The benefits of having a financial plan and budget

As with all major events in life, having a plan will create a guideline and path for you to follow. Your financial situation is no different.

Financial planning involves assessing your current situation, identifying your assets and deficits and making sound financial decisions to improve your overall financial position. A financial planner can assist you on an ongoing basis and review your financial situation regularly to update your investments and position. They will assist you with the following:

Reviewing your financial position

By looking at your financial position, your financial planner can evaluate the time it will take for you to achieve your financial goals. They will do this by calculating:

  • How much money you have in savings
  • Analysis of your debts
  • How much money you earn and spend each year.

Are you protected for unforseen events?

Your financial planner will help you ensure you have adequate protection against unforeseen risks that may require a review or purchase/upgrade of your insurance. There are many different types of insurance that cater for many different circumstances and professions. Seeking professional advice will help you choose the best type and amount of insurance that’s right for you.

Review your tax entitlements

Income tax makes up a large part of household expenses. Tax planning can help you take advantage of available tax breaks to minimise these expenses.

Planning for major purchases

Planning ahead will help you meet your investment and accumulation goals. These goals include large purchases and investments such as buying a house, planning for a baby, education expenses and retirement savings. Your financial planner can help you set up an investment portfolio to make sure you save up enough money to pay for these purchases as quickly as possible.

Planning for retirement

Retirement planning is an important aspect of your financial plan. It will make sure you have enough money to draw upon after retirement or an unforeseen reduction in income. Your financial planner can help you calculate how much money you will need and inform you of ways to accumulate it.

Planning for your dependents

Estate planning can help ensure the wealth you have built is transferred to those you wish smoothly and tax-effectively. This needs to be considered for things like superannuation, insurance as well as property and bank accounts.

Helpful links

https://www.moneysmart.gov.au/managing-your-money

https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps