Financial planning can be challenging and our financial planners on the Sunshine Coast understand how difficult it is for some people to reach their financial goals. So, our planners came up with a list of 10 things anyone can do, regardless of income, to help improve their financial well-being.
1.Create a budget.
The thought of doing this probably scares most people and it is often the number one thing any financial planner will tell you to do, but it’s been proven that if you create a household budget, stick to it, and live within your means, this can help you avoid debt and have better control over your finances.
2.Understand the difference between wants and needs.
Don’t beat yourself about every dime you spend, but does anyone really need to pay $100 per month for a TV package where they only watch maybe half of the programs? Cars can be a huge money pit too. It’s nice to drive the latest model, but don’t live and work just to pay for your car. Learn to be sensible about spending.
3.Become a smart shopper.
Try to find ways to reduce the amount of money you spend by using discount petrol dockets, packing your own lunch (instead of eating out), cutting back on take-way dinners, and try car pooling too. Make a meal plan to avoid waste and when buying big ticket items, shop around for the best deals.
4.Learn to use credit cards wisely.
Credit cards have some of the highest interest rates out there. If you use your cards, pay off the balance before you start incurring interest charges. Make more than the minimum payments each month if you are unable to pay off your card balances in full. If you have several cards that are maxed-out, see if you can roll them into one low-interest bearing card to save on interest. Once the card is paid off, cut it up and live within your means. You’ll be so much happier this way.
5.Contribute to an emergency fund.
Apart from watching your spending and paying off debt, you should always have an emergency fund just in case. As a rule of thumb, you should have at least three months of living expenses in the kitty.
6.Become more savvy with your super.
On average, Australians are losing approximately $1 billion a year in fees, lost payments and earnings by holding more than one super account they are not contributing to. You may want to try salary-sacrificing and consolidating into one fund so you can get the most out of the government co-contribution plan. Self Managed Super Advice might also be worth seeking.
7.Take a look at your current mortgage.
One of the best ways to save interest on your home loan is by making extra payments each month. If a person increased their monthly repayments by $575, they could pay off their loans about 10 years earlier and save a boatload on interest. You can also pay it off faster if you make fortnightly payments as opposed to monthly ones and making lump sum payments whenever possible.
8.Develop a debt repayment strategy.
Debt can cause a lot of stress, so it is essential that people take control of their debt before it starts controlling them. It’s best to pay off ‘bad’ debt credit cards first because they have the highest interest rates. Once those bad debts are under control, a person can start focusing on other debts like car loans and home loans.
9.Protect your family’s future.
No one wants to think about it, but you really need to ask yourself what your family would do if you got injured, became too sick to work, or if you passed away. Put cash aside and consider getting affordable life insurance and income protection through your superannuation.
10.Save for your future.
A lot of people are good at saving for short-term goals but often forget about putting money aside for the future. Your financial plan should include medium-term goals such as saving for a deposit on your first home and even more long-term milestones such as retirement funding and your kid’s education.
Need some help with financial planning on the Sunshine Coast? Our financial advisors on the Sunshine Coast are dedicated to helping our clients reach their financial goals.