So, you’ve created a savings plan and you’re keeping on track with your monthly payments – nice work! It can be satisfying to see the dollar amount build in your savings account, but what’s your long-term vision for your personal finances?
What are personal finances?
Personal finances are the components that make up your money management. They are income, expenses, savings, investing and protection. It’s important to have goals for your finances so you know you’re getting the most out of your money and that you’re covered for any unexpected expenses.
Breaking down income, expenses and savings
Your income and expenses refer to the money you receive and the money you spend. Generally, the bulk of your income may be spent on regular expenses such as, rent, home loan repayments, groceries, bills, entertainment and hobbies.
Being able to manage your expenses is a key skill. Spending less than you earn allows you to build savings and helps you secure a stable financial future.
Your savings is what money you have left over after your expenses. This can be used as a safety net for emergencies, to plan for future goals and to build security in your finances.
Are you protected from life’s unexpected events?
If you’ve got a handle on your income, expenses and savings, it’s time to focus on protecting yourself and your future. This includes life, health and building and contents insurance. It also includes making a will. Having these protections in place will help you in times of emergency or loss. It’s a good idea to look into different insurance options so you can get the best cover for your needs.
Creating a will isn’t the most enjoyable of tasks, but you can be at ease knowing your loved ones are looked after and your wishes are carried out.
Investing is not just stocks and bonds; it’s also planning for your retirement. Did you know you can choose different plans for your super? Researching different super funds and what ones best suit your needs can help you take control of your retirement plan.
Visit Moneysmart to find out more about managing your super.
Have you got a long-term plan?
Where do you see yourself in five- or ten-years’ time? How do you imagine your retirement?
Your future plans can help you give purpose to your money and guide you on what to do with your money.
Want to strengthen your money management skills?
Did you know, Keystart also offers a free financial coaching program with the Financial Counselling Network? Eligible customers can access free one-on-one coaching sessions to help improve your money management skills.