Our 30’s are a time of big changes for most of us. We’ve left our fancy free 20’s behind and are more likely to be married and have young children, or be thinking about starting a family and of course wondering whether we’ll rent or own. It is also a time of career and earning consolidation for many people, yet this does not always translate to having good financial habits and being smart with money.
We would always recommend you see a qualified financial planner to help achieve goals and find strategies to better manage your wealth, but if you haven’t already developed good habits in your 20’s, here are a few things you can do to help get you on the right financial management track!
Create a budget and a have a plan.
Working out exactly how much money you have at your disposal and what you spend your money on can be an enlightening experience. Knowing these details is one of the first steps to take and will help set the basis for your future goalsetting. When you’ve done this you can go on to work out what type of things you have to - or are comfortable spending money on, and where you can reduce your spend.
There are plenty of good Apps available to help you set budgets and track you spending habits. The government offers a free website - Moneysmart, which has a budgeting app called TrackMyGOALS, which can help you set, plan, track and manage your goals. You could also check out the highest rated budgeting apps available at iTunes and Googleplay.
Find your lost super
There is currently $16 Billion in lost superannuation in Australia. If that was cash - would you value it more?
It’s not unusual for people to have numerous different jobs in their first decade or so in the labour market. The fact that employers have to make compulsory superannuation contributions on behalf of most employees means that we often have several different default superannuation accounts set up for us for every different job. Finding those lost superannuation accounts can be done easily through the ATO, which offers a ‘check your super’ service through the MyGov platform (using your TFN), alternatively several industry super funds offer a free search function on their websites.
Superannuation is a complex topic, so getting the right advice from an expert is vital, as this will ensure you are invested appropriately for where you are in life and that you maximise such benefits as life insurance inside super and minimise possible fees and expenses which may be eroding your retirement savings.
Your superannuation will become your second biggest asset, behind the family home, so make sure it is working for you.
Reduce credit card use and debt
Access to easy credit is both a blessing and a curse. Having the ability to get what we want, when we want it can sometimes allow us to blow our budget without thinking too much about it – until payment is due of course. Going through your credit and debit card statements and highlighting where you make impulse or other purchases you don’ HAVE to have will give you more knowledge of your spending habits and could help you reduce extraneous purchases. Try to reduce the amount owing on your credit card and always pay when it’s due to avoid penalties and extra interest payments.
Shop around to reduce fees on you fixed costs.
With so much information online, it only takes a little time and effort to search out a better deal. Not only on your mortgage rate but on things like your internet plan, Gas, Electricity and mobile phone. You might be surprised by what you get offered to stay with your current provider if you give them a call and mention better deals elsewhere!
Build a 3-month income buffer
It’s a good idea to build up and income buffer in case of any emergencies or unforeseen circumstances. According to the most recent stats from the ABS, around 20% of people had cash flow problems at least once in the last 12 months and nearly 15% of people were unable to raise $2000 within a week for something important like a unplanned medical procedure. Setting up an “emergency fund” or as one planner put it, a GOK (God Only Knows) account will help you in times of unexpected financial stress and will reduce your anxiety as you know you have a plan in place when life bowls you a googly.
Do your tax return sooner rather than later.
This is really simple. We all pay tax. If you are going to get a tax refund, its better that the money is sitting in your account than the Tax Department's. Make it a habit to get your tax done on time. If you are going to do your own tax return this year, the deadline is 30th October.
Like anything, we have to put a little work into our financial health and security, it won’t necessarily take care of itself. You can take steps yourself but it’s great to have some experts available to help you along the way. A professional financial adviser offers detailed expertise and can help with things like goals setting, cash flow budgeting, superannuation advice as well as savings, investments and planning for all facets of your financial wellbeing.
This is general advice only and does not take into account your specific objectives, financial situation or needs. Readers should seek their own professional advice before making decisions.