Get 2020 (Financial) Vision

It is the time of year when we often hear others speak about their new year’s resolutions and our TV airways are flooded with commercials for losing weight or giving up smoking. Why not try something a little different this year for yourself? Get a clear vision for your financial future in 2020 instead.  It is a New Year’s resolution that you will not only thank yourself for, but something that will directly benefit your family and their future as well. Having your finances ‘sorted’ can help give you more options for how you live your life both now and in your future retirement.

There are some important steps you need to take to achieve a clear vision for your future in 2020. They include:

Step 1: Select Your Goals

Many people live week to week, without thinking about their future.  It is these people who often find themselves at the cusp of retirement realising that they will not be able to continue their current standard of living.  This is not a good place to be and can cause a lot of stress and anxiety.  For this reason, having a plan for your financial future can help alleviate stress both now and in the future.

Choosing your goals or knowing where you want to end up is a vital step of setting your financial vision.  They help lay the path to success.  When it comes to our financial lives, common goals are often “save a house deposit”, “get out of debt”, “sort out superannuation”, “save for retirement” or “pay for the children’s education”. These are all great goals.  What is also important to look at is what type of lifestyle aspirations you want to achieve.  Everyone has different goals and that is ok. You need to consider what makes you happy and what will provide you with a fulfilling life. Travelling around Australia in a motorhome might sound like some sort of cruel and unusual punishment to you but a life’s goal to someone else. As the saying goes, “money doesn’t buy happiness” but the unfortunate reality is that it does buy choices and choices are something that you want at all stages of life.

Step 2: Quantify Your Goals

It is great to have a goal, but what gives them more strength is to quantify them. By making your goals quantifiable they are measurable.

Instead of “I want to get out of debt” quantify it – “I want to pay off my $15,000 credit card debt in the next 3 years”.

Instead of “I want to save for retirement” quantify it – “I want to have $65,000 a year to live off in retirement”.

Instead of “I want to pay for my child’s education” quantify it – “I want to save $110,000 over the next 8 years to pay for children’s higher education”.

Measurable goals enable you to be able to break them down into smaller, more manageable pieces or steps. In the higher education example, you could then look at what you need to save each month to reach your goal.

Step 3: Don’t Go It Alone

Get advice from an expert.  We often think that we can manage our finances by ourselves, but the research shows that those who get financial advice do better than those who don’t. A study called ‘Value of Advice’ by Core Data in 2018 found that everyday Australians who received financial advice confirmed that it added tangible value to their assets in retirement as well as peace of mind. An experienced financial adviser can assist your decision making to help you reach your goals.  A holistic adviser will tailor a plan which would incorporate advice on superannuation, wealth creation, personal insurance, debt management, budgeting, property strategies and estate planning. It is the role of a good financial adviser to help you achieve your goals, those that are important to you. An ongoing relationship with a financial adviser can give you peace of mind that you are on track to achieving your goals.

Financial advisers can help give you a clear vision for the future.  They can use forecasting software that can give you a clear picture of the financial future you could have.  They can predict how much income you will have in retirement on your current trajectory and if you make changes or additional contribution to superannuation. They can advise you on strategies to pay down your debt faster. They can help you make informed decisions about which debt you should focus on first.

Step 4: Protect What You Value Most

An important part of having a clear financial vision is knowing that you and your family are protected if something was to happen to you. Australians are good at insuring their car and house, but they seem to miss the fact that their greatest asset is really their ability to earn an income.  If this ability was taken away how would you support your family’s lifestyle?  Personal insurance can protect your income earning ability and provide security for the future.  Some people think that they can’t afford personal insurance, but in many instances, it can be paid for through superannuation.  Not all insurance policies are the same, therefore it is important to get expert advice to know that you are effectively covered in the event of a life changing illness or incident.

For expert financial advice from an award-winning team get in contact with Singleton Financial Planning 02 4038 1623.

The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. The views expressed in this publication are solely those of the author; they are not reflective or indicative of licensee’s position and are not to be attributed to the licensee. They cannot be reproduced in any form without the express written consent of the author. Singleton Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.