Time poor and too busy to save
21 Nov 2014
By Shadforth Financial Group
Increasingly today's young people are so busy juggling their work, lifestyle and family lives that they often neglect to take the time to consider making the key financial decisions that will help to shape their financial future.
In my role as a financial planner, I see the above scenarios all too frequently. Why does this happen?
Through our education system, we focus on many key subjects to help set us up for our future working careers, but little regard is shown to learning about the basic financial considerations and decisions we face in the early part of our adult lives. Key issues such as;
Personal debt -The most common debt we all face is our mortgage. It sticks with us for 30 years and we pay hundreds of thousands in interest charges to our banks. We tend to over-capitalise in our first home buying above our means which can restrict our cash-flow, often resulting in 'blowout's' with our credit cards.
Lack of insurance cover - While we can often access insurance cover within our superannuation, when was the last time you reviewed this? Do you know how much cover you have or how much you actually need?
Unfortunately most of the people I see don't have enough cover to pay-off the mortgage, never-mind provide for their spouse and family. We have a perception in Australia where we have no qualms about insuring our material objects eg, cars, house, etc, however many people still disregard income protection insurance, which protects the very salary that helps to buy these 'material' objects in the first place.
Retirement savings – Even though we may not realise it we are saving for retirement every day. Your employer contributes 9.5% of your salary to your superannuation fund every pay. Yet young Australian's generally have a disinterest in superannuation because they cannot access the funds.
Another key issue I see is people having multiple superannuation funds – stop for a moment and think about how much you are paying in fees for these different accounts.
There are over 120 superannuation funds in Australia, 99% of the time you'll only ever need the one fund. Making the decision on which one is right for you is the difficult part. Does your fund allow you to invest how you want? Is it competitive with its pricing? Does it give you other benefits such as mortgage discounts and affordable insurance? Are you kept up-to-date and do you have the information you need to make informed decisions?
Where to turn and who to trust
All of the above questions can be answered with the help of a professional financial adviser who will help you to identify your goals and objectives. Without doubt the earlier you start planning, the better off you'll be. Unfortunately all too often I see the anxiety of those who have not prepared until later in life.
While many people are time poor and busy with their lives seeing an adviser whilst you're young can be the best thing for you. Taking an hour of your time now is likely to save you pain and anxiety about your finances in the future and will put you on the right path for the lifestyle you truly dream of.