Five tips to avoid a breakdown on your financial journey
Almost half of Australia’s workforce is worried about their current financial situation. Financially stressed employees spend 20 hours of their work time each month trying to solve their financial problems*.
To help you get back to work, we’ve put this list of tips together to start you on your journey.
1. Have a clear destination
If you don’t where you want to get to, how are you ever going to get there?
However, an astounding 87 per cent of Australians have either no financial plan or only a rough plan in place for their financial future*.
You don’t need to pay a financial planner to have a financial plan. You just need to have a serious think about what you want your money to do for you in life. Do you want to buy a home or an investment property? Do you want to travel? Do you want to retire early?
2. Plot your journey
It’s good to know where you are going, but you also need to know where you are now. Financially that is.
Take a look at Map My Plan for some help with pinpointing your position. This tool will then help you with some ideas on how to get where you want to go. This may be as simple as putting a budget in place to manage your spending, or setting up an automatic debit. Whatever it takes, make sure you put in some milestones along the way so that you can see when you are making progress.
3. Brace yourself for a bump in the road
Life doesn’t always go to plan. Injuries, illness or the loss of your job could easily throw your plan out of place. It’s a good idea to have between three to six months of living expenses in saving as your emergency fund.
One in 10 Australian workers would go into immediate debt if they lost their job. Thirty-six per cent can only access up to $1,000 before going into debt. That’s not surprising given almost a third are saving $100 or less a month*.
4. Take precautions
It doesn’t take much to throw you off track. A sporting accident, an illness, or a back strain could put you out of action for months. If you can’t work, how do you pay for the rent, groceries, credit card, electricity etc.?
Only one in three Australians have life insurance, and around a quarter have disability, accident or trauma insurance, and income protection insurance*.
You are your greatest asset – not your car, nor your house and contents. Make it a high priority to organise insurance.
5. Prepare for a dead end
You do need to prepare for the unlikely event where you find yourself with no way out.
You need a plan if an accident or medical condition leaves you unable to make decisions for yourself, or even death. It’s tough to think about, but it’s going to be even tougher on your loved ones if you haven’t prepared the necessary legal documents.
Start by listing beneficiaries on your financial accounts, and make sure you update them after major life events such as getting married, divorced, or having children.
Nominate a medical and financial power of attorney who will make health care and financial decisions for you if you are unable to do so yourself. You should also prepare a will to outline who you want to have your assets, and who will care for your children; otherwise, a court will decide.
More than 43 per cent of Australian workers know they don’t have enough money to do the things they want to in their lives*. You can plan to be with them, or ahead of them. Choose financial freedom – it will empower you to make decisions on the fly.