Sunday 21 April 2024

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Contact 1800 772 679

The magazine of the Public Service Association of NSW and the Community and Public Sector Union (NSW Branch)

The Smart Way To Get Your Finances Back On Track

The Smart Way To Get Your Finances Back On Track

When it comes to getting your finances under control as cost- of-living pressures persist, Aware Super recommends a few simple steps.

It’s mid-autumn, your summer holiday has all but faded from memory, and with it, that vow you made to get on top of your finances.

Don’t let the vow fade.

With inflation still uncomfortably high and some lingering clouds on the economic horizon, if ever there were a year to keep the vow, this is it – and your superannuation is a good place to start.

According to research commissioned by major super fund Aware Super, almost nine in every 10 Australians (86 per cent) entered the New Year worried about the effect of the cost-of-living crisis on their finances.

The polling also found 71 per cent of Australians were specifically concerned about the possibility of the economy slipping into recession this year.

Clinical psychologist Dr Carly Reid said financial stress can lead to negative self-talk, feeling overwhelmed and out of control, or even feeling resentful of your situation.

Dr Reid said many people feel compelled to change an aspect of their lives at a temporal milestone, the biggest of which is the start of a new year – however, most resolutions are destined to fail without a realistic plan in place.

No matter how motivated we are to reach our goals at the start of the year, resolutions can fall over if they become too daunting or overwhelming to tackle, she said.

“With the continued cost of living pressures, getting our personal finances in order is one key resolution that really is worth sticking to, because for good or bad, our financial confidence impacts multiple areas of our lives every single day, including our relationships and our mental health and well-being,” said Dr Reid.

Aware Super’s Group Executive Member Growth, Steve Travis, said you shouldn’t lose hope if you’ve slipped off track with your financial resolutions, but instead refocus on some simple, achievable goals.

“There’s so much more to life than worrying about money, but we know that all our members are really feeling the pressure of recent trends in inflation and interest rate rises.

“It’s completely reasonable to feel as though it’s all too hard, but we know from talking to thousands of our members that feeling confident that we’re on top of our finances is a crucial aspect of achieving peace of mind and reducing financial-related stress.”

Mr Travis said the key to ensuring you achieve your goals and become financially refocused in 2024 is to keep your goals simple – and SMART:

  • (S)pecific. Be specific by identifying

areas for improvement in your finances that allow you to set specific goals and priorities. For example, do you need to focus first on reducing debt, or are you able to commit to growing your wealth? Super is an easy place to start setting specific goals – you can aim to invest an exact dollar figure annually or consider salary sacrificing with your employer to contribute pre-tax income to your super account.

  • (M)easurable. Understanding how to measure success makes it even more motivating to achieve. For example, if the goal is to contact your fund and book in an appointment to speak with a super expert about your super, it’s easy to tick it off when you do.
  • (A)chievable. Rome wasn’t built in a day, and your financial freedom won’t be either. Start with steps that won’t overwhelm you – for example if you have three credit cards, commit to paying off one of them in full first. If you’re thinking about building your super, consistent small contributions or contacting your fund to ensure you’re in the right investment strategy to suit your stage of life is achievable for even the busiest of busy people if it’s prioritised.
  • (R)elevant. While everyone’s financial situation is different, the great thing you can rely on from your super is it’s always there in the background. So even if your immediate focus is on managing debt or paying school fees, your super is still growing away in the background for you. Make a small goal – of logging into your super account or setting up time with a super expert to talk about your fund – fit into the bigger picture of improving your financial fitness over the year.
  • (T)imely. Achieving goals requires a small degree of dedication. Adding a deadline such as “making monthly personal contributions” or “logging into My Retirement Planner twice a year” keeps you accountable.

“It’s never too early to get in contact with your fund to help you achieve your financial goals, whether you’re two or twenty years away from retiring,” said Mr Travis.

“What’s most important is to make a start. Understand what’s most important to you, and remember that your super is always there in the background, working hard for you over the long term – so you can focus on those financial decisions that will give you the greatest confidence.”

Australians can learn more about how to maximise their super by downloading the Aware Super Helpful Guide for free from the Aware website.

Supplied by Aware Super Pty Ltd, Trustee of Aware Super. This is general information only. Before taking any action, please consider your own circumstances and consider getting advice to make sure it is appropriate for you. Please also look at the relevant Product Disclosure Statement.

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