At PB&F we are passionate about helping our clients better understand their personal financial position and what their future might look like. WHY??? We’ve seen firsthand what happens when things go wrong, and without a clear understanding of where you are and how you are tracking, it’s really easy to end up in trouble.
A survey last week showed that one in four of Australian families have less than $1,000 in cash savings. What happens to these guys when something doesn’t go according to plan? Couple this with the fact that as a nation, we rank highest in terms of personal debt and we’ve got a problem. It’s just not sustainable, particularly at a family level.
We’ve all experienced it, you’ve just paid for that long-awaited holiday, the bank balance isn’t looking great and BHAM! the car breaks down, or one of the kids need braces, or the dog has an emergency trip to the vet… you get the picture. Some call this Murphy’s law, but in reality, there’s never a good time for unexpected outlays. So how do you structure your finances to ensure smooth sailing during these rough periods?
In business, we call it working capital. Scott Pape, the Barefoot Investor, calls it a Mojo account. Whatever you call it, having something set aside to ease that burden is important. We don’t care how you do it, the mechanics will be a little different for everyone, but what we do care about is having conversations with our clients about these really common issues and empowering them to be able to deal with them if, and when, they arise.
I’m sure many of you have experienced how physically and mentally draining money pressures can be, either personally or through someone you know. Unfortunately, we generally face these challenges alone, because we don’t like talking about money! In today’s society, where these pressures can quickly become something more sinister, we need to remove the taboo around money talk.
So, what can you do? Start by being honest with yourself about your finances and then have the conversation with others. Here are some starter questions for you to consider and discuss with those closest to you:
- How do you manage your money?
- How do you have your bank facilities set up?
- What percentage of your weekly wage do you spend on essentials?
- How do you track progress towards your goals?
- Do you talk about these goals with your loved ones, and if so, how and when?
- How do you track the performance of your superannuation and/or other investments?
- At what age do you think you’ll be able to retire? And what do you want to do once that happens?
Let’s start talking about money and remove the stigma of it. If we can help one of our friends to improve their situation, wouldn’t that be wonderful? And I bet you will get something out of it too!
If you, or someone you know, are having troubles with money, we would love to show you how we can help. Book a free initial meeting with PB&F today.