How to set yourself up for financial freedom
According to a recent study, one in five Australians aren’t satisfied with their current financial situation. But just because you’re grinding right now, doesn’t mean it always has to be this way.
Here are five easy things you can start now to future-proof your finances and set you up for financial freedom in the future.
1. Start saving for the bigger picture
No matter the big life goals you’ve set your sights on for the future – starting your own business, moving overseas, buying your dream home – the advice is the same: Just start.
Instead of only beginning to save when you’re ready to tackle your life plans, imagine if you’d been putting away a small amount since you got your first job.
Now, imagine that small amount was in a high interest savings account that you never touched. All your other savings goals could come and go, like those European summer holidays with your bestie, that new car, all those must-have purchases – but that savings account just keeps building over time, until one day when you’re ready to make it your one and only savings goal – you already have a head start.
Putting your savings into perspective
If you put just $50 away a week, over 5 years you’d have $13,000 – and that’s not including any interest you might get from your account. That kind of passive savings is both a financial and mental leg-up towards your goal when the time comes to act on it.
2. Keep an eye on your credit score
Your credit score is a number between 0 and 1,200 that indicates how reliable you are with paying back credit. It’s an incredibly important number that can dictate your approval for a phone plan, credit card, or even a home loan.
The higher the number, the more trustworthy you appear to lenders and the more likely you are to have a credit application approved.
Why your credit score is important
Information stays on your credit report for as long as five years and can even impact your access to necessary utilities like power or water if it’s too low. For this reason, it’s important to be aware of how some decisions may impact your score. Things like applying for multiple credit cards or loans in a short space of time, late loan or credit repayments, even regular missed repayments on some buy now, pay later services can affect your score in the long run.
On the flipside, good habits like regularly paying bills on time, paying more than the minimum monthly payment on credit cards, and proof of regular savings activities all lend themselves to a nice, high credit score rating.
3. Consider investing money to make more money
Investing isn’t just for the uber rich or tech savvy. In fact, it can be the step that leads you towards future wealth. And the sooner you start, the sooner you can benefit from compounding returns.
Don't worry what the internet tells you, it’s not all BitCoin and NFTs (although if that’s your jam – give it a go!). Historically, investments like shares and property have increased in value at a faster pace than wages or inflation. So, they offer a chance to make money with little to no effort from you.
Invest in some patience
Investing in the stock market isn’t going to make you Jeffrey Bezos rich overnight. But it’s a great way to diversify your income and investment streams, which is perfect for future-proofing your finances. With a bit of research, find out what works best for you and your goals, and look for low-cost ways to grow your investments.
4. Show your super some love
For most of us, superannuation is a set-and-forget type of investment. But when managed properly, you can ensure you’re setting yourself up for financial freedom.
Start by checking whether you have multiple super funds, and consolidating them into one place. Get to know your current fund a little better, do a bit of research to see if you’re happy with your fund’s benefits, check you aren’t paying too much in fees, and you’re comfortable with how your money is being invested.
Make an active contribution to your future
Did you know you can make voluntary payments to your superannuation fund? Even small extra contributions can make an impressive difference to the value of your super savings over time. This is an important consideration for women, who typically have 23% less super than men.[1] Check with your super fund if there is a limit to how much you can voluntarily contribute, and how you can make a start.
5. Look after yourself
While the most logical ways to plan for financial freedom are wrapped up in how you manage your money – looking after yourself will be the biggest financial responsibility in your life. The old saying ‘prevention is better than cure’ is true, for your body and your wallet.
Invest in your health, for your future wealth
Investing in good health doesn’t need to involve the latest serums, celebrity workout, or cutting-edge technology, and it’s certainly not about staying young forever. It can be simple things like regular check-ups at the dentist, fuelling your body with nutritious food, getting aches and pains looked at when they arise, talking to someone if you’re experiencing stress or negative thoughts, and keeping active.
Prepare for your future with a myBOQ Future Saver account
If you have a myBOQ account you can download the myBOQ app which has plenty of features that can help future-proof your finances, like the option to have up to 9 separate savings accounts. So, what are you waiting for?
[1] https://www.superannuation.asn.au/media/media-releases/2022/media-release-28-february-2022#:~:text=Women%20retire%20on%20average%20with,the%20gap%20in%20super%20balances.
