Are you failing to meet your financial goals? If you answered yes, read on.
In April 2021, Finder.com.au released data revealing that the average Australian aged between 23-39 years has $28,426 in savings, while those in their late fifties to early mid-seventies have an average of $40, 463 in savings. If you find yourself wondering who these Australians are and why you aren’t one of them, you’re certainly not alone.
Naively, when finishing high school or graduating from university, you may have visions of securing an amazing paying job, winning lotto or receiving some form of inheritance from a rich relative. Instead you find yourself earning below the average Australian wage (ABS stats November 2020: Average annual wage is $89,122pa) and wondering how on earth you’re going to meet your rising rent, put food on the table and pay the rest of your bills. The financial goals of buying a home, buying investment properties, paying for your children’s tertiary education and planning for a comfortable retirement may feel out of reach. Even with a secondary income from a partner, the cost of living is on the rise
If you are living from week to week, juggling bills and dodging debt collectors, there are achievable financial goals you can set for yourself.
1. Put a budget in place
It may be common sense to have a budget, but more than a quarter of Australians fail to track their spending. Having a grasp on your incomings and outgoings can give you a sense of control and help eliminate financial stress. Your financial goals don’t have to be broad sweeping goals such retirement planning or saving for house deposits. By setting smaller financial goalposts, you will feel a sense of achievement when you reach the finish line. For example; your saving goal might be to purchase annual passes to Village Roadshow theme parks on the Gold Coast or a family holiday in a nice hotel rather than pitching tents at the local campground. If you’re not sure how to set up a budget, an independent financial planner can help you analyse your expenses and decide on SMART (Specific, Measurable, Achievable, Realistic, Time-specific) goals to help you stay on track.
2.Create an emergency buffer
An emergency buffer is an amount of money set aside in a high-yield savings account designed for—you guessed it—emergencies. A financial emergency is an unexpectedly high power bill, car breakdown, dental or medical emergency. Your favourite winter boots on sale are not an emergency.
Write down your monthly expenses and tote up the amount, then triple it—that’s a good amount of money to have set aside for the unexpected. If you or your spouse get made redundant, three months of expenses is a good amount of money to tide you over. It also gives you a chance to regroup without stressing about defaulting on accommodation, loans or bills.
3.Minimise your tax
No one likes paying more tax than they need too. Yet, every financial year thousands of Australians are missing out on claim benefits they’re entitled too because they’re simply not across the latest tax laws. There are a multitude of different ways to reduce your tax bill from offsetting your mortgage, utilising salary sacrifice benefits, setting up a family trust or Self-Managed Super fund. It’s always advantageous to talk to an accountant who specialises in your individual circumstances. For example; if you’ve got stocks or bonds, you’ll want to talk with a tax accountant rather than a certified bookkeeper.
Read more: No one likes paying tax, so why do most Aussies pay more than they need to?
4.Look at where you can cut costs
So many of us have no idea where our money goes every week. In a survey conducted by Dodo, it was revealed 60% of Australians waste $240 a week. Three out of five of the survey participants revealed they overspend on food, and that fruit and vegetables often go off before they get to them. 22% considered a daily barista coffee was considered a must-have. While an independent research company AMPD, discovered that 60% of Australians are paying for online subscriptions they’ve forgotten about—app downloads such as streaming networks.
If you’re struggling to meet your financial goals—regardless of your financial situation—a chat with a wealth advisory company can be extremely beneficial. After discussing your circumstances and where you want to be financially, National Wealth Advisory can connect you with their network of trusted professionals which include taxation accountants, financial planners, investment or mortgage brokers—whatever you need. This will save you valuable time and ensure you’re talking to the right people with the right qualifications.
If you’re tired of being below average, contact us to discuss how we can assist in helping you achieve the seemingly unreachable financial goals you have been striving for.
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