9 money management tips to get ahead
When I speak to people, one of the biggest things that consistently pops up is that people don’t know where to start when it comes to getting ahead financially. Here are 9 money management tips to get you started.
1. Set a plan with achievable goals and continue to review and refine
It’s a tried and true statement that when you fail to plan, you plan to fail. The best businesses in the world have targets, goals, and actions of what they wish to achieve. Goals should be flexible however, as your life will change, and some things may become more valuable to you over time.
When setting goals, a simiple solution to use is the SMART principle of goal setting. SMART stands for:
- Specific: What exactly do you want?
- Measurable: How can you demonstrate and evaluate the success?
- Attainable: Goals must be attainable and be able to be met, even if challenging at times
- Realistic: Is the goal realistic in nature?
- Time-bound: Setting clear target dates and milestones will greatly assist.
2. Learn from the Richest Man in Babylon
Control your expenditure. Save at least 10% of your earnings or more if you can and always pay the most important person first. If this isn’t achievable right away, then work your way towards spending less than 100% of each pay.
3. Manage your debt
Debt isn’t necessarily bad, but it depends on the purpose. Investment debt can be tax-deductible, assist with building assets. Pay down the bad debt (owner occupied/credit cards/personal loans) first.
4. It’s time, not timing
It is not the timing when it comes to investing. Start young and invest to benefit from the market ups and downs. Utilise dollar cost averaging as a strategy so that you don’t get caught in the trap of trying to time the market.
5. Spread your investments with diversification
Look to invest in growth assets for the long term. If all of your money is in cash or term deposits, this has more stability and reduces your chance for loss, but over the long-term, cash historically underperforms property and shares.
6. Be patient
Always think about the long term when investing. Worrying about your investments on a daily basis will keep you up at night. Look at the longer term, and if you don’t have a long time-frame, stay away from speculative assets.
7. Stay focussed
In contrast to the above however, don’t set and forget for years to come. Review your situation on a semi-annual or yearly basis to ensure that you’re on track, and if not, what changes could potentially be made to help.
8. Tread warily around hot tips
If something seems too good to be true, it usually is. Speculative hot tips, short term solutions usually carry a high amount of risk, cost, or both. Be sure to do research before investing in the next ostrich farm type investment.
9. Refer to a professional
Managing money can be an emotional subject. A qualified and professional financial planner will help to reduce your stress, give you an idea on where you are, and also be honest with you about your goals and how to reach them. If you need a hand, give us a call.
Disclaimer: The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Synchron Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Mirador Wealth Management, Synchron, nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information. Authorised Representatives of Synchron AFS Licence No. 243313