- Get Paid What You're Worth
It sounds simplistic, but many people struggle with this first basic rule. Make sure you know what your job is worth in the marketplace, by conducting an evaluation of your skills, productivity, job tasks, contribution to the company, and the going rate, both inside and outside the company, for what you do. Being underpaid even a thousand dollars a year can have a significant cumulative effect over the course of your working life.
- Spend Less Than You Earn
No matter how much or how little you're paid, you'll never get ahead if you spend more than you earn. A little cost-cutting effort in a number of areas can result in big savings. It doesn't always have to involve making big sacrifices.
- Stick to a Budget
How can you know where your money is going if you don't budget? How can you set spending and saving goals if you don't know where your money is going? You need a budget no matter how big or small your income is.
- Pay Off Credit Card Debt
Credit card debt is the number one obstacle to getting ahead financially. Those little pieces of plastic are so easy to use, and it's so easy to forget that it's real money we're dealing with when we whip them out to pay for a purchase, large or small. Despite our good resolves to pay the balance off quickly, the reality is that we often don't, and end up paying far more for things than we would have paid if we had used cash.
- Contribute to your super
Super is a great and tax-effective place to store your money. If you’re not contributing extra money into your super, you're walking away from one of the best deals out there. Of course it is very difficult to withdraw this money before retirement.
- Have a Savings Plan
You've heard it before: Pay yourself first! If you wait until you've met all your other financial obligations before seeing what's left over for saving, chances are you'll never have a healthy savings account or investments. Resolve to set aside a minimum of 5% to 10% of your salary for savings BEFORE you start paying your bills. Better yet, have money automatically deducted from your pay and deposited into a separate account.
If you're contributing to your super and a savings account and you can still manage to put some money into other investments, all the better.
- Review Your Insurance Coverage
If you had a machine in your loungeroom that produced $50,000 in cash every year, would you insure it? Of course you would! So why don’t you insure your ability to earn an income? In some cases you can have your super pay the premiums so you won’t be out of pocket.
- Update Your Will
Most Australians don't have a will. If you have dependents, no matter how little or how much you own, you need a will. Protect your loved ones. Write a will.
- Keep Good Records
If you don't keep good records, you're probably not claiming all your allowable income tax deductions and credits. Set up a system now and use it all year. It's much easier than scrambling to find everything at tax time, only to miss items that might have saved you money.
How are you doing on the top ten list? If you're not doing at least six of the ten, resolve to make improvements. Choose one area at a time and set a goal for incorporating all ten into your lifestyle.
If you have any questions about your finances, please call your broker, or Cheyne in our Head Office.