Last week I had a call from a colleague and friend, let’s call him Henry (not his real name). Henry is a financial planner working in suburban Sydney. For the past couple of years, Henry has been invited to speak at a Men’s Breakfast in his local community. His invitation generally coincides with the approach to the end of the financial year. His audience is keen to hear all the tips and traps that might make tax time a little more tolerable.

Last year there was a lot of talk about the new super due to commence on 1 July 2017, and the opportunities to take action before the end of the financial year which capitalised on the ‘old regime’.

But this year, things are a little quieter.

So, I got to thinking – what are the things that groups of men or women, aged from 40 through to their 60’s need to hear? Notice I said ‘need to hear’, not ‘want to hear’.

After giving this some thought, I came up with a list of things people need to hear when it comes to managing their personal financial future.

Here is my list – what does your list look like?

1. Get rid of debt – starting with the credit cards first, then followed by any personal loans, car loans and the mortgage. Start with the loan with the highest interest rate. When the debts are paid off, don’t be tempted to ‘upsize’ and rush out to borrow more, even though the financiers will be all over you like a rash with very sweet deals and ‘unbelievable offers’. Borrowing money is great for their business – not for you.
2. Renegotiate your home loan – interest rates are at record lows. If you are able to get a better deal, use the ‘savings’ to accelerate your loan repayments. If you are paid fortnightly, arrange to repay your mortgage fortnightly. It actually saves a lot of money over time.
3. Prepare and stick to a realistic budget. If you have a family, both partners must be committed to achieving the outcome. Involve your children in the budgeting process – it will be the best lesson they might ever receive that isn’t being taught in schools. And, as a family enjoy rewards when you achieve small goals. Make achieving goals a game for the family.
4. There are lots of great apps for budgeting these days. Look at apps that allow small spends to be rounded up (e.g. Raiz). Use the savings to pay off debt more quickly.
5. Aim to save 20% of net your income. Live off 80% of your income. Part of the 20% should be contributed to super as extra contributions and the remainder should be put into a separate account (with a different bank). This is for serious emergencies (not next year’s holiday!). Ideally, the emergency fund should be adequate to cover three months living expenses. If you had to take a forced pay-cut of 20%, it would be tough – for a month or two. Then you would adjust your spending and would adapt surprisingly well.
6. Review your super. Are the investments appropriate, is insurance cover adequate, and how much are you paying in fees? Review death benefit nominations to ensure they remain relevant.
7. Consider holding non-super investments and savings in the name of the lower taxpayer. But watch out for capital gains tax implications if changing the name existing investments are held in. Get rich slowly. Chasing the latest fad or new idea is probably a recipe for disaster. Don’t ‘gamble’ with money you can ill-afford to lose.

1. Love your job. Retirement, as we know it, is changing and many of us will need to remain working much longer than we might have planned if we are to enjoy the lifestyle we aspire to. Punctuate work with ‘mini-retirements’ – extended breaks of a month, or two, or three – but then return to work. It will top up income and working will contribute to positive mental well-being.
2. Read some really good books including ’The Richest Man in Babylon’, ‘Think and Grow Rich’, ‘The Monk Who Sold His Ferrari’, and many more. These are classics that have been around for years but their lessons are as appropriate today as they were when first published.

And a bonus tip!

1. Eat good quality healthy fresh food. Cut out processed food, sugars and fats, and get a moderate dose of exercise.

Not only will you feel much better as a result, but your body will function far more efficiently and you will save on medical bills. But, if you do have any health concerns, get appropriate advice sooner rather than later. As they say, ‘prevention is better (and cheaper!) than cure’.

So, this is my top ten list (plus a bonus!) of things to think about.

What does your list look like? Do you have other ideas or tips that work for you? If so, please share them by making a comment.

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