According to a number of studies up to two thirds of Australians report being stressed about money.
With the majority of people stressed about money, New Years is the perfect time to commit to becoming financially healthy. Interestingly enough, according to a recent Nielson survey, only 25% include anything related to finance in their New Year’s resolutions. Enjoying life to the fullest came in at 31%; a lovely goal for 2018, but hard to do if you're broke and living week to week! Increasingly we're learning that stress, specifically financial stress, directly affects our health and well-being. The APA study found that around one third of adults reported experiencing feeling nervous or anxious (36%), irritability or anger (35%), and fatigue (34%) due to their stress. So, you don't have to trash your current resolutions, but let's all add "become financially better" to your list for 2018.
We all know what you're thinking; resolutions are made to be broken. Although most resolutions are probably kaput by January 15, the key is to have a clear attainable plan to meet your goals. Committing to financial health can be achieved in 2018 in four specific easy steps.
Step 1 (really): Establish a list of your goals. We constantly hear that we need to save more, but we're not just saving for fun. Your chance of success will improve dramatically if you have specific goals you are saving for. Short term goals are within two years (travel, pay off loan), mid-term are 2-5 years (buy a home) and long term are 5+ (retire at 62).
Step 2: Create your two key financial statements: budget and net worth. This will get you organised and show your full financial picture: what you have, what you owe, and where your money goes. Everyone hates a budget, but it doesn't have to be a form of torture. For a simple outline to create a budget, click here. The net worth statement is a snapshot of your total finances. Total all assets and liabilities, then subtract liabilities from assets. ASIC Money Smart Website provides a straightforward online worksheet to follow here.
Step 3: Compare your financial picture to your goals. Identify your strengths and weaknesses. Do you have enough saved to reach your goals? If not, can you pull some additional savings from your budget. Make a plan to get from where you are now to where you want to be.
Step 4: Make an appointment to see a financial adviser. Anyone can complete steps 1 to 3 on their own. Most however, need some extra guidance. This can be intimidating to some, but the purpose of seeing an adviser is to help you reach your goals; the process can be as simple or complex as you want. Ideally everyone would meet with an adviser for a full analysis and comprehensive plan; if you're not ready for that just make an initial appointment to talk through the process.
At Heart Financial Advisers, we don't charge for the initial consult, so it can't hurt to discuss your options with us.
Ring us on 1300 861 143 or email email@example.com.
This information is current as at 04/01/18.
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