The Cash Flow Challenge

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1 A financial surplus is the absolute foundation of financial peace of mind. The power of a surplus and the sense of security it brings will surprise and delight you! By taking every opportunity to save, spend less or spend more wisely, you have the potential to save that all important financial surplus and begin worrying less about money! The Cash Flow Challenge is designed to help you make better financial choices every day, to help you live within your means and to help you develop healthy financial habits to share with your children and family. The key to successfully saving money and spending less is to do so without dramatically changing or deteriorating your lifestyle. You still need to enjoy life! This challenge is designed to get you to sit down and firstly analyse where your money is going now and the changes you need to make to help give you that all important surplus intern giving you peace of mind and comfort with your finances going forward. Before you start the cash flow management worksheet make sure you read our free cash flow management document, this document will help give you ideas on how to introduce small changes without dramatically affecting your lifestyle although can add up to significant savings. Four important Principles to remember 1. Pay yourself First 2. Live below your Means 3. Make your money work for you 4. Insure Things

2 One of the keys to Saving, is to regularly review ongoing expenses. Review everything you regularly spend money on and you are sure to find areas in which you can cut back without impacting too greatly on your overall lifestyle. Seriously consider if something is really critical to you or if in fact you could do without it and save. Alternatively, you may have direct debits set up, through your credit card or savings account, you may not even realize you are still paying for. There may be significant savings to be made by simply reviewing these expenditures on a regular basis, to see if they are still applicable, or whether some of these items may be available at a cheaper price elsewhere. To assist with the review, you will need to have a bank statement showing your last two months transactions, collect all your bills you have paid for the last 2 months. Once you have these documents you will need to complete the cash flow management worksheet. This worksheet will become your review tool going forward so please save it to your computer and make sure you review and update this document every month for 6 months until you feel you have it as accurate as possible. After the first six months this document should continue being reviewed on a regular basis to make sure you are heading in a positive cash flow position, as well it is important to review this document at any stage of your life when you are considering any big purchase or any financial changes that may in pact on your savings. When making decisions you want to make sure you are always running a positive cash flow. With the cash flow management worksheet please look to drill down to a weekly budget. You will notice on the worksheet that we are looking to separate your money into fixed living Expenses, discretional spending, Holidays & savings, clothing and gifts. The idea here is to provision your money into different categories so you know that you will have money there and ready for when that particular expense comes in.

3 When completing the cash flow management worksheet please understand that life is to be enjoyed. While you may not be able to afford it too often, it s important to enjoy a special treat for yourself and/or the family from time to time. That might be an upcoming event, something new for the home or a holiday away. I cannot stress it enough to have regular amount allocated for savings in your budget. This Cash Flow management program is not designed to have you leading a Spartan life that you won t enjoy, so here are a few tips to make sure that you can stay on track. Tip 1: Physically set the cash aside If you have trouble running your budget by leaving money in your bank account, use labelled envelopes to physically store the cash for your expenses. Insert the cash each week or month so that when the time comes to pay your bills you know the money is available. This isn t a good idea if you think having the cash on hand is too great a temptation! Tip 2: Remember it s ok to be flexible If you are out of money for groceries but your surplus is intact, decide what is more important for you this week. You can be flexible. If you have enough food in the pantry and freezer to get you through the week, then avoid the grocery store and keep your cash reserve full. If you really can t feed your family without purchasing some more food, use a little of your reserved cash and don t be hard on yourself for doing so. Tip 3: Review and evaluate If you find yourself short on the cash you need, look back over your spending and figure out how the shortage occurred. Did you make an extra purchase over the weekend or spend all your money on stuff you don t need? Or is your budget simply not suited to what you really need? No budget is set in concrete so review it! See how you can reduce your bills and tweak your expenses so you can work with the money you have.

