Prepare for the worst by saving
RESEARCH from Suncorp shows 900,000 Aussies are worried about their financial security following the floods and Cyclone Yasi.
The financial strain forced about 500,000 to take out a loan, draw down a mortgage, or access superannuation or new credit card.
How financially prepared would you be if faced with difficult financial circumstances?
And don’t think it’s only income earners at risk.
Research from the University of Melbourne’s Centre for Corporate Law and Securities Regulation found a 261 per cent increase in personal insolvencies between 1990 and 2008, with bankrupts who classed themselves as managers, professionals and associate professionals rising from 11.3 per cent to 27.3 per cent of the total.
Research from the Australian
By DAVID and LIBBY KOCH Bureau of Statistics some years ago found only 20 per cent of Australians retired when planned.
Most people’s planned retirement is brought forward due to outside factors, so retirement is underfunded and lifestyle eroded.
Australians are generally hopeless at preparing for financial emergencies, so let’s put that right by adopting a few simple steps.
Take out all your insurance policies and make sure the house, contents and car are all covered properly. Then check fine print.
Do a quick calculation on how much it would cost to replace everything in your house. We bet you’ll be stunned at the total amount. Fix it quickly.
Make it a project to have a sixmonths salary emergency fund. Put aside any windfalls. Safeguard cash flow with income, life and trauma insurance. Make debt manageable. Pay off your most expensive debt and then start working on the rest.
Start saving in superannuation early and regularly
Retirement should be the best time of your life. It shouldn’t be a time of financial uncertainty.
Super contributions attract tax benefits so take advantage of them. Be sure you are in a good fund matching your risk profile.