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With more older Australians looking to downsize and younger generations looking to get a foot on the property ladder, building a granny flat or a second dwelling in your backyard has become a more affordable solution.
Some investors find it satisfying to take a do-it-yourself approach to retirement savings – taking on the responsibility for the growth of their retirement savings in a self-managed superannuation fund (SMSF).
In today’s fast-paced world, where every minute counts, managing personal finances can feel like another tedious task. However, thanks to the rise of personal finance automation, managing these tasks, can now be handled with minimal effort on your part.
Deciding when to retire is a big decision and even more difficult if you are concerned about your retirement income.
As we kick off the new year, many of us are excited to embrace fresh beginnings, set new goals, and maybe even tackle those pesky resolutions. But if you’re feeling more drained than invigorated, you’re not alone.
Holidays and gift giving can leave you a little short of cash so it might be cheering to learn that billions of dollars is being held by various government agencies just waiting to be claimed by the rightful owners.
If money’s too tight to mention, here’s some small steps that can make a big difference in achieving your financial goals.
What is an emergency fund? An emergency fund is a financial safety net, offering you instant access to money when you need to cover the cost of unplanned expenses, like losing a job, unexpected travel or a medical emergency. This involves putting funds aside periodically so you can dip into this cash reserve without needing to resort to high-interest loans or credit cards and get into debt or financial hardship. But how much should you have in emergency savings? There are no hard and fast rules, and you should consider your circumstances. The general guide is to save two to three months’ worth of living expenses. But, if you’re thinking long term, like time off work to care for family, it’s worth considering emergency savings of up to six months. How to build an emergency fund Your emergency fund needs to be separate from your everyday spending to ensure it’s available when you need it. Here are a few ways to create and maintain one. Set a savings goal To set a savings goal, work out what your living expenses are each month and then multiply that by the number of months you want your emergency fund to cover. When working out your living expenses, make sure to include: rent or home loan repayments groceries transport costs, like petrol or public transport fares loan and credit card repayments bills like electricity, gas, internet and phone. A budget planner can help you create a monthly budget. If you’re not sure exactly where your money’s going each month, you can track your spending by using a budget app. Open an account and start saving Your emergency fund should be for emergencies only. Ideally, you want it to be separate from your other accounts, so you’re not tempted to dip into it. Look for an account with a good interest rate so you can earn a bit extra each month on your savings. This is part of a wider strategy on bucketing your money that can help you save for different goals and needs. Automate your savings Now that you’ve set up an account, it’s time to start making regular deposits. Consider setting up a regular deposit so money is automatically transferred to your savings account every time you get paid. Maximise your offset account If you have a home loan, consider using an offset account as your emergency fund. That way the money in your emergency savings will also lower the amount of interest you pay on your home loan, while still allowing you to access the money quickly if you need it. Continuously contribute to your emergency fund Whenever you find yourself with some extra cash, like a tax refund, consider using it to boost your emergency savings. Use your emergency fund for emergencies only Remember, your emergency fund should only be used in an actual emergency. It might be worth setting some rules for yourself around what counts as an emergency to you. If you think you’ll be tempted to use it for non-emergencies, consider making the money a little harder to access. One option is to hide your emergency fund from view in online banking. This way you won’t see the balance when you log in and you’ll be less tempted to spend the money. Source: NAB Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/manage-money/budget-saving/emergency-fund National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances. © 2024 National Australia Bank Limited ("NAB"). All rights reserved. Important: Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.
As we step into a new year, it’s a good opportunity to think about what we want to embrace and experience in the year to come. Amidst all the resolutions that might be broken before we know it, one powerful and positive way to approach the new year, is to make this the year of saying yes.
The many unpredictable events of 2024 could easily have been disastrous for investment markets. Instead, we saw remarkable resilience and growth despite occasional volatility as investors reacted to the extraordinary times.
As a small business owner, you may find it difficult to justify taking time off. After all, your business demands your attention, and you worry what will happen if you step away for a break. However, taking a break from the business can be one of the best decisions you make for your business.
Characteristics of goal-driven savers A ‘money mindset’ is a way of thinking about personal finance. Your money mindset can change over time, and it may help explain your spending and savings habits. Understanding this can help you build habits and strategies to better manage your money. If the following applies to you, you might be a goal-driven saver: You focus on growing your savings until you reach a specific savings goal, then relax your savings habits. It’s easy to save money when you have a clear goal in mind. If you won $1,000, you’d put it towards your savings goal. If you needed $2,000 for unexpected car repairs, you wouldn’t need to borrow money or use a credit card - you could take the money out of your savings account. However, this would cause you mild financial strain. About goal-driven savers If you’re a goal-driven saver, you’re good at saving money as long as you have a clear goal in mind. Once you achieve this goal, you tend to slow down your saving. You may switch from being an impulsive spender to a goal-driven saver when you’re saving for something in particular. This is usually a mid-term goal you can achieve in around six months, like a holiday. Goal-driven savers can be reluctant to commit to longer-term goals like a house deposit. When you feel motivated, you work hard to reduce your expenses and increase your income. You also use financial windfalls like tax returns and bonuses to boost your savings. Build consistent savings habits Goal-driven savers are already strong savers. You can benefit from creating sustainable savings habits that you can stick to long-term, even when you’re not saving for anything in particular. You can build consistent savings habits by: Creating a savings goal in an app, so you can watch your savings grow. Setting up automated transfers so money goes straight into your savings each payday. People who save first, rather than saving what’s left over at the end of their pay cycle, typically have more savings success. Asking your employer to deposit part of your pay directly into a separate savings account. Opening different savings accounts for different savings goals. Most savings accounts are fee-free, so it doesn’t cost you anything to separate your savings. Building an emergency fund so you don’t have to withdraw from your savings when faced with an unexpected expense. If you’re ready to start saving for a longer-term goal, look into ways you can improve your chances of being approved for a home loan. Manage your money As a goal-driven saver, you need to find ways to stay in control of your money, even when you don’t have a savings goal in mind. Goal-driven savers sometimes turn into impulsive spenders without a goal to work towards, and you may find yourself taking money out of your savings to pay for unplanned purchases. Can you look at creative ways to boost your savings? Take on an extra shift at work, sell some items you don’t use anymore, or start a side hustle. Look at strategies like tracking your spending and bucketing your money to build consistent saving and spending habits. You can also consider hiding your savings account in internet banking so you’re not tempted to dip into it. It’s also a good idea to set aside time each month to review your financial situation and ensure you stay on track. Source: https://www.nab.com.au/personal/life-moments/manage-money/money-basics/goal-driven-saver Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/manage-money/money-basics/goal-driven-saver National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances. © 2022 National Australia Bank Limited ("NAB"). All rights reserved. Important: Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.