Having good personal finance skills is essential in life, but this seemingly simple concept can be challenging to master. Without a good idea of managing your money effectively, or common sense financial tips, you will run the risk of making financial mistakes that could drastically impact your life.
Avoid money traps and help manage your finances better with the following financial tips.
Not all ‘tax effective’ investments are good investments.
‘Tax effective’ is a loosely used term, and sometimes, such investments grow so slowly that the benefits of the tax deduction don’t always make up for the downsides. So when deciding where to invest your money, it is important to not automatically go for what is claimed as ‘tax effective’ but instead choose an asset that is likely to grow over time.
Don’t buy property or assets until you’ve understood and crunched the numbers.
Before buying a property or other assets, it’s worthwhile looking at the finer details. Please make sure you or have crunched the numbers and are confident in how it benefits your situation. There is a range of online calculators that you can use. However, these tools are only helpful if you know what figures to put into them.
A better approach is to work with a financial advisor who will take the time to make sure they understand your unique situation and guide you on your investments or how you can make money.
Financial competency and disposable income are two different things.
Earning a high wage is not the same as having good financial practices. In some cases, people can earn so much that they don’t even realise the impacts of their terrible financial habits.
Make sure you take the time to look at your financial habits to see if there are areas where you can improve. A financial advisor can also help you to adopt productive habits and spend your money more wisely. There are heaps of apps and online tools available to help you stay on top of your finances and better handle your money.
Ensure you have the cash flow to sustain an investment before you push on with it.
If you can’t afford the principal and interest in the property you are planning to acquire with your current financial position, it may not be the right time for you. When you run the numbers, make sure you consider both the interest and the principal. Pushing through with an investment that you can’t afford is not only high risk but can also cause you a lot of heartache and stress in the long run.
Let us help you make better financial decisions…
We know how hard you have to work to earn enough for you and your family’s needs. Our Accountants can help you find tailored solutions to suit your needs or point you in the right direction. Ultimately, it’s about making your hard-earned money work for you and your family. Get in touch with us today, and let us help you to achieve the lifestyle you’ve always wanted or Join the Conversation…