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INSIGHTS WITH EVALESCO

What is your personal economy?
by Matt Last | 1 June 2020

TOPICS DISCUSSED

Understanding your personal economy
Set yourself goals that are ‘SMART’
Financial wellbeing

With the Coronavirus pandemic gripping the world at the moment, people have turned to headlines on the news and various social media platforms to stay up to date with life as we know it.

The world as we know it is going to end!! But we’re all still here, living a healthy, wealthy and happy life, right?

As individuals, can you control the Australian & world economies?

No

What about your own ‘personal economy’? As individuals, can you control that?

Yes

What is your ‘Personal Economy’?

Your personal economy includes your personal finances – income, assets, savings, debt – everything you have worked for. But it is so much more than all of these combined … it paints a bigger picture of how you spend your money and why.

Your individual personality, your priorities in life, your areas for improvement in life, as well as your financial needs and objectives – all of these come together to define what your own personal economy is all about.

Seeing as you can control your personal economy, how do you establish it? How can you then improve it? It’s important to still utilise the professional expertise of good quality financial advice, and we can help point you in the right direction with each of the following.

1. Know where you stand

With life seemingly ‘on hold’ at the moment, it’s a great opportunity to take the time you maybe wouldn’t have had before (commuting to work, socialising with friends) to understand your financial data and where it currently stands.

Some questions to ask yourself:

  • Check your bank account(s), how much is in it/them? What is the purpose of the account(s)? How do you see them fitting in with your long-term goals and objectives in life?
  • Have you noticed that your daily expenses have reduced as a result of isolation? The money saved on public transport, eating out or socialising … could that money be put toward paying off your credit card debt or home loan? How do you think your credit score is at the moment?
  • It’s never a nice feeling to be made redundant or have your working arrangements changed. But what about your superannuation? Do you know how many accounts you have? A quick login to your MyGov account, along with your tax file number, under ‘Manage my super’ could lead you to a nice surprise.

2. Get organised

A valuable piece of advice my father gave me, “Son, if you fail to plan, you plan to fail”. Planning, goal-setting, and organisation are essential to not only improve your finances in the short-term but to set you up for long-term success.

Set yourself goals that are ‘SMART’:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Time-bounded

Once you have these SMART goals in place, put key dates on the calendar, reminders in your phone – anything to keep you focused in achieving these goals.

Most importantly … remember to celebrate the wins. Like with anything in life, accomplishing a goal can provide you immense satisfaction and pride, and knowing you had great help and support along the way makes the accomplishment all the more satisfying.

3. Stay focused, stay busy

The most important tool for improving your finances is budgeting. Schedule time every week to look at your accounts, upcoming payments, and expected income and to create a budget that meets your needs. Now is a great time to prioritise your personal finance time like you would work, school, or any other obligation.

While we are all in self-isolation, it’s also a fantastic time to practice self-discipline in all aspects of your life – getting used to cooking meals at home instead of going out. Have you exhausted the Netflix catalogue, and don’t see the need for paying for it? You might wish to pass the time by reading a book.

4. Get smart

Congratulations! You have successfully created a budget that is easy to stick to, easy to monitor, and works for you, your lifestyle and your goals. You know where you stand, you have goals and objectives, and are completely focused on them.

What’s next?

Let’s consider taking a deeper dive into the world of personal economy.

Books, articles, seminars, and online courses are all great ways to increase your knowledge about finance, economics, time-management, and goal-setting. The time spent crammed on a train in the morning and evening commute could be used to read books about budgeting or forming healthy habits.

With all this additional time saved spent in isolation, what about ‘that course’ you thought about doing?

It’s a great time to focus some of your energy on learning and improving your skills. Accomplishment is a great feeling when times feel tough.

5. Pay, save and invest

The final step to improving your personal economy is to pay, save, and invest. It’s important to make sure you plan for long-term stability, first.

Always start off by managing debt. Credit card debt, mortgages, personal loans … these are just a few of the many things that can put us in the red. If you are spending less on expenses currently, there is an opportunity to focus on paying off debt at a reasonable pace and on time while maintaining a savings balance.

Ask yourself, “how is my savings balance looking at the moment?”. There are a multitude of options available to you and your money, so that it can work as hard as possible for you. As you already know ‘the purpose of your accounts’, is the administration vehicle they’re in going to be able to help you achieve this purpose?

Above all, make sure you think your investments through and always maintain a financial safety net.

Improving your financial wellbeing can be a lengthy and daunting process. However, with good planning and support, self-discipline, and budgeting, boosting your personal economy is within reach.

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“How will I measure the value or success of receiving financial advice?”

We believe the true value of financial advice isn’t found in dollars and cents (although this is important too!) but in the peace of mind a financial plan can provide. It’s knowing where you want to go and how to get there, with a dedicated team behind you every step of the way.

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“How do I know Evalesco is the right fit for me?”

We know the impact of good holistic financial advice can make and we have the life experience, technical capability and quality support team that can make that difference for you. We’ve empowered over 1000 families through the delivery of great financial advice, to be healthy, wealthy and happy.

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“How do I know how much money I will need to retire?”

The amount of super you’ll need when you retire depends on your big costs in retirement and the lifestyle you want. The Associate of Superannuation Funds of Australia (ASFA) estimates for a single $44,224 a year and for couples $62,562 a year is how much you may need. This is only an indicator and our advisers assess everyone’s individual circumstances.

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“Why should I pay for financial advice?”

The fees we charge for financial advice is only a fraction of the value we derive for our clients, meaning our clients are always better off after seeing us. Rarely do we encounter a new client invested appropriately for their needs, with adequate risk protection, structuring and estate planning provisions in place. Even small tweaks to a financial plan over a long period of time can result in drastically better outcomes for our clients which eclipses the fees of the financial advice. Additionally, you can opt-out of an ongoing fee arrangement at any time.

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“How do you charge for your services?”

In our discovery meeting with you our advisers discuss the initial advice fee and the ongoing fees associated with our services.

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“What is the process for getting our own personal financial plan?”

After our initial phone call to discuss why you are seeking a financial adviser, we arrange a discovery meeting that outlines what is important to you, your current position, our areas of advice, our approach. We then present a Statement of Advice (SoA) to discuss your goals and our recommendations and go through the steps of how to proceed to the implementation stage. After signing the SoA, we discuss your questions, get you to sign the authority to proceed and complete any application forms before implementing the recommendations detailed in the SoA.

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“Should I pay more off my mortgage or put more money into super?”

One thing to consider is the interest rate on your home loan in comparison to the rate of return on your super fund. Before making a decision, it’s also important to weigh up your stage in life, particularly your age and your appetite for risk. Whatever strategy you choose you’ll need to regularly review your options if you’re making regular voluntary super contributions or extra mortgage repayments. As bank interest rates move and markets fluctuate, the strategy you choose today may be different from the one that is right for you in the future

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Phone: (02) 9232 6800

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