WEALTH HUB JOURNAL

Falling Behind on Your Savings? Here’s What to Do

If you feel like you’re always falling short of your financial goals, you aren’t alone. And comparing your savings account to the average Australian, who has $28,426 in cash savings, can make you feel worse about your situation if you’re behind the curve. Add to that the recent hit most of us have taken due to the pandemic, and it’s understandable that you’d feel less than satisfied with your financial situation.

Basic expenses like paying rent, buying food, and keeping up with your bills—not to mention long-term goals like buying real estate, building wealth, and retiring successfully—can be a source of constant anxiety. If you’re tired of these headaches, let’s look at what you can do today to get control of your finances and finally get ahead.

1. Create a Budget

If you aren’t tracking your spending, you may be surprised where your money is going. Skipping the lattes may not slingshot you to financial independence, but making smarter money decisions across the board can give your finances a significant boost.

While 86% of Australians don’t know their monthly expenses, you don’t have to be one of them. Be proactive and track your earnings and expenses so you never have to dread checking your account balance and you can regain control of your finances.

To incentivise yourself, set small (achievable!) financial goals, like saving enough to add curtains to the back bedroom or get the crack in your windscreen repaired. You’ll find these small ways of improving your life are much more rewarding than letting your paycheck mysteriously slip through your fingers.

2. Find Ways to Cut Expenses

The aforementioned lattes aren’t ruining your financial future, but opting for an overpriced cup of joe every day instead of brewing a pot before work can take a toll on your weekly expenses. And so can meals out—the average Australian spends $44 per week on restaurant meals while a fridge full of produce wilts at home.

3. Shrink Your Tax Liability

Tax law is always changing, and it’s difficult to navigate its complexities and ensure you’re claiming the maximum deductions you’re entitled to. Leveraging a salary sacrificing package, offsetting your mortgage, claiming eligible charitable donations, and setting up a self-managed super fund (SMSF) are just a few of the ways you can cut your tax liability down to size.

The professional team at Wealth Hub Australia can guide you through these strategies to make the most of deductions and tax breaks so you can keep money that’s rightfully yours.

 4. Allow a Cushion for Emergencies

Set aside some cash in a high-yield savings account for little—or not-so-little—expenses that will inevitably blindside you. Tires blow out, batteries die, people slip and break their arms. Creating a financial buffer between you and these little disasters will mitigate the damage to your financial plan and help you stay on track.

Triple your total monthly expenses, and that’s how much you should set aside. This amount will likely be enough to bridge the gap if you or your spouse are suddenly out of work—without exacerbating your stress or tempting you to dip into your super fund prematurely.

The Bottom Line

It is possible to achieve your financial goals. These simple steps can help you get on track, but to really attack the gap between where you are and where you want to be, contact our team at Wealth Hub Australia today. Our network of qualified advisors will help you create a financial plan that will put your dreams within reach.

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