Ever wonder where the money goes?

90% of Australian’s are stressed about money. What most don’t realize is that the quickest route to having more money is to simply be smarter with the money they have.

The key is financial planning. Sadly, this subject doesn’t get much coverage in schools.

Many of us don’t learn about money until it’s too late. But, don’t worry! Here’s some of the best financial planning advice you’ve been missing out on.

That’s why we’re here to share some thoughts you might never have considered.

Start Now

This could be the single biggest tip you should take to heart, and it’s the easiest.

The best saving plans always start now. The theory is simple: the sooner you save, the more you’ll have at the end of it.

Many of us put off researching savings. There’s always something more important to do. But days soon turn into weeks. By that time, you’ve lost out on hundreds of dollars in savings. Now think what a huge difference that will make on longer timescales.

To add to that, you need to think about compound interest. The sooner your savings start to offer interest returns, the more you’ll benefit from compound interest. Once your savings have been slowly building for a few decades, you’ll be making huge returns – essentially free money.

It sounds simple. But it’s easy to fall into the trap of thinking saving is a problem for tomorrow. So learn how to do it now.

Track Your Spend

How much do you spend a month?

Can’t answer? Not confident in even a ballpark figure? Then it’s time to start tracking your spend.

Tracking your monthly expenditure gives you control. You can see exactly where your money is going. Often, you’ll realize it’s being drained by things you hadn’t even considered. Even a few too many coffees can make a surprising dent in your funds.

You can use anything from an Excel sheet to an app to keep track of your monthly outgoings. Thanks to automated tools, it’s actually easier than ever to make this part of your financial planning. Some tools can even integrate directly with your bank to track money without you having to lift a finger.

Knowing exactly how much your spending shows you how you can cut back. But it also has another psychological advantage. When you’re in the habit of tracking your money, you become more aware when you’re spending it in the first place.

Soon, you’ll find you keep a close watch on the little spends that add up. It’s key to turning money from an abstract concept into a finite resource.

Take Your Pension Seriously

Nothing seems as far away as a pension when you’re young.

But that line of thinking is a trap. Your elderly self is the person who should benefit from the pension, not the one who should have to worry about it. So it should be a cornerstone of your financial planning.

Does your career offer a pension? If so, are you part of the scheme? Many employers even offer pension incentives, such as matched payments. That’s a great way to maximize your money in the long term. And don’t worry if you change employers because you can usually transfer or freeze your old pension – you won’t lose anything!

If you can’t get a pension through your employer, it’s time to look at private pensions. These work in much the same way, so there’s no excuse for not having a pension underway. You don’t even have to worry too much about a pension once it’s set-up.

Pensions represent a ticking time-bomb for modern developed countries. If you don’t want to get caught up in increasing retirement ages and threadbare state pensions, then you need to get serious about it.

Get What You’re Worth

Too many people don’t have an accurate assessment of what they’re worth.

If you’ve spent years studying a subject or gaining experience in your field, then you deserve to be paid for it.

If you don’t feel you’re getting paid your worth, then it’s time to start negotiating. Look up tips on how to negotiate pay rises effectively. Look at the wider industry to get an idea of the going rate for your skills. Particularly if you’ve been in a job for a long time, it’s easy to settle with what you’ve always had.

But wage discrepancies favor those who can make some fuss about it. Don’t rely on your company to take the initiative!

Even if it’s only a hundred dollars extra a year, the difference can be huge over time. What’s more, you can use this higher wage as a benchmark if you go elsewhere. You need to push yourself so you’re always moving up the pay scale. The more you make, the more you can save.

Don’t Let Debt Add Up

You can think of debt as the dark side of compound interest.

The more debt you have, the more it’ll start to add up. The interest on repayments can sneak up on you and bleed you dry if you’re not careful.

That’s not to say you should never borrow. If you need to use a credit card or buy something in finance, that’s fine. But what you need to do is carefully read the small print and seek advice if you don’t understand anything. Never enter into an agreement without a clear idea of what you’re signing up for.

If you do create any debt, be sure to clear it as soon as possible. It’s a sad reality that many people pour money away due to poor debt management. And yet it’s easily avoided with good financial planning.

You should always prioritize clearing debt over investing your money. Why? Investment returns can be relatively small compared to high repayment fees on credit and loans. By handling debt early, you can keep hold of money you would’ve lost – and often more than you’d make by investing.

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Financial Planning is Future Planning

Money can be too abstract sometimes. But the thing to keep in mind is taking care of your money means investing in your future. If you want a future free of money woes, then you need to maximize your money today. So keep our tips in mind and make it happen!

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Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.