“Money without financial intelligence is money soon gone” Robert. Kiyosaki
People tend to focus on their short-term problems. It’s easy to get stuck on pause with so much happening in the world, but moving forward with a set financial strategy and taking control of your finances now, will have you thanking yourself later.
How many stories have you heard of lottery winners earning millions, but then losing it all in 5 years… or professional athletes who were making millions, who then ended up working at a car wash. All because they didn’t budget their money and plan for their long-term positions.
Budgeting is a simple process, in which a plan is created as to what you spend your money on. However, this simple process seems to get twisted in most people’s minds when more money comes into play. This is where ‘lifestyle creep’ falls into play.
‘Lifestyle creep’ occurs when an individual’s standard of living improves as their discretionary income rises, and former luxuries become new necessities. Just got a pay rise? Cool, buy the new shoes or gadgets. Your year-end bonus arrives, that’s a new car. Get promoted, that’s a bigger house.
Goal 1 – Talk to a Financial Adviser
Life is already complicated; don’t let financial stress and varying financial resources/priorities add to the complication. 28% of Australians surveyed said it affects their health, 23% relationships at home, 22% productivity at work, and for 12% of Australians, it affected their ability to attend work.
According to CoreData Principal Economic Researcher, Andrew Inwood:
“Good advice does of course make you wealthier at retirement, but it also adds value all the way through your life in the choices you can afford to make about schooling, insurance, holidays, housing and personal interests”.
Despite this… Anne Fuchs, Head of Advice and Retail Distribution for Sunsuper, says nearly nine million Australians have unmet financial advice needs.
Engaging a Brisbane local as a financial adviser, with expert knowledge in Property Investment, Property Management, Superannuation, Accounting and lending, will not only improve your financial health but can also help you improve your physical and mental health.
Core Data surveyed 1000 Australians as part of the research project finding that 80% felt more confident making financial decisions as a result of receiving financial advice.
The same percentage believe that advice has brought them more peace of mind; with 75% stating that financial advice is worth more than it costs.
Goal 2 – Smash Your Debt
Getting out of debt is an important step to taking control of your financial interests.
By focusing attention on reducing debt, you can reduce the amount of your salary that is used on the accrued interest. Being debt-free is also a very liberating concept; having more freedom to do the things that you want to do, and allocate your finances in more productive ways. Becoming totally debt-free may be a while down the road for some people, but making sacrifices today to make it possible is worth the effort. Make it SMART:
- Setting yourself a debt repayment schedule or automatic payments will help you keep your goals measurable and attainable
- Go through any old or unused items and see if there is anything you could sell
- Reduce spending on non-compulsory items
- Get a temporary second job
- Utilise sites like Fiverr or Airtasker to supplement your income to make extra repayments
Goal 3 – Boost Your Savings
Saving is a critical component of financial success. You should be aiming to save at least ten per cent of your income each month. You’ll be surprised how quickly that money grows. Snowball effect, eat your heart out!
Establishing healthy and routine saving habits now will prepare you for retirement in more ways than one. If you find it hard to save, your financial adviser can help you evaluate your current spending habits and identify areas that could be cut back.
Saving is easier when you’re aiming for something specific. Think about your goals and integrate them with your savings. The goal of saving is to make it a habit, make it SMART:
- Commit to ‘no spend’ days – focus on free local activities
- Stop eating out or less frequently
- Reduce your grocery bill – plan your meals in advance and REDUCE WASTE
- Contact your utility providers and seek a better deal or look at competitors
Don’t let financial stress put a dampener on your progress. It’s never too late to plan ahead and set yourself some financial goals that will keep you in good stead.