Financial planning and wealth management are concerns that are taking priority in people’s lives these days. Young adults in Australia are rapidly adopting money management principles and savings-oriented behaviors.
Living from paycheck to paycheck is no longer a glamorous notion, which means that many people nowadays look to not just save, but also invest their money for higher returns down the line.
Still, wealth management and financial planning are challenging prospects. Recent research from The Monash Center for Youth Policy and Education Practice has shown that more than a quarter of young Australians experience some form of financial difficulties.
These levels have risen particularly after the pandemic since that was the time when financial pressures mounted worldwide. Today, more than half of Australia’s young population uses buy now, pay later services, which are effective solutions in reducing collective monetary strain. However, the subject is still under debate.
Are you someone who wants to get better at financial planning and wealth management? Here are some tips to help you get the best results:
Sit with an expert
The first step towards building a life where the monetary pressures are minimized is to sit with someone who has extensive experience in the field. Although you can find a lot about money management online, choosing a financial advisor who is competent and experienced allows you to discuss your issues and requirements face-to-face.
These meetings are infinitely more productive than just learning something through YouTube and implementing it in your life. The local expert you find can assess your individual standing and needs. Then, they can provide you with the best budgeting and wealth management advice that is not only locally applicable but also the most effective.
Learn the 50/30/20 rule
Obviously, a financial advisor will cost money, and if you are looking to start a healthy financial routine, in the beginning, you may not be able to afford one. That’s all right because basic wealth management tips are simple and free.
For instance, one of the most basic rules about money ever to be taught is to divide income into three portions. The first is for your expenses, the second is for savings, and the third is for investments.
The exact percentage of division can vary, but the accepted ratios are usually that 50% of your income goes towards regular monthly expenses, 30% goes towards savings for any untoward or future expenses in the short-term future, and the last 20% is for investments in the long run.
Create a budget and stick to it
Another fundamental wealth management tip is to create a budget. Most young Australians these days struggle extensively because they don’t keep their spending in check. This means their salary runs out before the month’s end, putting them under significant pressure during the last week or so.
This is a common problem that has a simple solution known as budgeting. Writing down the expenses and separating needs as well as wants is the ideal way to get your spending habits in check. Moreover, it’s not just about creating a budget but also about sticking to it religiously.
Eliminate debt and pay bills on time
The burden that comes from unpaid debt is sometimes the leading cause of financial stress, particularly in young individuals. Student loans, credit cards, car loans, and even buy-now-pay-later installments are all regular monthly expenses that diminish your income considerably. This is why experts advise getting rid of any debt that you have.
There are many guidelines on how to do this. Two of the most efficient include classifying your debts by the biggest to smallest. Select the order you are comfortable with, i.e., paying the highest first or the lowest first. Whichever way you pick, start eliminating them one by one.
On the other hand, you can classify the debt instruments but interest rates from highest to lowest. Once again, you can choose which ones you want to pay first and eliminate them systemically. When you are able to get rid of all the debt you’ve accumulated, you can sleep peacefully and build wealth more effectively over time.
Consider investment avenues carefully
Investments have not just become easier over the years, but there are hundreds of avenues out there that offer steady and even aggressive returns. Of course, the rapid returns carry massive risks like with cryptocurrencies, but either way, they are an avenue that exists.
Although the youth has heavily invested in the crypto market, given its volatility, this is not an investment opportunity that is recommended. There are numerous other places where a professional financial advisor can facilitate you in putting your money so that it not only remains safe but also grows over time.
Wealth management and financial planning have become imperative components of our lives these days. These are the steps that help build a stronger future not just for you but for the generation to come as well.
All it takes is a few simple steps like making budgets and sticking to them, separating the needs from the wants, investing the “wants’ money for better returns, eliminating debt instruments from your life, and diversifying investments to make the best yields. Together, these simple steps are life changers for you and your family.