The beginning of a new financial year can be a fresh start to take control of your financial future.
Why Does Financial Planning Matter?
Money isn’t everything, but it touches every part of our life. Without a plan, it’s easy to spend without considering your priorities, missing opportunities to save and invest.
Financial planning isn’t about being rich – it’s about making your money work hard so you can enjoy now, build passive income for the future and manage risks that might take you by surprise & throw you off track.
Why does starting now make sense
- Fresh Start: A new financial year feels like a clean sheet of paper & a perfect time to set some goals.
- Manage Surprises: Life happens – car repairs, job changes, medical & dental bills. Planning ahead helps you cope.
- Make your Dreams Reality: Dreams need money and a plan to come true, whether it’s travelling, buying a property or becoming financially free.
Financial Planning Tips for Every Age & Every Stage
In your 20s:
- Build an emergency fund: pick an amount (2-3 times monthly income), add to it regularly to build it up and quarantine it from your spending account.
- Avoid high interest debt: if you don’t pay off your credit card balance monthly, the interest rate you are charged on the unpaid balance is much higher than a home loan interest rate (>20%).
- Start saving & investing early: time is on your side and a massive advantage, so start early to carve out money to build up your assets and a passive income.
In your 30s and 40s:
- Make your spending intentional: this is usually a high expenses period in life particularly if you are adding financial dependents in the mix. Striking the balance between covering the costs for now and still putting money towards longer term goals is important.
- Review insurance: health and home insurance, life and income protection insurance should all be reviewed regularly to ensure your main risks are being managed and you are not paying too much in premiums for features you don’t need.
- Increase investment contributions: as your income increases also increase your regular contributions to your investments, both inside and outside of superannuation.
In your 50s and beyond:
- Check your retirement savings: are you on track to having the level of passive income you need from your investments to provide a comfortable retirement?
- Check your beneficiaries: update your Will and check your superannuation beneficiary nomination, and make sure your loved ones know where all this information is stored.
- Become debt free: are you on track to significantly reduce or eliminate debt before you retire and is downsizing a financial & lifestyle option that is worth considering?
Your New Financial Year Checklist
- Spend less than you earn – increase your savings first before increasing lifestyle spending
- Pay yourself first – move some money automatically into savings after being paid
- Build an emergency fund – prevent smaller ‘problems’ from becoming debt disasters
- Start investing early – lean into the power of compound growth by investing even a small amount of money regularly as soon as possible
- Avoid destructive debt – not all debt is equal, and paying interest on credit card debt is very expensive
- Manage big risks with insurance – your ability to earn income is your biggest financial asset, so if you insure your car and home, it makes sense to protect your income too. Life, total and permanent disability and income protection cover can keep an unexpected illness or injury from undoing years of hard work.
Make This Your Best Financial Year Yet
Wherever you are on your journey, a new financial year is the perfect time to pause, take stock and set your direction for the months ahead. You don’t need to tackle everything at once. Choose one or two things from the checklist above, put them in place, and build from there. Small, consistent steps have a way of compounding into real results over time.
If you’d like a hand turning these ideas into a plan that fits your life and your goals, the team at FuturePoint Wealth is here to help. Get in touch and start the new financial year with clarity and confidence.
This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.
