TIPS TO MAKE ENDS MEET

STATISTICS show Australians have never been wealthier. If that’s the case, why is it so hard to make ends meet?

Retirees and families are feeling the pinch because we may be asset rich but cash poor. Here are some tips to improve cash flow.

Reduce Expenses

The easiest and quickest way to increase cash flow is to take a look at current expenses and find ways to cut them. Track spending, draw up a budget, and see what can be reduced. You’ll be surprised.

Sell (Some) Assets

If it comes down to it, you can always sell some assets to free up cash. Some are much easier to liquidate and carry lower transaction costs than others, so shares and physical assets are better here than property.

Reverse Mortgage

A reverse mortgage is exactly as it sounds. The bank gives you a lump sum and monthly payments, increasing the size of your mortgage over time, until you sell (or die) and the home is sold to repay the loan. Interest is charged and it compounds, so go in with your eyes open. The return also depends on the property market, so be wary how your home’s value affects the mortgage.

Find Extra Income

This might mean a gradual transition from full-time to part-time work for those set to retire. Or for mortgage holders, picking up extra hours, asking for a pay rise or working a second job.