Items which should be entered under Expense
- You should enter under expenses any current or future expenses that are not related to assets or liabilities. Examples of expenses you should enter here include annual living expenses, rental payments, holidays and new cars.
Do not enter as an expense:
Loan/Mortgage/HELP Debt repayments Loan repayments should be entered with the details about the loan. See Unsecured loan, Secured loan or HELP debt (a.k.a Higher Education Loan Programme debt, HECS debt). Based on the data you have entered, Pathfinder will calculate the repayment. Tax Tax is estimated based on the other information entered. Running expenses for an investment property Property running expenses should be entered with the Investment Property. Contributions to super
Non-concessional and concessional super contributions should be entered in the Retirement planning goal.
Fees for managed funds Fees for managed funds should be entered with the Shares/Managed fund Deposits to cash or shares/managed funds Deposits to cash or shares/managed funds, including regular savings plans, should be entered at the Cashflows & Goals step in the Cash or Shares/Managed fund sections.
Family home or property purchase expenses
(e.g. deposit payment, stamp duty)
These should be entered in the Acquisition costs field under the Family home or Investment Property. Life Insurance premiums Life insurance premiums that are part of the financial advice (i.e. Life/TPD, Income Protection, Trauma), should be entered as Insurance. However, other insurance (such as home and contents, health, car) should be entered as an expense.
How to add an expense
- To add current and future expenses, go to the Cash flows & Goals step (top menu), then the cash flows sub-step. Find the Expense section, then click the Add Expense button.
- Make sure you apply the correct expense in the correct correct years. For more information, see How to use the series builder. If you need to add an expense relative to an individual's or dependant's age you may find the Age Lookup table useful.
- In the Ownership field it is not possible to enter an joint expense. So, for a couple, just pick one individual to own the expense and Pathfinder will move funds between individuals to meet the expenses. Alternatively, you can divide the expense and make an entry for each individual.
Pre-set values for each expense type
It is important to choose the correct Type for your expenses, since the type you choose affects the tax calculations and other defaults. The following Types have the following pre-set values:
|Expense Type||Pre-set values|
Note that you cannot change the pre-set values, but you can change the type so that your required preset values are applied
You may wish to stop this expense at retirement. For more information, see How to stop a value in the series builder.
|Child support payment made||You should make sure that you stop this expense when the child is no longer dependent. For more information, see How to stop a value in the series builder, you may also find the Age Lookup table useful.|
|Initial plan fee|
|Ongoing advice fee|
Expenses with the Type as 'Rent' will only be applied in the analysis when a family home is not owned. So it's okay to enter a rental expense for every year, and if a family home is bought or sold during the analysis period, the rental expense will only be applied when the home is not owned. In the year a home is bought or sold, Pathfinder will apply half of the rental expense entered, because it assumes properties are purchased in the middle of the financial year (e.g. if you enter an annual rental expense of $20,000, in the year a home is bought, Pathfinder will assume they pay $10,000 in rent).
For examples, see Family home.
|Tax deductible||Any tax deductible expense that does not fit into the above categories.|
|Tax deductible donations||Tax deductible charitable donations.|
Any non-deductible expenses. This could include one-off expenses such as holidays, car purchases, etc.
|Making an expense tax deductible (or not)||Choose the correct expense type (see expense types, above)|
Increasing or decreasing an expense
(e.g. reducing living expenses in retirement)
You can increase or decrease an expense in later years in the Customise field of the series builder. For more information, see How to increase or decrease a value in the series builder.
|Adding a one-off expense||If there is a one-off expense (e.g. new car purchase), when you add the Expense, fill in the Frequency field with 'One off'.|
|Stopping an expense|
You can stop an expense in the Customise field of the series builder. For more information, see How to stop a value in the series builder
|Adding an expense that happens every 2 years (or every 3 years, etc)|
You can apply expenses at less common intervals for things such as house maintenance or big holidays. To do this, when you add the Expense, fill in the Frequency field with the appropriate timing, such as 'every 2nd year', 'every 3rd year', etc.
|Entering joint expenses|
In the Ownership field it is not possible to enter a joint expense. So, you can either:
|Calculating an appropriate time or value for an expense|
Strategy Development Service (SDS) options
If the case includes complex analysis that you are not able to do in Pathfinder yourself, it may need to be submitted to the Optimo Financial SDS. Complexities include, but are not limited to:
- Cases with incomes that have salary packaged expenses such as meals and entertainment or a car lease