As most of us know, financial stress can have a significant on your overall health and wellbeing, which is why the EC:Living initiative includes EC:Money as an important piece of its wellbeing program.
For some of us, financial wellbeing means learning how to budget and control spending. For others it’s about eliminating debt, such as your home loan, to get a stronger financial footing as you look to the future. Building wealth is another important step towards financial security. But ‘wealth’ doesn’t necessarily mean earning a large income; it’s about being smart with the money you earn, with an eye on your future.
If you’re looking to take control of your finances, ASIC’s MoneySmart website offers the following five steps to help you build wealth, and improve your financial wellbeing.
1. Know your financial starting point
Make a list of all your assets and liabilities and revisit the list each year to see how you’re progressing. MoneySmart has a Net worth calculator to help you review your current position.
2. Clear your credit card debt
You won’t be able to get ahead if you’re struggling to get out from underneath debt.
MoneySmart has a free credit card calculator to help you work out how long it will take to pay off your card with only minimum repayments, and how much time and money you'll save by making higher repayments. The tips will help to reduce your balance fast and save on interest.
3. Sort out your super
Superannuation will be the main source of income in retirement for many people, so you need to understand how much you have and how it is performing. Using tools like Moneysmart’s free super calculator can help you work out how much super you'll have when you retire. You can then work out if you need to give it a boost—it’s never too early to be thinking about and planning for your retirement.
4. Consider getting financial advice
Whether you’re planning for short (eg saving for a holiday), medium (eg buying a home) or long-term (eg retirement) goals, getting good financial advice can help you reach these goals sooner. ASIC’s Financial advice and you booklet can help you work out what advice you need for your goals, where to get advice, and tips on choosing and working with a financial adviser.
5. Plan your investments
According to MoneySmart, “No matter what type of investment you're considering, it's important to understand the risks involved so that your investment decisions match your goals, timeframes and risk tolerance.”
It’s all about planning, and getting the right advice to ensure your plans suit your lifestyle now and into the future.
* The information in this article is general advice, only. Please seek professional advice from a qualified adviser for specific information relevant to your individual circumstances.
* Photo credit: Lori L. Stalteri/flickr (edited: CC)