Have you thought that maybe something might prevent you from working in the future whether it be illness or even a change in attitude? Sometimes it is the actual word retirement that has a negative connotations to some people but try to think of it as the point at which you become self-sufficient from passive income and not income from any exertion. You should plan on working towards this point as soon as possible and should you choose to work beyond this point you will have the security of knowing it is all by choice and a not financial consideration.

It’s important to have a cash reserve to meet day-to-day emergencies like replacing a household item or an unexpected repair. We will discuss your personal needs and recommend an amount to be kept as your cash savings, separate from your other investments.

When our capacity to save increases, which is generally due to a combination of hitting our salary peak and expenses decreasing due to children leaving home, there is a chance to capitalise on this theoretical surplus for the future. What can happen instead though is that lifestyle expenditure increases. There is often a balance between investing in current experiences and investing for the future. But what if I told you that could do both? By making plans about what we want to achieve we also can achieve purpose to our spending. If, for example, you have a plan to travel every year maybe you do not need that extra coffee everyday; that saving could be an extra $1,000 per annum to put towards a trip. To help with budgeting the first step is to map out your essential spending so that you know exactly how much you can spend on discretionary spending. The next step is to make the decision based on your goals whether you want that trip to Italy or alternatively a trip to a cheaper destination that allows you to save some money to make extra repayments to that lingering mortgage, extra contributions to super or a contribution to an investment. Managing your cashflow and having a budget gives power and informed choice to your decision making and is the foundation of a sound financial strategy.