Ultimately, making money and growing wealth isn’t about the number, it’s what you do with it.
A financial plan that works for you today could be completely wrong for you in as little as six month’s time if you decide to start a family, setup your own business, buy a house or move into retirement.
So, how do you make those difficult life decisions?
We all know that we should save more, spend less, reduce our debt, be patient and wait for things. At the same time, we know we should eat healthier food, exercise more and call our loved ones more often. The fact remains that when push comes to shove, we probably don’t.
Planning for your finances is the same as planning on losing weight – just the other way around! You want to gain money. And to do this, you need motivation.
Here are a few simple ideas that show how you can make plans for major lifestyle choices:
WE WANT TO START A NEW FAMILY
Starting a family is a MASSIVE undertaking without even considering the physical challenges. You’re going to go from potentially two incomes down to one for a period of time. You’ve got an additional mouth to feed and lots of paraphernalia to buy. When you see the stats, you wonder how anyone can survive it. But they do. It’s always best to start with the basics – a budget.
I WANT A NEW (OR BIGGER) HOUSE
Do you borrow? Do you save? Do you delay or buy now?
Indecision can cost a lot in in terms of money as well as your sanity. Just like everything, map it out. Work out your budget, where are the risks? Will things get tight if rates rise? What are the alternatives, can you renovate if you need more space? How does that compare with the cost of selling and stamp duty to buy something new? Have confidence in your data and your plan, and understand how to deal with any changes that may come up.
I DON’T WANT TO RETIRE
Finding out one day that you actually have enough money to live off the rest of your life can be a hugely liberating experiences. Many people choose not to retire at this point but make drastic changes to improve the quality of their life. It could be volunteering or starting a consulting business to offer your years of experience back to clients. Confidence in your financial position allows you to make these decisions.
Ok, so I understand that a lot can change in my life – how do I talk to my financial planner about it? Just write a list and get it all done. If your financial planner can’t explain how their plan is going to help you navigate around your life, don’t change your life – change your planner.
BRENTON TONG | HEAD OF STRATEGY | FINANCIAL SPECTRUM
THE REALLY SIMPLE GUIDE TO MONEY | OCTOBER 2015
The information provided in this page is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs. You should seek independent advice from your financial adviser before making any decisions.
AUSTRALIAN MORTGAGE AND FINANCIAL ADVISERS (AMAFA)
Phone: 07 3378 2056
Fax: 07 3378 2069