Finances can be a constant source of stress. There’s always room for improvement, so it’s easy to focus on doing and forget to stop and recognise how far you’ve come.
The idea of achieving financial success is a bit of a misnomer – there is no one true success. Your journey doesn’t have a natural conclusion, so stop chasing an undefined concept of success and consider how many of these indicators you’ve already achieved.
Financial planners often stress the importance of emergency savings. Having funds to cover temporary loss of income or sudden large expenses is crucial to protect your future and build financial resilience. Despite this, more than half of Australians don’t have enough saved to cover income loss and one in three households couldn’t afford a $500 surprise, reports the Commonwealth Bank.
Take a look at your own savings now – do you have enough available to you to cover up to three months of expenses? If so – congratulations! You’re achieving above the majority of Australians.
Financial resilience keeps your wealth growing through hard times.
Credit cards offer great flexibility and can be leveraged positively – but they also have the potential to spiral out of control.
A recent investigation conducted by the Australian Securities and Investments Commission (ASIC) found that 18.5 percent of consumers are struggling with credit card debts. Managing your debts effectively doesn’t mean having none at all – after all, debt can be a great thing. Think about mortgages or investor loans: these financial tools can help you build wealth in the long-term.
Having your debts in order simply means your repayments aren’t causing financial stress. You should be able to comfortably manage repayments while still having disposable income available to enjoy your lifestyle.
For some people, money in a pay cheque is money to be spent. That means a month’s earnings are generally spent within the space of a month, regardless of income levels. If you’re regularly reaching your next payslip with a little left over, your total balance will be gradually increasing – building savings that can be leveraged for greater wealth growth in the future.
Even a small excess each month means you have a positive habit in place which can be enhanced with a little nurturing. Pat yourself on the back for knowing how to live comfortably within your means.
Around 23 percent of Australians don’t have the slightest idea how much money they have saved in their superannuation fund, and only 34 percent can say for sure, reports ASIC. Knowing your super balance means you’re cognizant of the future. You need this kind of foresight to help you plan and continue to achieve your financial goals – particularly a comfortable retirement.
Staying aware of your financial position puts you at an advantage to achieve future financial success.
You define success – let yourself celebrate.
Investing outside of superannuation can be scary for some people. The top three reasons Australians choose not to invest are that they can’t afford it, don’t feel confident enough to make large financial decisions or believe it costs a lot to begin investing, according to the ASX Investor Report.
If you’ve started investing, this shows you have the financial prowess and capital to begin serious wealth accumulation – no small feat! Consider yourself even more successful if you’re among the 39 percent of Australian investors between 25 and 34 years old.
To achieve success, you first need to define it. By identifying your goals and building a plan to reach them, you’ve taken your first step to success. Don’t take this lightly – the majority of Australians don’t make use of a three to five-year plan, and even fewer plan for longer, according to ASIC.
What you need to know
This information is provided by Invest Blue Limited (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.
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