When you were much younger, your parents probably told you that money doesn’t grow on trees and if you can get your head around the fact that money is created from paper from these trees, it is very good advice indeed. Many of us carry around credit cards and so we don’t get to really understand how much money we are spending until we get the shock of our lives when our credit card bill arrives at the end of the month. We are now encouraged to use our smartphones to pay for everything and so you don’t miss money going out of your bank because you’re not actually holding it in your hand.
This causes a lot of Australians to get themselves into a debt hole that they don’t seem to be able to get out of and so everyone needs to start planning for the future today so that our money is growing all the time instead of sitting in a lower interest savings account in some financial institution. You might want to think about taking the time to invest in Australian shares because these have been performing exceptionally well over the past decade and there doesn’t seem to be any sign of it slowing down.
This is just one way to create a stronger financial future for yourself and the following are some other things that you need to know about.
- Stop spending money you don’t have – This brings us back to the credit card debt that you have and it is so easy to spend hundreds of dollars using your card without actually realising your expenditure. Buying things makes us feel good but it’s not going to feel good at the end of the month when the inevitable credit card bill arrives. You need to start getting your overspending under control so that you can better manage your financial situation.
- You need protection from inflation – If inflation is higher than the interest rate that you’re getting from your bank then you are losing money all the time. This is why it is essential that you try to diversify your financial portfolio and buy things like Australian shares that will grow for you over the years and keep you ahead of inflation.
- Invest in your retirement – If your employer is already taking money out of your salary to go toward your public pension then that’s great but you can’t rely on this to keep you in the life that you have become accustomed to in 30 to 40 years time. It’s time to start planning today, so take out an additional private pension and put money into this every month as well. When you get to retirement age, you will have two pensions to allow you to enjoy your retirement years.
- Always have an emergency fund – This is something that you put money into so that you always have money available to you in the event of an emergency. None of us know what’s going to happen next week, never mind next year and the many years ahead. You should open a particular bank account for this particular thing and put money away into it knowing that you should never touch it unless an emergency does come up.
Many of us are terrified to ask our boss for a raise in salary, but if you think that you’re worth it then it can’t hurt to ask for a small increase.
