When it comes to financial planning, it is essential to take small steps towards getting your affairs in order.
Although it can seem a daunting task at first, the truth is that coming up with a financial plan may be a lot easier than you think.
There are various ways of doing this, but enlisting the expertise of a financial planning adviser is a good idea, as they can assess your situation and suggest the best course of action.
Set financial goals
Many people have financial goals that they want to reach at some point in their lifetime – knowing what they are is the first step towards formulating a good plan.
For example, you may wish to buy a house by a certain age, or want to have a certain amount in your superannuation fund when you retire.
These are not goals that will achieve themselves – by establishing a financial plan as early as possible, you can increase your chances of being able to meet them.
Manage cash flow
Of course, in order to reach the objectives you have set yourself, it is essential that you keep an eye on spending.
Having a cash flow management plan is a great way of achieving this, as it means you can see exactly what your outgoings are and where changes can be made.
It might be that you find some areas of unnecessary expenditure that can be cut back on, in which case working on these will move you one step closer to achieving your goals.
Working out how you can become more tax-efficient is a good way of boosting your savings for the future.
This may involve restructuring investments or taking advantage of entitlements – a financial advisor will be best placed to give guidance on this.
Establish who you want to support
A major consideration for financial planning will be your loved ones and who you want to support later in life.
As demographics change across Australia, this is becoming more important than ever – it is increasingly common for people to be looking after elderly relatives at the same time as their grown-up children.
Some financial plans take into account the cost of aged care, which can be a big worry for people during retirement.
By thinking about this early on, you can make financial provisions for your care arrangements and support your family when the time comes for you to need professional care.
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.