you could reduce your overall earnings and place yourself in a lower tax bracket.

2. It’s forced saving – you don’t spend what you never see.

Salary sacrificing is probably the most effective way of whisking your money away before you can spend it—that makes it a great way to save.

If you’re liking the sound of all this and planning to go crazy, be warned—there are limits as to how much you can salary sacrifice into your super each year. If you’re under 50 you can contribute up to $25,000 (that includes your employer’s 9% contribution). If you’re over 50 you can contribute up to $50,000 (including your employer’s 9% contribution).

3. It’s not just about your super.

Some employers will also let you salary-sacrifice towards your higher education costs, laptop or vehicle purchases, even your children’s school fees (and more). Talk to your HR Manager to find out what deals they can offer you (Smartsalary is one just example, for employees working in certain industries).

For more information about superannuation you can check out our superannuation section, or to get down and dirty with the finer details go to the Australian Taxation Office website. And as always, see your trusty accountant (or find yourself one) if you have questions or are in need of advice.