- Earn more than you spend
- Have an emergency fund
- Identify your financial goals then make a plan of how and when you will achieve them
- Identify your strengths and weaknesses in your financial behaviour, i.e.: spender/saver
- If finances are not your thing, find help or education
A key to success in life is having control of your finances. If you achieve this, you are likely to feel financially healthier, reduce stress and be on your way to having a wealthier future.
Earn more than you spend or spend less than you earn. It seems obvious either way! Last year on average, New Zealanders spent $1.05 for every dollar they earned. Thus, many Kiwis are going backwards, so how can we become more financially resilient?
It’s time to get back to basic principles behind wealth: Planning well, living below your means, saving a small part of your income, investing wisely and protecting your wealth.
Planning well starts with a budget – whether you use the envelope system or a phone app, a budget is the most important tool you can use to spend less and save more. Saving a small part of your income for your financial future, even if it is only KiwiSaver. Investing this money wisely is where a wealthier future begins.
Having an Emergency Fund: A reserve of money to fall back on when difficulties arise and, financially, times are tough. A good amount to set aside is what you would currently spend to replace your car if needed.
The benefits to building an emergency fund are limitless. Scott Pape (The Barefoot Investor) calls this your ‘Mojo’ fund, it is a good description, not only are the benefits tangible but mentally your well-being is set to benefit greatly. Anxiety that often brews in time of financial difficulties will be significantly reduced.
For further help or advice on financial planning, please feel free to contact your adviser.
