4 steps to secure your fiscal future
You don’t have to be an economist to realise the cost of living isn’t getting cheaper any time soon, which is especially difficult for those of us who are on a fixed income. The good news is there are some simple measures we can take to get our finances back on track. Here are four steps, suggested by the Australian Securities and Investments Commission (ASIC), that will help move you towards a better financial future in 2017.
1. Review your finances
Miles Larbey, Senior Executive Leader for ASIC's MoneySmart, stresses the importance of reviewing your finances and setting a plan in place. Mr Larbey believes taking some time to comb through your regular sources of income as well as some of your most common expenses is the best way to, “Work out your short, medium and long term financial goals and priorities and put a plan in place to achieve them in 2017.”
2. Take control of your debts
If you’re serious about getting back in the black, but have debt hanging over your shoulders it’s important to do your best to tackle it head on. The sooner you can clear a debt the better, as Mr Larbey notes, “A credit card debt of $2,000 could take you over 12 years to pay off and cost about $2,150 in interest, if you only pay the minimum repayment.”
3. Create a savings buffer
This can be difficult, especially when you’re on a fixed income, but a savings buffer is invaluable in times of emergency. As Mr Larbey says, “Having a savings buffer or emergency fund gives you breathing space to deal with life's ups and downs, and means you won't have to borrow money if something unexpected happens.”
4. Seek financial advice
Many people are reluctant to seek financial advice these days for fear of being led down the wrong track, but the right advice is invaluable. Mr Larbey says, “If you think you might need personal financial advice in 2017, for example if you are planning to retire, use ASIC's MoneySmart financial advice toolkit. It will help you navigate the financial advice process step by step, choose a financial adviser and know the questions to ask.”
Is there any extra advice you’d suggest?
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