Some young people have something of a blasé approach to financial planning – they think it is something that can be put off until they are older.
However, the fact is that the sooner you start putting together a financial plan the better, otherwise you could find yourself struggling for cash later in life.
Instilling good financial habits as early as possible is essential if you are going to live securely in years to come.
Am I too young?
It is a good idea to make sure that people understand financial issues from the outset, as this will encourage favourable habits later on.
When it comes to putting together a financial plan, there really is no simple answer as to when you should start thinking about it.
For some people, a significant life event will spur them on to think about their future – it might be that they have just finished university, are buying their first home or are thinking of getting married.
It will all depend on your personal situation, but make sure you don’t wait around too long – be proactive and you can start reaping the rewards much sooner than being inert.
What is the point in a financial plan?
A financial plan gives you certain goals to work towards, while also giving you some backup if you suddenly find yourself without an income.
Imagine if you or your partner could not work due to illness or injury, would you have enough money to be able to support each other?
If you make provisions for the future then there is one less worry to be concerned with, freeing your mind to deal with whatever other issues you are facing.
Where should I invest?
This is another question that will depend on your circumstances – speaking to a financial planner is a good way to decide where your money would be most effective.
Your investments will depend on how much money you have and the level of risk you are willing to take. Without knowing this information, it will be difficult to put together a sound financial plan.
It might be that you choose to invest in cash, or would rather opt for stocks and shares – the decision is really up to you, but you may need advice from a professional to point you in the right direction.
ipac is one of Australia’s largest financial advisory firms and has offices based across the country. A wholly-owned subsidiary of the AMP Group, ipac specialises in research and financial advice that helps clients lead happier, more fulfilling lives.