17 Dec Are Your Finances Fit? Get Your Money Moving With These 5 Tips
When you set the new month or new year resolutions to get fit and stay healthy, do you consider reviewing the fitness of your finance? Why not? After all getting fit and staying healthy can sometimes be a costly experiment. If you don’t have a financial plan yet, do you know how much you spend each year and what percentage of your income you save?
Well here are 5 lessons that can help you get started with a basic financial plan.
1. Set a target
Whether you have a time in mind, or you just want to reach a milestone, you know how important it is to start with a goal. The same goes for saving and investing.
When you know the kind of future you’re planning for and what you want to achieve along the way, you’ll be better motivated, better focused and better financially prepared.
So whether you want to retire comfortably, buy a home, or take the holiday of your dreams, start by setting a target you can focus on.
2. Don’t skimp on the training
You can’t just wake up the week before a big ride or run and decide to be part of the race, with no training or preparation. You also can’t just wait until you turn 60 before you start saving for retirement.
If you’re a cyclist or a runner, you know the earlier you start training, the easier it is to build up speed and strength, little by little. Similarly, the earlier you start saving, the more time you have to earn interest on your interest and returns on your returns, so you can finish in style.
3. In for the long haul
Long rides and runs are all about lasting the distance. Try and do too much, too quickly, and it could all end earlier than you planned.
The same goes for investing. A disciplined savings plan that builds your wealth gradually is a very effective way to start your financial plan and get you where you want to go, without suffering too much pain along the way. Even a small amount can build up to something surprisingly big over time.
For example, if you put $1,000 in a managed fund at age 30 and then invested just $100 a month, you would have saved more than $40,000 by age 50 (assuming 7.7% growth annually after fees). If you waited until age 40 before getting started, you would end up with only around $16,000.*
4. Mix it up
You probably know that a varied training regime is better than simply running or cycling kilometre after kilometre at the same pace. Just as you should mix up your training sessions with intervals, hills and cross-training, it makes sense to use a variety of different investments to spread risk and to better enable you to reach your lifestyle goals.
So while it may be tempting to focus on paying off your mortgage, don’t forget to pay attention to your super and other investments as well. A mix of investments inside and outside of super could help you achieve your goals both now and in the future.
5. Get a good coach
Every runner and cyclist would perform better with expert advice from someone who knows the race profile, the terrain and devises a personalised training program. That’s exactly the role a financial planner plays when it comes to managing your money. If you are looking for an experienced financial planner, get in touch with our team at Master Your Money Now. We help everyday people get on track with their finances and provide them with strategies to help them reach their goals. Book a strategy session NOW using the link below.
If this is a topic that you would like to discuss in more detail, please go to www.MasterYourMoneyNow.com.au/getstarted to book in your complimentary 30-minute strategy session.
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Disclaimer: This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs. Past performance does not guarantee future returns.
Chris Carlin is an Authorised Representative (No. 1235031 for financial services and No. 514748 for credit) and Master Your Money Now Pty Ltd ABN 65 627 229 681 is a Corporate Authorised Representative (No. 1265677 for financial services and No. 514747 for credit) of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523