This week I want to talk about getting the foundations right.
I was reading through the Financy Women’s Index report for Jun-18 this morning, it turned up some interesting facts.
Women are faced with a gender pay gap nationally of 14.6% and a 30% superannuation savings gap at retirement.
Whilst I discuss with clients investing on a day to day basis, unless you’ve mastered the fundamentals of saving (or using other people’s money), then building a better financial future may be just a pleasant daydream.
Transitioning from a spender to a saver can be hard, but it is doable; and it’s important to make better use of our money and investments, especially as it seems more work is to be done in closing the gaps for women.
Here’s a few tips:
- Be mindful and track your spending. Little cutbacks are relatively painless. Did you know saving $4 daily, by not buying a second cup of coffee, is nearly $1,500 in 1 year; and could be as much as $17,000 in 10 years time through the magic of compounding.
- Starting small helps to pave the way for greater savings in the future. What value could you add to your investments if you took your lunch one day per week? Or, cut back on convenience purchases when refueling. Or better still, only bought what you need when you need it? Write down the first 3 things that come to mind, it’s a start.
- Creating greater financial discipline doesn’t have to be hard or mean you can’t have any fun! Set yourself a goal. Use it to become more disciplined in life, you’ll go further in the future if you are confident of your money habits.
- Unforeseen expenses will always crop up. Create a buffer for emergencies by putting a little away regularly into a separate account. If you take a hit, don’t let it defeat you, keep up the discipline and before too long you’ll have enough in your buffer account for comfort. Then, you can enjoy occasional treats and tip more over into your savings or investments.
- Every little bit counts. We have so much access to information these days, so make it a habit to look around for better rates and offers. You could even spend just 15 minutes of your daily commute checking in on your finances (including super) and looking for deals.
- There is so much chatter in the media at the moment about “side hustles”, a term I haven’t really taken too! The reality is, you may be better served by taking a closer look at your cash flow and spending habits first. Instead of rushing into a second job or home industry; whereby you’ll have less time to focus on the foundation stones of financial wellbeing, family and fun.