It’s never a bad idea to get financial advice but there are times when it’s particularly important.
1. Getting started – lifestyle planning
You’re starting to earn more than month-to-month survival money. A financial plan now will set you up to fund the lifestyle you want. It’s also the best time to start the ball rolling (in a modest way) toward long term retirement funding. Make life easier for yourself by putting a budget and savings plan in place and taking advantage of the amazing power of compound interest.
2. Partnering – merging lifestyles… and finances
With or without marriage, moving in with your partner is an exciting time so it’s easy to forget that it’s not just the two of you getting together. Your lifestyle (and to some extent even your relationship) will be affected by how well you merge your finances. As well as offering an objective point of view, a financial adviser can help you plan a new budget and ensure you have the right insurances in place.
3. Buying a home – or planning to…
Buying a home is the biggest investment most of us make and a massive challenge especially with Australian property prices at record levels. An adviser can help you create a plan to save for a deposit, then later help you choose a mortgage and manage your repayments. Perhaps just as importantly, they will help keep you on track toward your other financial goals… so you’re not just a slave to your mortgage.
4. Kids – a huge responsibility
Kids bring huge joy but also great responsibility so it may be worth doing a financial stock-take. Kids will have a big impact on your earning capacity as you juggle looking after the kids with work. They’ll also be a major factor in choosing a home to rent or buy, and it’ll be time to start thinking about income protection and life insurance, health costs, and estate planning.
5. Career changes
“As a rule of thumb, 60% of the jobs 10 years from now haven’t been invented yet,” so say futurists. That may be an exaggeration but the days of “a job for life” are largely gone. If you’re contemplating a big change – or it’s forced upon you – an adviser can help you deal with the financial implications, particularly managing redundancy payments and superannuation.
The end of a relationship is generally an emotionally traumatic time, definitely a time to enlist support to help get your life back on track. Your adviser can help you secure your immediate finances (including debt, insurances, rent, and utilities) and manage the split of your shared assets with your ex-partner (including super and the family home). They can also help you to adjust your finances to suit your new situation.
7. Retirement on the horizon
As retirement approaches, you may want to discuss a transition to retirement strategy so you can spend less time in the office and more time at home. Maybe you’re starting to think about traveling, volunteering or downsizing to cheaper, more manageable accommodation? Or you may want to become your own boss. This is a good time to review your finances and make some decisions, so you can retire (or semi-retire) in comfort.
Should you be lucky enough to inherit a substantial amount, or earn a chunky bonus from your employer… or even win at lotto… make sure you get good advice – conservative advice. As the old saying goes, “when you have nothing, risk it all but when you have it all, risk nothing”. Don’t go crazy with it. Tuck it away (well, most of it) and use it to change the rest of your life.