Marie Kondo your money
Marie Kondo’s principles of tidying aren’t just for your closets, cupboards and the kitchen pantry! The Japanese decluttering expert has made a name for herself with the KonMari method which revolves around discarding personal items that no longer spark joy. She suggests only keeping those things that speak to the heart. Thank them for their service – then let them go. We’ve taken some of her ideas, overlayed some of the more common financial manifestations we see and proudly present, the Muirfield financial spring clean!
Start small
Get the easy stuff out of the way first. Kondo asks her clients to gather all their clothing and pile it in one spot for a clear view of everything they own. When it comes to money matters, that’s likely to be as simple as understanding what you own, what you earn, and what you owe.
It can be quite an eye-opener. You may discover multiple super accounts, an unnecessary number of bank accounts, multiple insurances (all charging fees) and uncompetitive interest rates on borrowings.
Useful tip: A dollar saved is a dollar earned. Shop around when you receive statements or renewal notices. Moving to a single transaction account can help you stay on top of your money and save on fees, as can consolidating your super.
Create a financial plan
As the adage goes, failing to plan is planning to fail. Having a financial plan might seem obvious but only one in five Australians seek advice when putting together a financial plan. Committing time to create a plan is a great first step. If you procrastinate, you’ll never get around to it. Before you kick off, think about where you are today, how you got here and where you want to go. Imagining your ideal financial life allows you to see the gap between what you have now and what you’d like to obtain in the future. This can also serve as useful motivation and help you clarify your goals.
Useful tip: It is always best to start thinking about the life you want rather than the numbers that might support it. Don’t let complexity or calculations confuse what’s really important to you. It is also worth evaluating how you want to live your life and ensuring your partner or family is on the same page.
Those who take the time to map it out are more likely to develop confidence about their financial futures and make efforts to practice positive financial behaviours, like saving money regularly, managing debt, and making the most of tax and Centrelink concessions.
Categorise your dreams
Looking at your financial needs in terms of four key categories — living, lifestyle, contingency and legacy — can help you better understand your own investment and financial goals.
Useful tip: Using these key categories as building blocks can provide you with an investment framework that is more likely to deliver outcomes that are aligned to your goals. This can be done by identifying appropriate investments for each of the four categories and how different investments might be needed to provide either capital preservation, a regular income stream or asset growth over time.
Chase the joy
Work out what brings you joy and allocate your financial resources to get more of it. This is important when considering how you spend your money – what you’re saving for, who you’re saving for, how much money is needed to make your dreams a reality. There is no joy in being fat, filthy rich and unfulfilled. Spend time, energy and money on those you love, including yourself.
Useful tip: Money doesn’t create happiness. It gives you choices. The more you have, the broader your options tend to be.
Find a trusted and qualified second opinion
Over 30 years we’ve developed significant expertise and a reputation as a trusted source of advice and service. In our office, there is no such thing as a dumb question.
Our process seeks to understand you, your family, and your financial aspirations. An adviser can help you assess your options and make a financial plan to achieve your financial goals. We also believe it is important to check progress and regularly meet to ensure you stay on track.
In an unnecessarily complex world we try to keep things simple for you.
Useful tip: As experts in financial management, we spend more time encouraging clients to enjoy their wealth than we do reigning them in. So, you shouldn’t fear financial advisers whacking you with a stick! Take that holiday you’ve dreamed about, and then take another! Over time you can lose your passion for travel, pampering and adventure, or worse still, your ability to do so.