The key to keeping on top of your finances is to create a forward-looking budget and regularly review it, according to LDB senior financial planner Tim O’Loughlin.
Mr O’Loughlin said having a solid budget in place could help people to avoid living beyond their means and overspending.
His advice comes in the wake of alarming new figures released by the Commonwealth Bank, which showed one in three Australians were spending more than they earned on a monthly basis.
The bank’s survey also found about 56 per cent of people would not have the cash to survive if they lost their job, with one in three households unable to muster up $500 in an emergency.
“People think that having a budget is about trying to restrict spending, but often when people speak with a financial planner, it’s not designed to restrict spending, it’s designed to try to ensure people live within their means,” Mr O’Loughlin said.
“One of the big items that we see for most people that they aren’t aware of is how much they spend in certain areas, particularly with regards to entertainment.
“For example, the amount of money a couple might spend on coffees each week… it’s a couple of dollars and you might have one or two cups a day, but it significantly adds up and might be $3,000 to $5,000 over the course of the year.”
Mr O’Loughlin said LDB could help clients to separate the necessities from the luxuries, and use the surplus wisely.
“What we help clients to do is identify a system that allows them to enjoy their life, without feeling they need to compromise,” he said.
“Our role is to guide clients about what to do with the spare income they have in their household.”
Aside from having a budget, Mr O’Loughlin recommended saving money by shopping around, particularly for major expenses such as home loans and insurance.
“If you don’t ask the question, a bank might not necessarily offer you the best rate, even though you might be a long-standing customer,” he said.
“Similarly, shopping around for insurances and bundling up home and contents, car, or other types of insurance can help you save.”
To find out more about how to create a budget or plan for your financial future, please give LDB a call on (03) 9875 2900 or contact us via the form below.