4 Tip 4: Keep trying and ask for help If you find sticking to your budget impossible, don t give up! You just need to try different approaches to managing your finances. Whatever you do, keep at it. Never be afraid to ask for help. Your Allstar Wealth Adviser will be able to give you very valuable ideas to help you find a system that works and that you re comfortable using. By now you should have completed the cash flow management worksheet and hopefully you have managed to find a surplus and allowed a comfortable amount to put toward savings that won t affect the weekly cash flow plan. As previously mentioned you will see that we have separated your monies to fixed, discretionary, holiday, savings, gifts and clothing. Its time now to open an account for each group with your bank making sure your bank has no charges for these accounts, if they do its time to change banks and go with a bank with no charges. Also its handy to also nickname your accounts to the purpose they are used for. I truly believe by separated your money into these groups will give you a better understanding of what monies are required for each expense as well give you a visual picture of what impact it could make if you don t have enough money their when a particular expense occurs. I believe you should use technology to its advantage and organize the required weekly funds for each account to be transferred automatically on a weekly basis.

5 Your Income - This will come from employment & Investment Income, have this money transferred to your bills account. If you have a mortgage it would be advantages to have the bills account as an Offset Account. Speak to a Allstar Wealth Advisor if you don t have an Offset account or don t quite understand what this type of account is Home Loan Account If you have a home loan Look to pay mortgage payments from Bills account on a weekly basis. Make sure you ask a Allstar Finance Advisor to complete a free review of your current mortgage structure and interest rate to make sure you are maximising the savings that could be had by having a competitive structure. Fixed Bills Account - All fixed bills like mortgages, saving, utility bills etc. come from this account. If you are disciplined pay bills from Rewards Programmed credit card, then pay credit card off either weekly or monthly. Discretionary Spending account - Is for your weekly spending like food, entertainment, petrol, Foxtel etc. This should be the first area you would look adjust your spending habits if at any time you looked like running short in the other areas of your budget. Other Accounts: Gifts, Holidays and Clothing accounts you may choose to set up separately so you have a better understanding of your position when you have the need to spend in these area s Sinking fund - Investment "Save First" - This account is to help gain stability, have a weekly sum come from bills account. We are ultimately trying to achieve an amount equal to three months fixed & discretional expenditure. This will help secure your financial future in the event you fell sick, had an accident or lost your job for a period of time and your income diminished. In relation to this area it would be advisable to speak with a Allstar wealth advisor to what type of account you should place your money as well if you had an accident or fell sick for a lengthy period of time you ultimately should consider insuring your income through income protection.

6 Aspirational Investments This account is for your goals and dreams. I believe this account should be set up once you have achieved a comfortable balance in your sinking fund. You might like to investment this money in shares, managed funds, property etc. A Allstar Wealth advisor may be able to assist you here. Superannuation - Always think of tomorrow with a strong Retirement Plan. Contributions to come from employer either as sacrificed contributions or after tax contributions dependent on your taxable income. When closer to retirement we may look at a Transition to retirement plan. An Allstar Wealth Advisor can assist you here. Some Quotes to Remember "Remember nobody can go back and start a new beginning, but you can certainly start today to make a new ending" Maria Robinson "Obstacles are those frightful things you see when you take your eyes off your goal" Henry Ford "Create the highest grandest vision possible for life, because you become what you believe" Oprah Winfrey "Good Debt is a powerful Tool, but bad debt can kill you" Robert Kiyosaki

7 DISCLAIMERS This document has been prepared by Allstar Finance ABN , based on its understanding of current regulatory requirements and laws as at 7 September While all care has been taken in the preparation of this document [using sources believed to be reliable and accurate], to the maximum extent permitted by law, no person including Allstar Finance, Allstar Wealth and Allstar Business, accepts responsibility for any loss suffered by any person arising from reliance on this information. Allstar Finance, Allstar Wealth & Allstar Business trade under the corporate company Roblee Investments Pty Ltd of which Roblee Investments who holds an Australian Credit License [No: ] as well as Roblee Investments trading as Allstar Wealth is a Sub Authorised rep [No: ] who also is a corporate representative [No: ] of Wealth Today who holds an Australian Financial Services License [No: ]. Address Carrington Street Adelaide SA Phone: Fax: ABN: This document does not take into account any person s individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) before making any investment decision and consider talking to a financial adviser. Ph: