Personal finance fundamentals that your financial planner in Perth wants you to know.
Since the advent of superannuation, Australians are a lot more aware of retirement than in previous eras. We are now encouraged to think of our retirement and are provided numerous investment options for our super funds.
While we applaud this trend, it has a dangerous downside: many Australians think their futures are now secure, solely on the strength of their supers. In reality, this is a dangerous way to think. The best way to take care of your future is to take care of your personal finance situation in the present. Here is a solid program for winning the game of personal finance.
Get Paid What You Command in the Marketplace and Spend Less than you Make
Make sure you are getting paid what you are worth on the free market. If you are being paid even a few thousand dollars less a year, it adds up to a lot over thirty years. Whatever you are getting paid, ensure that you don’t spend it all or go into debt by spending more than you earn.
You must have a budget for personal finance. Figure out how much you have coming in every month. Then figure out your monthly expenses. What you have left over can be used for discretionary purchases, savings and investments. Always stick to your budget, no matter how much you make.
Pay Off Credit Cards and Other High Interest Debt
Credit cards are easy to use; this is by design. They make it easy for us to bury ourselves in high-interest debt. We recommend paying off your highest interest card first, then paying the next until they are all paid off. Then, keep the one with lowest interest for emergencies and get rid of the rest.
Pay Extra into Your Super
Pay extra money into your super. If you make over $37,000, you can use “salary sacrificing” to reduce your tax rate. No matter what strategy you are using for your super, putting extra into it is a great way to make it grow.
Pay Yourself First
That is “investment-ese” for “put money into a savings account every month.” We recommend finding a percentage that works and sticking with it every month. A savings account also helps your credit rating, which can be important when applying for a mortgage.
You also want to set aside money with which to invest every month. We will be glad to help you set up a program at Purely Finance.
Review Your Insurance Coverages
Balance is the key here. You want to make sure that your assets are protected but that you aren’t paying too much money to protect them. Review every policy and ask two questions: “Am I insured enough?” and “Am I paying too much?”
Keep Perfect Records
This is especially important at tax time, but is also an essential part of sticking to a budget. Make sure your recordkeeping is solid and that you know where your money is going every month.
Talk to the Professionals at Purely Finance
While the program we outlined above is going to help you greatly, there is another part to the equation: maximising all of that investment and savings money, including your super. At Purely Finance, we are mortgage brokers and financial advisers. We specialise in helping small investors become successful.
Because we do both financial advising and mortgage brokering, we can be especially helpful to the investor who wants to use property as a vehicle. We can not only help you set up a plan for prosperity, but we can ensure that you are getting the best possible terms on your home loans. We have a wealth of experience in helping investors just like you get the most out of their investment capital.
If you are interested in a home loan or you would like a personal finance advisor to help you assess your current situation and future potential, call (08) 9453 8888 today. It may be the best call you ever make.