Goals key to smooth finances
We are already well into the new financial year - the perfect time to check if your financial goals are on track.
It's a sad reality that few people think much about finance until they reach 30, and then struggle for the next 20 years as they battle with home loan repayments and school fees. Suddenly they find themselves aged 50 with maybe 15 years to go to retirement, and are gripped with worry, as they try to work out how they're ever going to get enough money together for a comfortable retirement.
This is why I've always urged people to form an association with a reputable financial adviser at an early an age as possible. The adviser will help them work out when they want to retire and how much they will need to enjoy the lifestyle they desire.
The next step is to agree on an asset allocation that fits their goals and their risk profile, and then work out strategies to help them reach those goals. These strategies will almost certainly involve salary sacrifice to super and possibly borrowing for property or shares.
A major plank in this process is good money management because it's impossible to put money away for investment if you are spending more than you earn. A good indicator of this is the credit card statement when it arrives each month - if you can't pay it in full, you are obviously living beyond your means and heading for trouble.
So the first step is to start living within your means - the next is to take advice about investing the surplus income that you now have.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: firstname.lastname@example.org.