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Sometimes, when thinking about your long-term financial goals, they can seem so big as to be insurmountable. But the truth is, those that achieve financial success don’t usually do so by encountering a sudden windfall. Rather, they have in place a set of small habits that allow them to work towards their dreams. And by investing small amounts over the long-term, they see big outcomes.
You see it’s much like climbing a mountain. When you start your journey, the summit can seem intimidatingly far off, but with every little step you get closer to your destination.
Your finances work the same way. The small steps you take today could make a big difference in the future.
They say it takes 60 days to establish a new habit. Automating a transfer into a savings account on the other hand takes all of a few minutes. Starting with a small amount that you won’t miss is the best way to go. Frequent regular payments —$50 a week is easier to bear than $200 a month—will mean you don’t feel the pinch.
When choosing an amount to set aside, you want to ensure it’s a sacrifice you can bear so that you can still enjoy the little things, and not so large as that you’ll have to dip in during the month.
As you adjust to these subtle budget tweaks, you can incrementally increase your automated savings contributions over time.
The same principle applies for your debt repayments. Even committing to a small increase could make a big difference in how quickly you pay off your debts.
Once you’ve decided to commit a little bit more towards paying down your debt, it’s time to consider your repayment strategies. Here a few options you may wish to consider.
Everyone’s situation is different and therefore the approach to repaying your debt will depend on your unique circumstances. We can help you figure out which method will suit you best.
No matter where you are on your journey towards retirement, small incremental additions to your super could make a big difference to the overall size of your nest egg.
A popular way to approach this is through concessional super contributions. Often called salary sacrificing, it works by your employer redirecting a portion of your pre-tax income (above the standard 9.5% contribution they already pay) towards your superannuation. This can have a number of benefits: it’s taxed at a lower rate, and money in your super account continues to generate compound interest over the long term. This can make a big difference to your nest egg when you eventually retire.
Concessional super contributions are capped at $25,000 per financial year and can be tax effective if you’re earning over $37,000.i
Sometimes the smallest financial habits are the ones that bear the most fruit over the long term. So, this year why not make some small changes that will really add up.
We can help you maintain your lifestyle while working towards your goals - Give us a call today.