Pick any newspaper, and you’ll be confronted with news about a struggling economy. With Toys “R” Us and various other retail shops closing their doors, many Australians are on the verge of unemployment. Similarly, lots of organisations are doing away with permanent employment and opting for contractual agreements instead, eroding the job security of their employees. Lack of employment opportunities can be incredibly demotivating and disempowering. Therefore, it’s crucial to take steps that will protect you from any unprecedented economic changes or emergencies involving you or your family. Here are five steps to get you on the road to financial health.
Seek financial help
Devising a sound financial plan is no easy task and requires extensive planning and insight. Given the number of rules and regulations, tasks like filing taxes, arranging unemployment benefits and decoding financial jargon can be tough. Therefore, it’s always a good idea to make an appointment with a financial advisor. An advisor is equipped to help you deal with an array of questions and tasks like doing taxes, getting a home loan, understanding investment policies, or even getting small, fast loans for people with bad credit.
Budgeting may seem like a mundane task, but it’s crucial to guaranteeing your financial health. A coherent budget helps you understand your spending patterns, enabling you to make better decisions in future. It also allows you to prioritise and divide your household income into categories like rent, groceries, and utilities, ensuring that you’ll never be short on money when it comes to paying for the essentials. Always try to create two separate budgets – monthly and yearly – for your short-term and long-term financial goals respectively.
An unforeseen event like a fire, motor vehicle accident, losing your job, or having a medical emergency that causes disability or death can put you and your family back by thousands of dollars. Often, the bills accumulated usually overtake the household income, which is why it’s vital to have an insurance policy that will protect you in such circumstances. Adequate health and life insurance, as well as vehicle and property cover, will allow you to have money after a debilitating incident, enabling you to rebuild your life without the added pressure of money troubles.
Having set goals in life motivates us to stay busy as we work towards achieving them. Similarly, having financial goals – like building a house in the future, getting your kids enrolled in a good college, or even travelling post-retirement – enables us to save our earnings wisely. Ensure that your goals are specific and measurable rather than vague as this will help you stay on track. Additionally, quantifiable goals fill us with a sense of pride and accomplishment when we reach them.
Saving money is an integral part of sound financial planning, and investment takes that money and allows it to grow. Investing in bonds and high interest savings accounts ensures that you have a sum of money set aside for emergencies or other goals, like the kids’ education, building a house, buying property, or starting a business. Before investing, always do enough research to find out what the best investment avenues are.
Thinking of your finances can be daunting, but it’s vital to be proactive so that you’re prepared for anything that the future may hold. Consider creating a budget, setting goals, arranging insurance and investing, and you’ll be well on your way to financial health.