Poor financial money management could lead to serious budget and lifestyle consequences. Whether you’re on a low income or earn big, not being able to manage your finances will probably bury you in debt. Financial money management might seem complicated, especially for young adults who’re just starting to learn what’s it like to earn a salary and have expenses. Making mistakes in the first few months you become financially independent is definitely ‘allowed’. Otherwise, how will you learn? But making the same bad choices over and over again can really lead to a budgeting disaster later. And there’s nothing worse than finding yourself covered in debt and unable to save for your future plans or retirement.
Whether it’s boom time or bust, how the economy is doing impacts on your business. All businesses in Australia, from the big ‘corporates’, to smaller companies, are facing increased pressure from changing economic conditions, changing government requirements and effects of such things as globalisation and information technology. Farmers are under as much, if not more, pressure than corporate businesses in the pressure they face. Pressures come from external sources such as weather/drought, government legislation and reduced finance from economic conditions that impact on commodity prices and interest rates. While you may not have control over the economy at large, understanding what drives it can help you manage threats and maximise opportunities.
Not Keeping a Budget
- Where does all your money go?
- Keeping a budget isn’t fun for everyone, but it’s necessary
- It’s important to keep track of your expenses, so you’ll know exactly how much you earn and how much you spend and how
- It’s a very common mistake to only track your main expenditures; mortgage/rent, vehicles, loans
- The truth is, you also spend serious money on children, education, amenities, pets, insurances, upkeep
- Let’s not forget life’s simple pleasures that also add up; food, clothing, the coffee you pick up on your way to work, the beer you have after work and who knows what else
- All these are expenses that you need to track otherwise, you’ll only find yourself with too much month at the end of your money!
Debt is a big problem world over. Without a proper financial plan or budget, it is very easy to spend beyond your means without being aware of it. Over time this could leave you with substantial debt as you head toward retirement.
Not enough for retirement? In order to have a quality life at retirement, you need to save and plan ahead for it. A Financial Planner can make sure you have the proper investments and spending plan, so you have more than enough assets to enjoy your retirement.
Living beyond your means can easily lead to overspending. Preparing in advance for large expenses is critical. It is much more rewarding to save for your next big purchase, and then run up your credit cards. If you are not careful, it can lead to further debt, which can easily spiral out of control.
Everybody’s life is full of unexpected events, and often these situations can lead to massive expenses. Ill-preparedness or not having any savings for such unexpected events could spell disaster as you just don’t know where you are going to find the money from? Experience informs us this can have an impact to spiralling costs, which by the time you get sorted you are now financially worse off than from the initial financial challenge.
If you have, or you’re planning to have children, it is important that you manage your finances responsibly. The cost of raising a single child from birth to seventeen years old is on average $297,600 with Schooling costing up to $66,000 through the public school system and $475,000 through a private school. And for those who have children it doesn’t stop there! Four-year degree even at a State College is astronomical, make sure part of your plan includes a Savings Plan for College expenses. The earlier that you start, the better as money has a chance to compound and grow.
Yes times are tough, and it would be very easy to sit around and join in with the negativity, or you can generate your own positive self-fulfilling prophecy. It would be a shame to waste this recession. The only way to ensure a financially secure future is through proper financial planning. If planning is inadequate, it could spell disaster. While setbacks are inevitable, it can be devastating if you don’t have adequate planning.
It is important to seek expert guidance to ensure a better future. Now is the time to contact AAA Consulting to help you review your strategy, explore best practise, get creative and design a financial plan tailored to your needs.