4 Common Sense Financial Tips To Make Your Money Work For You
Good personal finance skills are important but this seemingly simple concept can be difficult to master. Without knowing how to manage your money effectively, you run the risk of making financial mistakes that could significantly impact your life.
Avoid money traps and manage your finances better with the following common sense financial tips.
1. Not all ‘tax effective’ investments are good investments.
The term ‘tax effective’ is used loosely and sometimes, such investments grow so poorly that the benefits of the tax deduction may not make up for the downsides. So when choosing where to invest your money, it is important to not automatically go for what is claimed as ‘tax effective’. Instead choose an asset that is likely to appreciate over time. You may wish to discuss this with us before making a big investment. Together we can weigh up the potential growth and tax benefits or implications.
2. Don’t buy a property or asset until you’ve crunched the numbers and understood them.
Before buying a property or other assets, it pays to look at the finer details. Make sure you or have studied the numbers and are confident in the benefits for your individual situation. While there are there are a range of online calculators you can use, these tools are only useful if you know what to put into it.
Big financial decisions should never be made without a full assessment of your financial position. This should be a conversation with your accountant to look at your unique situation in collaboration with a financial advisor who can provide advice to guide you on your investments. Consultations with financial experts are part of your investment. Your aim should be to get the best advice for your circumstances to minimise your risk and maximise your growth potential.
3. Disposable income and financial competency are two different things.
Earning a high salary is not the same as having good financial practices. In some cases, people earn so much that they don’t realise the impacts of their terrible financial habits.
Take time to look at your financial habits. Are there areas where you can improve? For businesses, having a clear view of where your income goes can be achieved through effective bookkeeping and fully utilising accounting software such as Xero to manage your finances. We provide assistance with set up and use of Xero through to full service bookkeeping and quarterly reports. The benefit of this can help you understand your finances better and identify where you could improve your spending and investment for future prosperity.
In terms of personal finances, it may surprise you how much is spent on consumables. Money falling into an abyss that could be redirected into securing your financial future. Start keeping track, if you need assistance, give us a call.
4. Make sure you have the cash flow to sustain an investment before you push through with it.
If you can’t afford the principal and interest in a property with your current financial position and cash flow, you might want to reconsider the purchase. When you run the numbers, make sure that you consider both the principal and the interest. Pushing through with an investment you can’t afford is not only high risk, but can also cause you a lot of stress in the long run. Again, getting the right advide befpore diving into shallow water is key. That is what we are here for. We work with joint venture Partner Vertex who can also assist you with finding the right loan for you.
5. Afraid how much all this advice will cost?
Do you know we offer fix-fee accounting services where you can choose which services you will need. Fixed-fee services include free regular calls to us to ask questions. We really recommend clients fully utilise this included service and call to ask the questions at the time they need the advice. This leads to better decision making, fewer bookkeeping errors by business operators and better financial outcomes.
To find our more about fixed fee packages, speak with Directors Simon Terry and Jodi Bradley.
Let us help you make better financial decisions…
It is all about making your money work for you. Get in touch with us today.