Why Every Household Needs an Emergency Fund
Job loss, medical bills, broken fridges—life happens. That’s why a well-structured emergency fund is one of the smartest financial moves you can make. Here’s how to get started.
Every day we are faced with questions about money. Should I spend $5 on that second cup of coffee? Should I put more of my salary towards my mortgage? Will I have enough money for a comfortable retirement? Yet despite its importance, studies show that financial literacy is low among Australians – especially among young people. In this article, we’ll look at why financial knowledge is important, and reveal how you can give yourself a solid financial education without spending a cent.
Many people underestimate the importance of a financial education. But knowing how to get the most out of your money doesn’t just help you spend and save more wisely. It can also lead to a better quality of life overall.
Here are five benefits of financial literacy:
Financial literacy equips you with the knowledge to make informed decisions about your money. Whether it’s choosing the right credit card, understanding the terms of a mortgage or deciding on investment options, a solid grasp of financial concepts can prevent costly mistakes and lead to better financial outcomes.
A recent survey by the Great Southern Bank revealed that many Australians, especially Millennials and Gen Z, rely on family and friends for financial advice. While your loved ones are well-intentioned, they may lack the expertise to steer you in the right direction. If you do your own research and consult a professional financial planner, you can take control of your finances rather than relying on family and friends for advice.
Research by the Financial Planning Association of Australia (FPA) suggests that pre-retirees receiving financial advice are twice as confident about having enough money for retirement than those who don’t. This demonstrates just how crucial financial literacy is for retirement planning. Knowing how to budget, save and invest allows you to build a nest egg for your golden years. This means you can enjoy your retirement without the fear of running out of money.
Money problems are a leading cause of stress. By improving your financial literacy, you can develop a clearer picture of your situation and learn strategies to manage your money more effectively. This can significantly reduce financial stress and give you greater peace of mind. In fact, a study by CoreData and IOOF found that 88% of Australians who received professional advice regarding their financial situation felt less stress than those who didn’t.
Financial stress can strain relationships with family and friends. You might argue about spending habits, managing debt, or saving priorities. This stress can lead to frequent fights and even breakups or divorce in severe cases. One study found that 41% of clients who received financial advice reported better relationships with family and friends. Why? Their improved financial security created a more stable and positive home environment.
You don’t necessarily need a degree to learn more about managing your money. There are plenty of fantastic resources available for free that can improve your understanding of finance and budgeting.
Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That The Poor And Middle Class Do Not! It’s a fantastic place to start, especially for beginners, and explains important financial topics in easy-to-understand terms. Another classic is The Richest Man In Babylon. Although it shares stories set in ancient times, the lessons about money and wealth are still relevant in today’s world.
Money Smart is a government website that offers free tools, tips and guidance to help Aussies take control of their money. The content is up-to-date and easy to understand, and numerous calculators can help you plan your finances too. The Poole Advisory blog is another fantastic financial resource you can use. We cover a range of topics, from beginner-friendly advice on salary sacrificing, to more advanced issues such as how to protect your family’s assets by using a trust.
Some local libraries host free workshops and seminars on financial literacy. These can be a great way to learn from experts for free. You also have the opportunity to connect with other Aussies who are interested in improving their financial knowledge.
If you’re looking for a finance podcast that’s perfect for the gym or your daily commute, you can’t go wrong with She’s On The Money or the Australian Finance Podcast. Both cover a wide variety of financial issues and provide simple, no-fuss tips on how to better manage your money.
Rask Education offers a number of financial courses via its website. They cover a range of topics such as tax planning, superannuation and investing – and most resources are either low-cost or free! Their courses have become very popular in recent years, having been completed by 27,000+ Aussies looking to improve their financial situation.
The resources we’ve outlined above are a fantastic way to improve your financial education. The only downside is they provide general information rather than advice that’s specific to your situation.
So while you might be able to find retirement planning strategies online, you won’t be able to find retirement planning strategies for someone who has 3 children, a mortgage, 2 cars, $311,400 in combined superannuation and $175,325 in debt.
That’s where a financial adviser like Poole Advisory can help. You can receive advice that’s specific to your current situation and goals, allowing you to make informed decisions and achieve financial success.
To give you an example of how financial education and advice can improve your life, here are two success stories from our clients.
A couple in their early 40s approached us for financial advice. Despite having many assets, including investment properties and superannuation funds, they lacked a clear financial strategy. Their aim was to further grow their wealth and create an effective estate plan.
We addressed their surplus cash flow through a bucketing approach, enabling them to allocate funds efficiently while reducing interest costs and increasing debt repayment. We also recommended investment bonds for tax-effective wealth growth and devised an estate plan to protect their assets and ensure their child’s inheritance. Finally, we provided tailored insurance advice, aligning their policies with their current needs and providing cost-effective protection.
The couple were over the moon with the results. They felt relieved and confident in their financial future, appreciating the clarity and security our recommendations provided.
Another couple approached us seeking holistic financial advice. With a self-managed super fund (SMSF) and substantial savings, they lacked clear investment strategies and weren’t sure which insurance to take out.
Again, we recommended a bucketing approach to manage their cash flow effectively while maximising contributions to their super funds, resulting in significant tax savings.
We also helped diversify their SMSF portfolio, reducing risk and aligning their investments with their goals. Finally, we ensured they had the necessary insurance to reduce risk and provide financial protection. The couple enjoyed a newfound peace of mind, feeling reassured that their financial affairs were in order and aligned with their goals!
If you, like these clients, want the knowledge and advice to improve your financial situation, Poole Advisory can help. We have over 20 years of experience assisting Southern Highlands residents to improve their financial situation and make more informed decisions with money. Contact us today or schedule an appointment to discuss your current situation and we’ll develop a tailored plan to achieve your goals.
This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
Job loss, medical bills, broken fridges—life happens. That’s why a well-structured emergency fund is one of the smartest financial moves you can make. Here’s how to get started.
Inflation has slowed, and economists are tipping a potential rate cut in May. But what does this mean for your mortgage, super, and investment strategy? Let’s unpack the opportunities.
Inflation is easing, but financial planning remains crucial. Learn how inflation trends affect your money and how to protect your wealth through smart investments.
Job loss, medical bills, broken fridges—life happens. That’s why a well-structured emergency fund is one of the smartest financial moves you can make. Here’s how to get started.
Inflation has slowed, and economists are tipping a potential rate cut in May. But what does this mean for your mortgage, super, and investment strategy? Let’s unpack the opportunities.