Set your money goals
With a new financial year upon us, now’s the time to turn over a new leaf and get finances in order, writes Brooke Evans-Butler.
What better time to get your finances in order than now — at the start of a new financial year.
Women of all ages can have a fresh start financially and the experts have weighed in with advice.
In your twenties
Kane Jiang, Certified Financial Planner professional and director of AA Financial Planning, recommends setting savings goals to fund your lifestyle goals, for example for a deposit to buy a property.
Marie Watts, CFP professional from Boutique Advisers, says in your 20s it’s not how much you earn, it is how much you spend. She recommends ensuring your income is protected, then suggests working out a budget.
“The Budget Planner on the MoneySmart website is a great place to start,” she says. “The free budgeting app is also available on this website. Avoid your income being deposited into the same bank account as the one your spending comes from — that’s a recipe for spending everything you earn. Instead, consider transferring your expenditure allocation to another account with day-to-day access, leaving the savings preferably in an account with no card access.”
In your thirties
Mr Jiang says because young families are typically on a single income, he recommends women in their 30s focus on minimising household expenses.
“Consider working part-time as soon as practicable,” he says. “Childcare costs are substantial, so consider family support (roster babysitting with friends/relatives) and consider public education for the kids. Consider claiming a Centrelink family tax benefit. You may be able to obtain about $10,000 per annum if your family situation satisfied the requirement.”
Mr Jiang also recommends contacting a mortgage broker to review your mortgage at least every three years.
“For example, a one per cent interest rate savings on a $500,000 loan is $5000 per annum to the family,” he says.
He also recommends reviewing insurances, including health, home/contents and life cover.
In your forties
Ms Watts advises women in their 40s to start thinking about family wealth long-term.
“Extra super contributions, modest super-splitting and spouse contribution strategies commenced early can act to equalise super balances between the higher and lower income earner,” she says. “These use small steps and the power of compounding over time, potentially maximising assets in an environment that will be eventually tax-free.”
In your fifties
Mr Jiang recommends considering planning for retirement, such as maximising salary-sacrifice to superannuation.
Ms Watts says if you are not already active and informed, to get involved and participate in all financial decisions.
“Ask questions. Understand. Do a bit of research for yourself. Prepare for being able to make confident financial decisions on your own,” she says. “Ask yourself ‘What if’. If you do not have the time or inclination to do this yourself, seek financial advice from someone who is prepared to impart knowledge and coaching/mentoring as part of his/her service, and be prepared to pay for it.”