Synchronised swimming may be one of the strangest sports being broadcast from Paris this month. In some ways it’s probably also one of the most inspiring. Seeing everyone moving together, in harmony, towards a common goal is beautiful.
Wouldn’t it be great if you could see the same sort of beauty in your finances? Well, in this article we’re going to look at ways that you might be able to make that happen.
Professional advisers getting along swimmingly?
You probably have an accountant who’s really focused on tax, and a financial adviser who’s really focused on your financial plan for the future. You might have a lawyer helping you with things too. They’re all looking out for you. But they’re often looking at things from different perspectives.
At Elston we work collaboratively with accountants, family lawyers and estate lawyers to help clients get a more 360 view of their affairs. This can be really helpful, especially when a big decision needs to be made.
Synchronised super
One area where the benefits of closer collaboration are often noticeable is with your super. This is especially true if you have a self managed super fund.
The name suggests that you are doing it all yourself. But in reality, the management of a self managed fund will usually require the guidance and expertise of specialists.
This specialist guidance isn’t just required to ensure that your fund is meeting its legal obligations and staying on the right side of the ATO. It can also help you to structure your investments, establish some balance in your portfolio of assets, and manage risk as you work towards your goals.
Peg down a budget that lets you breathe.
A lot of people think budgets are just for people who are struggling to get on top of their finances. But really, everyone should have a budget.
It’s one of the best ways to get in sync with your money, identify where your money is going, and ensure your expenses aren’t exceeding your income. When it’s done correctly, a budget identifies areas of wastage – a bit like paying for a gym membership you never use. So, a budget doesn’t restrict you, it frees you up.
By getting into the habit of ‘save first, then spend’ you’ll find it easier to work towards your goals. How do you create a budget? Well, there are lots of ways. Pen and paper might be all you need to kick things off. If you’re a Microsoft Excel fan, you can draw up a spreadsheet that can be easily updated month by month. There are lots of budgeting apps out there too. See if your bank has one that works for you.
The main thing is to keep track of your income and expenses. It’s a great way to improve your relationship with money.
Pump up your emergency fund floaties
Do you have an emergency fund? Having some cash stashed away for a rainy day is a good idea, but not everyone does it. People who don’t have an emergency fund, or their fund is too small, might have to dive into credit card debt to cover an unexpected medical bill or home repair. These short term credit sources can be expensive and might create an unwanted debt that’s hard to shake.
Dive into your super fund’s performance
While our superannuation is often one of our most significant financial assets, a lot of people barely give it a thought while they’re working. Many of us wait until we’re close to retirement to look at our super, and by then it may be too late to make significant changes.
If you haven’t checked on your fund for a few years, you could be in for a surprise. Even if you did your research, and picked the best super fund for your needs, markets change over time, and your fund may no longer be offering the performance you expect. Are you in a balanced fund? Should you be in a growth fund? What kinds of fees are you paying? Does your fund provide you with adequate insurance cover?
Dive in. Do your research. And action now. A little bit of course correction now could get you back on track for a better outcome in the future.
How many points are you scoring for diversification?
Having a diversified portfolio of assets is vital. It means that when some assets are not performing as well, other assets might be able to balance things out for you.
Diversification is something the ATO wants to see in self managed super funds (SMSFs) too. If your SMSF is only investing in a single asset or asset class e.g. property, the ATO might have some questions for you.
So how do you achieve this diversification? Some people maintain several retail and industry funds, thinking that this will deliver diversity. This may not be a good strategy. Many retail and industry funds tend to invest ‘close to the index.’ This means that each fund may have very similar holdings.
To achieve greater diversification, think about the assets inside the fund, rather than the number of funds. If you have an SMSF, seek personal advice from a financial adviser.
Diving into life after work
What do you think life might look like when you start working less? Is it an endless holiday? Is it finally getting to do the things you’ve always wanted to, but never had the time?
Planning for retirement isn’t just about financial goals. It’s about building and maintaining strong social connections. It’s about your physical and mental health. It’s also about finding your purpose.
Your work has probably defined who you are. It has given you your drive and the satisfaction of kicking goals. How will you replace that?
These are some of the conversations you can have with your friends and family, they’re also discussions you have with your adviser. They’re a good sounding board and can help you translate dreams into financial goals.
A good planner can help get you in sync
Like any journey, when it comes to your finances, planning is the key. Once you’ve set your goals, a financial adviser can help you map out a practical path to get there. Financial advisers will explore a number of investment options and strategies with you to help build your wealth, including shares, property, cash and fixed interest investments, term deposits and superannuation.
It’s not just about planning for the future either. A financial adviser can help adjust your current situation, as well as preparing you and your family for the years ahead.
Elston is here to help
If you’d like to get in sync with your finances, don’t hesitate to get in touch. To speak with one of our advisers call 1300 ELSTON or contact us.