7 Tips to Help Your Kids Manage Money

Teaching your kids how to manage their money is an important skill that will help them through life.

Children need to understand that money is a limited resource and does not simply "grow on trees" or materialise from holes in the wall.

FIDO has compiled a list of 7 tips for parents to help their kids manage money and start their financial lives with good habits.

1. Encourage them to think about what they want, what they need, and to identify their savings goals.

2. Help them decide what they really want, and to focus on their most important goals.

3. Remind them to regularly set aside a specific amount of their pocket money towards the items they are saving for.

4. Help them to control impulse buying by reminding them of their savings goals when they get tempted to buy things that aren’t on the list.

5. Encourage them to put loose change into a savings jar at the end of each day and to use this little pot of ready cash to cover small personal expenses.

6. Tell them about lay-by and encourage them to use this an alternative to credit.

7. Use pre-paid cards for your children’s mobile phones and make your kids top up the card themselves if they spend them too fast.

Child Care Budget Changes #2

The second 2007-08 Budget initiative relating to child care comes in the form of changes to the way parents currently claim the child care tax rebate.

2. The Government will bring forward payment of the Child Care Tax Rebate (CCTR) and pay it through the Family Assistance Office (FAO) at the end of each financial year. This means eligible families will receive the rebate soon after the end of the financial year - a lot easier than the current way of having to wait and claim it the following year.

Who will benefit?

The change will benefit all working families who receive CCB for approved child care. These families will now be able to receive a payment equivalent to 30% of their out-of-pocket expenses up to $4,000 indexed per child per year for approved child care at an earlier time. The payments will begin from September 2007 for child care expenses incurred in the 2006-07 year.

Good News!

Families who incurred child care expenses in both the 2005-06 and 2006-07 years will receive two rebates in 2007-08, potentially totalling up to $8,000 (indexed) per child! The first rebate will be received as part of their tax assessment, while the second will be received as a direct payment from the FAO.

How do I get it?

For child care costs incurred in 2005-06 you still need to keep your paperwork and claim the Child Care Tax Rebate (CCTR) in your 2006-07 tax return. For child care costs incurred after 1 July 2006 the FAO will pay the CCTR directy into your bank account after you have lodged your tax return.

Child Care Budget Changes #1

According to the Family Assistance Office, a number of the 2007-08 budget initiatives will impact Centrelink and FAO customers.

Two significant changes have been announced in regard to child care. They are both good news for parents.

1. The rate of Child Care Benefit (CCB) will be increased by 10 per cent, on top of the normal CPI increase. As a result of these changes on 1 July 2007 families will receive a total CCB increase of more than 13%. What does that mean in your world? It means up to an extra $20.50 per child per week, for one child in full time care (5 days per week) for low income families.

Who will benefit?

All families who are currently receiving CCB and those who are eligible for CCB in the future will benefit from the additional financial support provided through the CCB changes.

How do I get it?

You don't need to do anything to receive the CCB increase. The Family Assistance Offcie will automatically adjust your entitlement. If you have chosen to receive your payment as a lump sum, it will be paid after you have complete your tax return at the end of the financial year.

More Personal Tax Cuts

According to Budget 2007-08, all taxpayers will benefit from from a further $31.5 billion in tax cuts over the next four years.

Highlights include:

1. From 1 July 2007, the low income tax offset will increase to $750 per year and the 30 per cent threshold will rise from $25,000 to $30,000.




2. From 1 July 2008, the 40 per cent threshold will increase to $80,000 and the 45 per cent threshold will increase to $180,000.

That's great news for next year but what about this tax season? Well, thanks to the May 2006 budget, it's still good news for low income earners.

More taxpayers are likely to qualify for the Low Income Tax Offset (LITO) this year as a result of the offset increasing from $235 to $600 and not starting to phase out until $25,000. So what does that mean for you? It means a reduced offset may be possible up to a taxable income of $40,000.

Cash Bonus for Senior Australians

On Tuesday, 8 May 2007 the Commonwealth Government announced details of the Budget for 2007-08.

One-off $500 Payment

• A non taxable one-off payment of $500 will be paid by 30 June 2007 to each person of age pension age eligible for Utilities Allowance as at 8 May 2007.
  


• A payment of $500 will also be paid to each self-funded retiree eligible for the Seniors Concession Allowance as at 8 May 2007.
  
  
• In addition, a one-off payment of $500 will be made to each person eligible for Mature Age Allowance, Partner Allowance and Widow Allowance as at 8 May 2007.

What are the Dollars & Sense Blogs all about?

Well, I am glad that you asked.

After designing, printing and posting client newsletters the other day, I was struck by the "light bulb" idea to begin blogging. It's a quick and effective way to communicate and offers so much more possibility than quarterly snail mail.

Alan and I see our role as more than a one-off tax season service for our individual clients. We are your accountants every day of the year. Unfortunately, it is often difficult to build upon that relationship and extend service throughout the year because most of our individual clients only phone in around July... even later if they aren't expecting a refund.

So, I asked around to discover what it is people really want to know and services they wished their accountant provided. As it turns out, there is a whole LOT... more than enough to justify regular blog updates.

Many of you face issues on a daily basis dealing with various government departments, understanding and claiming ever-changing entitlements, sorting out a household budget, knowing what records to keep, making sense of tax jargon, getting out of debt, contemplating home-businesses or getting back into the workforce once the kids are at school. Phew! It's no wonder we are all stressed these days.

As a family with three young children ourselves, we understand the frustration.

The aim of the Dollars & Sense blog for Individuals is to provide you with relevant information and tips so that you can stay informed and on top of nitty-gritty household management.

While I am beginning the blog with local families and clients in mind, most of the information and resources will be relevant to any Australian household.

You can expect articles, news, reviews, hints, tips, lessons and links covering everything outlined above from claiming tax rebates to cutting the grocery bill.

I'll be maintaining the "Individuals" blog and adding postings on a regular basis. Content will be guided by your feedback so don't be shy about making suggestions or offerring your comments.

We are also establishing the Dollars and Sense for Small Business blog with similar aims as an additional service to our business clients and anyone else who is interested.

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Christie Lewis is a business partner with Alan Lewis Accounting & Taxation Services. Located on the NSW Central Coast. More than just a tax time necessity... we remain at your service for the entire year. Visit us online today at www.lewistaxation.com.au

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