I have big dreams, but I need a plan!
This week is Financial Planning Week! If you have any burning questions about your finances, head to the Ask an Expert forum and ask a qualified expert for free.
It’s not uncommon for people in their mid 20s to find themselves unsure of what to do with their hard-earned cash. For early school leavers especially, years of full-time employment and perhaps even an unexpected lump sum inheritance, can even result in some spare cash lying around.
But what should you do with it?
When faced with endless options, it can be overwhelming to wonder what to do. While those around you might mean well, seeking financial advice from an experienced and qualified financial planner is priceless. Here are some of the things your financial planner can discuss with you:
Your Life Goals
Before getting into the nitty gritty, it’s important to clarify what you want to achieve in life – in a 3-5 year time frame, but also later down the track. Don’t just focus on the big dream, think about the steps that will get you there. Consider the following:
– Are you studying part-time, or do you plan to enrol in a course anytime soon? It would be wise to leave yourself with the financial flexibility to cover things like course fees.
– Are you thinking of starting a family? Perhaps you have already. In which case, property might become a core strategy.
– Are you thinking about going travelling, or do you plan to stay in full-time employment?
Of course, there are many more considerations. The list goes on. A qualified and experienced financial planner will ask you the right questions and help you translate your dreams into a financial plan. Some options you might want to start thinking about are:
If you’re living at home with no dependents, and in the fortunate position of paying no (or little) rent, property investment could be a great way to start building your nest egg. Before you jump right in, there are some financial considerations you’ll need to be aware of – such as stamp duty, inspection fees, mortgage insurance, legal fees and so on.
Investing your Money
Whatever you decide, it’s important that your money is working hard for you – and not lying dormant in a low interest account. Investing your money could be a smart move, but the right combination of investment really depends on your plans for the future and your comfort level with risk.
For easy access to funds you need in the short term, you might want to consider a cash account with a high interest rate. You can do some research online to find out which accounts are performing best. Your financial planner can help you decide how much to set aside for this. If you’re not worried about flexibility and confident that you won’t need to access a large portion of your money, it might be a good idea to lock it away in a term deposit. Of course, there are stocks and shares too.
Again, this all depends on you as an individual and what you hope to achieve in the future – there is no one-size-fits-all solution. Now is a great time to seek the right financial advice and get on the road to a bright financial future.
A good place to start is the FPA online directory Find a Planner. All financial planners in this directory are members of the Financial Planning Association – this means they have met minimum education standards and are bound by high ethical standards too. Put simply, you’re in good hands.
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