6 STEPS TO FINANCIAL FREEDOM

Transcription

1 6 STEPS TO FINANCIAL FREEDOM

2 Setting Goals When it feels like you won't reach your goals, don't adjust the goals, adjust the action plan MOTIVATIONAL GOALS It is important when setting goals to make sure that they're goals that will really motivate and drive you towards something that is important to you. Every goal you set, make sure they're positive (get healthy > lose weight) and also write down WHY the goals are important to you. S.M.A.R.T GOALS Specific, Measurable, Attainable, Rewarding, and Time-bound goals. Having these big overarching idealistic statements as your goals will not help you in achieving all you want out of life. Make sure that when you are setting your goals that you use the guidelines of a S.M.A.R.T goal. MAKE AN ACTION PLAN The act of writing your goals into an action plan will make it real, tangible and can be very powerful. Having a written action plan and sharing it with someone else will help you make sure that you're doing the most important part of goal setting... Sticking to your goals.

3 Budget A budget is not a collection of numbers but an expression of our values and aspirations CLEAR FINANCIAL TARGETS Write down your most important life goals with a rough idea of cost. - 3 Short Term (1-2 years) ie. travel, save a deposit or buy fridge - 2 Medium Term (3-5 years) ie. buy first home, travel, start family - 1 Long Term (6+ years) ie. pay off homeloan, buy investment KNOW YOUR SPENDING Print out the last 3 months of bank & credit statements and calculate your total spending, including any yearly payment that is missing. Now work out your monthly spending by dividing the total by 3. REMEMBER: Do not make excuses for "one-off costs" AUTOMATIC BUDGET Now its time to set up automatic bank transfers to fund your current financial commitments as well as short, medium and long term goals. Setting up your banking structures to support this is going to help/force you to do this. Ask one of our cash flow management team to help with your budget and banking structures.

4 Debt Debt is like an other trap, easy enough to get into and hard to get out of INCREASE REPAYMENTS Small increase in your monthly debt repayments will make a huge difference in the total interest you pay over the life of the loan. If you increased monthly payments by $50 a week on a $500,000 home loan at 6% interest, over the 30 years you would save over $90,000 of interest. BALANCE TRANSFER If you are struggling to get on top of credit cards or personal loan then consider an interest free balance transfer and aim to pay the loan off completely during the interest free period. Warning: Balance transfer are not to be used as a way of ignoring your debt. GET A BETTER DEAL Ironically many banks offer better rates to new customers then they do to existing customers... until you are willing to leave. Make sure you ask your current lender to match a better offer and if they are unwilling to match the rate then consider refinancing your loan to get the better deal.

5 Insurance If a child, a spouse, a life partner, or a parent depends on you and your income, you need insurance RANK CURRENT INSURANCE Write down all your current insurance policies such as home, contents, car, pet, life, income, travel, health, landlord and/or funeral insurance and rank them from most important to least important. Check your super fund as you may have inbuilt insurance. ALWAYS USE PROTECTION Now that you've ranked your current insurance policies consider how important each policy is in helping you achieve your short, medium and long term goals. Identify what types of insurance cover would rank higher than the policies that you have on your list and make sure you get covered. START COMPARING There are numerous comparison websites out there to check if you're getting a good deal and don't just assume that your '10% multi policy discount' or special rate means that it is the best policy for you. Insurance isn't just about cost, you want to also get paid.

6 Savings A budget is not a collection of numbers but an expression of our values and aspirations SAVE SMALL The best way to set up a successful savings plan is to make sure you are saving small amounts as regularly as possible. Eg. if you saved $20 not buying lunch and coffee every work day you would save $5,341 after only 1 year! SAVE NOW Do you remember when you were younger and first started getting pocket money? The first thing most of us started to do was SAVE it and somehow we have forgotten how to do this. Start your saving plan TODAY! The earlier you save, the quicker you will reach your goals. SAVE ALWAYS The most common issue with a saving plan is that once you hit your goal and go on that holiday or buy that car, most people stop their savings plan. Make sure that even if you are only saving $10 a week, you are always stuck in that good money management habit.

7 Superannuation A budget is not a collection of numbers but an expression of our values and aspirations FIND AND CONSOLIDATE There is an estimated $16 billion dollars in unclaimed super from over 6.3 million members (45% of workers). Don't be neglectful, that super could be working harder for you to provide a better future in a more effective super account. You may also be double paying for inbuilt insurances. Costing your retirement $ month after month. LONG TERM INVESTMENT Superannuation is basically saving for your retirement. If you're in your 20's, 30's, 40s or 50's then retirement is still a very long way off, so make sure that the investment option you have chosen (or defaulted to) matches your investment time frame. LOOK AT THE FEES Superannuation fees can be very costly, but they are very often ignored. There are 4 different fees to look for: Insurance premiums; administration fees; investment fees; and advice fees. Speak to your advisor about how you may be able reduce these fees.

8 199 James Street New Farm QLD 4005 PO Box 199 New Farm QLD Infinity Financial Consultants Pty Ltd and its Advisers is an authorised representative of Affinia Financial Advisers Limited ABN AFSL No This booklet has been prepared by Infinity Financial Consultants Pty Ltd, ABN Infinity Financial Consultants Pty Ltd Is a Corporate Authorised Representative of Affinia Financial Advisers Limited ABN AFSL The information in this document contains general information and does not take into account your personal objectives, financial situation or needs. We recommend that you consult a licensed or authorised financial adviser if you require financial advice that takes into account your personal circumstances. You can check whether a person is a licensed or authorised financial adviser by visiting the Australian Securities and Investments Commission at