As many of you know, I have a passion for gardening and when our girls were very young, I taught them a simple ‘gardening’ analogy for managing their pocket money which has now translated into their adult lives. They would have three bank accounts set up:
- Sow – a bank account that they would regularly deposit a small percentage of their pocket, casual job or birthday money for a special occasion. e.g., buy birthday presents, holiday spending money etc.
- Mow – a bank account that they would regularly deposit a small percentage of their pocket, casual job or birthday money that they could access for lollies, movies, special treats with friends etc.
- Grow – a bank account that they would regularly deposit a small percentage of their pocket, casual job or birthday money for long-term purchases such as a car, investment portfolio etc.
This simple money management strategy has allowed them to budget and manage their own money at a very early stage and has given them the tools to develop financial independence.
As adults, our financial independence is something we should all strive to achieve as soon as possible because the reliance on the government for a pension to surviving will only lead to limited enjoyment opportunities and a constant battle to make ends meet with cost-of-living pressures.
Over the years, we have seen many people with good intentions commence an investment without understanding the right foundations for financial security. And when a life event or something like COVID comes along, and they lose their job, get sick and can’t work, or just want options to make choices – they haven’t any.
- They haven’t got strategies in place to protect what they’ve worked hard to accumulate.
- They haven’t got strategies in place to keep the bills and the mortgage paid.
- They haven’t got strategies in place to remodel their home to accommodate their disability or to pay for overseas special medical treatment to prolong their life.
We have seen horror stories where some have been forced to sell their family home, sell their investments at fire sale values, or tap into their superannuation – all choices they ultimately did not want to make.
With ‘my financial planner’s hat on‘, having the following 5 plans in place, will enable you to have more financial peace of mind and greater financial security to cope with the twists and turns of life’s journey.
- Rainy Day Plan
An emergency fund which only gets accessed in times of financial stress such as loss of income, hot water service replacement or medical emergency. The funds are not easily accessible and could also sit in a Home Loan Offset Account to help pay down your mortgage more quickly too.
- Everyday Plan
An everyday living fund that pays for haircuts, kids’ sports, school fees, petrol, groceries and holidays – all those things that we pay for to live each day. The trick is to make it stretch and not dip into the other plans to top it up!
- Protection Plan
A plan to minimise the risk of life events occurring – insuring our home and contents, cars, and personal insurance like income protection, key-person, business, life, trauma and disablement and private health all have a role in protecting our income, our family, our home, our business and ourselves.
- Retirement Plan
Many business owners consider their businesses to be their superannuation but unless you regularly contribute to a fund and commit to this investment in your future, a life event may force you to close and wipe away the value of your business.
If you have suffered the misfortune of a forced business closure, your superannuation can be protected against bankruptcy and creditors looking to get paid. Superannuation is tax-deductible and there are currently some really significant and generous superannuation concessions that can dramatically increase our retirement balances.
- Legacy Plan
Make sure you can direct where you want your estate to go instead of leaving it up to others to make those decisions for you that you otherwise would not have made. Develop an estate plan with wills, powers of attorney and special superannuation or testamentary trusts that hold your health directives and wishes for organ donations or end of life.
Having strategies and control over our financial security allows us to lead a stress-free life with the freedom to choose the lifestyle we want and achieve the dreams we are chasing.
Without these 5 plans, you are exposed to the risk of financial insecurity and a lifestyle dependent on the Government pension.
Contact Angela on 55612643 if you would like to find out more about building your financial security plans today!
General advice disclaimer
The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product. Only financial planning advice provided by CeebeksTM Financial Solutions is associated with InterPrac Financial Planning Pty Ltd ASFL 246638. Christopher Beks (Authorised Representative no. 231937) is a director of CeebeksTM Financial Solutions (Authorised Representative no. 344518) and an Authorised Representative of InterPrac Financial Planning Pty Ltd ASFL 246638 and is authorised to provide personal financial advice. Chris Beks operates under Beks and Associates Pty Ltd, Corporate Authorised Representative No. 344518.
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