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Are You Making These Mistakes With Your Finances?

Are You Making These Mistakes With Your Finances?

English, maths and science are taught in school, but not everyday skills such as money management. Managing your money doesn’t need to be difficult or complex and at Ricarmo Financial Group we want to make managing your finances easy.

It’s important to realise that the choices you make now surrounding your money will play a huge role in your future lifestyle. This is particularly the case for your superannuation and retirement planning.

After working with hundreds of clients, we have identified four of the most common mistakes people are making. Below we have explained each one and offered suggestions for ways you can avoid them.

Failing to Plan

If you are aiming for a comfortable retirement or upgrading your home, you need to have these included in your money management plan. However, most of us don’t have a plan for our money and this is money mistake number one – failing to plan. Outlining how you want your money to work for you, makes the process of reaching your goals achievable. You are ten times more likely to achieve your goals if you write them down.

Bad Habit Awareness

Habits are present in all areas of our life and in many cases we aren’t aware of exactly what they are. Your financial habits, i.e. the way you spend your money, is likely disruptive to your financial success. Think about your daily coffee, the extras that sneak into the trolley each week or credit card interest fees.

The first step is to be aware of where your money is going and which of your spending is an automatic habit. After you are aware of these habits you can make better choices moving forward. To make the change lasting start with one habit before tackling the next.

Failing to Track

After completing your plan and you know where you want your money to go, you need to track. Keeping yourself accountable and tracking how your plan is progressing will keep you motivated and help you achieve your goals quicker.

If you haven’t tracked anything financial before we recommend starting to track your income and expenses. Do this over a period of 30 to 90 days as this will cover the most significant item expenses such as utilities and regular payments. It will also help you identify where you can reduce spending and redirect additional money into your savings or superannuation fund.

Short Term Focus

Tracking day to day income and expenses is the first step to correct money management as it will allow you to fill any leaks. However, you also need to consider your long-term objectives and goals. Compounding interest and time are on your side to help you make your money work harder for you. For this reason, we recommend adding surplus money into your superannuation fund. Your future self will thank you for balancing your focus between short and long-term financial objectives.

A Ricarmo Financial Group Licensed Financial Adviser can assist you with your retirement planning, including insurance and superannuation. Our new approach to superannuation, managed superannuation, is at the forefront of the industry and can allow you more control over your investments and retirement. Contact a Ricarmo Financial Group planner today.