Supercharge your savings: Should you be putting away more?
It can be tough to put future-you's needs ahead of what you want in the present. A feast at Burger Burger, some flash new clothes or a big night out all seem like a far better way to spend your money right now. Future-you will be fine right?
Absolutely – but only if you put a plan in place to make sure of it. If you devise a smart investment and savings strategy now you can still enjoy little luxuries and your Friday work drinks. Most importantly, you'll be able to enjoy them later in life too.
All that's required is a few little changes.
What's the average Kiwi like at saving?
Kiwis are fairly sharp when it comes to money, a MasterCard Asia Pacific survey found. We ranked first ahead of Singapore, and Australia in overall financial literacy, as well as basic money management, financial planning and Investment.
We ranked first ahead of Singapore, and Australia in overall financial literacy, as well as basic money management, financial planning and Investment.
But there are still improvements that can be made. In 2016 Reserve Bank data shows that household savings actually decreased by $876,000,000 in total, or around $500 per household. That's a step in the wrong direction and one that could cost us all if we continue as we are.
The first step towards changing our behaviour is setting a goal to work up to. But what should that goal look like?
What amount do we really need?
The ultimate goal for any saver should be to set themselves up for retirement. At the end of a life of hard work you certainly deserve a decade or so with your feet up!
Westpac estimates that you'll need to own your own home and an extra $83,859 on top of your pension to live a simple no frills lifestyle when you retire. That means no sirloin steak in the supermarket trolley, no trips overseas and hand washing your dishes for the rest of your life.
If that sounds like a bad time, you'll want to aim for a more comfortable lifestyle in retirement. Westpac estimates you'll need to own your own home and have a lump sum of $295,000 to do so – if you have expensive tastes you're likely to need even more.
That goal may seem to far off to really motivate so what you need now is a step by step financial plan, complete with smaller goals that eventually lead to retirement in the lap of luxury.
Every financial plan should be different according to what stage of your life you're in, what your income is and what your expectations are.
What will my plan look like?
Every financial plan should be different according to what stage of your life you're in, what your income is and what your expectations are. But a great place to start for anyone is getting bad debt like credit cards and personal loans off your back.
From that point it's time to optimise your Kiwisaver, before buying property and taking steps to grow your wealth. That's exactly what the expert team at Goodlife Financial Advice can help you with.
We know better than most how hard saving for the future can be and we're experts in creating a detailed and actionable plan that can make it far easier.
Here's to your financial independence!
Authorised Financial Adviser / Investment Property Specialist
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