A symbol of love, renewal, hope and growth, spring is also the season of marriages and births. While these are wonderful events, the fact is they can be costly so it’s wise to be financially prepared. Taking control of your financial affairs creates financial clarity to help you build a future where you will have greater choice and more opportunities to live your best life. Here are FIVE tips for your financial spring cleaning.
Understanding the realities associated with spring events can help you be financially prepared.
Spring financial facts
- If you have private health insurance, the overall cost of private pregnancy care from an obstetrician, a private hospital birth and postnatal care can range from $2,500–$20,000. If you don’t have private health insurance, the cost of private hospital pregnancy care and birth can range from $9,000-$30,000, depending on your and your baby’s care needs. Your baby’s care needs might be very expensive if special care or an extended hospital stay is needed.1
- Raising a child can be expensive, with Government data estimating the average cost for a family with two kids — one six and one ten — is $340 for a week or $17,680 a year.2
- Marriage can lead to significant debt, with the average cost for a wedding estimated to be $36,200.3 While some couples use their savings and help from parents to pay for their big day, others use their credit cards or take out a loan. These debts can have detrimental impacts for longer term plans such as buying a house, having a baby and saving for your future.
- The cost of educating a child in Australia is among the largest expenses faced by Australian families, with the average cost for a typical middle-income family increasing to $812,000, up from $537,000 in 2007.4
- First-time home buyers usually need to save for over 4 years to raise a 20% deposit for an average priced home.5 While home ownership for 18 to 39-year-olds is declining overall, those who are buying homes have almost twice the debt than those in the same age group in 2002.6
FIVE tips for spring-cleaning your finances
If you are saving for a significant spring event, it’s important to put strategies in place early.
#1 Implement a plan: A 2019 whitepaper7 reveals that over 50% of Australians are stressed about their finances and nearly 85% report the impact on their wellbeing. In the words of Susan Mitchell, CEO of Mortgage Choice, “It is no secret that a sound financial plan with defined objectives give people looking to get financially fit a clear purpose and subsequently, peace of mind.”
Seeking professional advice can help you make the most of what you have and establish good habits for achieving your short-term and long-term financial goals.
#2 Prioritise your debts: Your debt position can have an enormous impact on your overall financial health. A debt management plan can help you prioritise your debts; understand the difference between ‘good debt’ and ‘bad debt’; and identify tax-effective ways to structure your debt to help you achieve your longer term financial goals.
#3 Keep track of your spending: Reviewing your expenses can help you understand your cash flow needs as well as how you are spending your money. From there, you are well-placed to get your finances under control by implementing savings strategies aligned to your financial goals. The Stratus Cash Flow Management Plan is convenient, efficient and effective and enables you to understand and control your spending.
#4 Expect the unexpected: The sad reality is that one in five Australian families will be impacted by the death of a parent or an accident or illness that affects a parent’s ability to work.8 If your financial security depends on your income, it’s vital you have a contingency plan in place, whether it be your savings or appropriate personal insurance coverage for your circumstances. Personal insurance is complex so it’s always important to seek advice. In particular, it is well worth checking the detail of any life insurance policies provided through your superannuation fund or through your employer’s default super fund.
#5 Spring and beyond: While planning for significant events is important, so too is your long-term financial future. From making the most of your super to starting an investment plan, it’s well worth considering the small changes you can make now which could equate to tens of thousands of dollars when it comes to your retirement.
Of course, it’s a good idea to spring clean your finances at any time of the year. Expert financial advice can help you take financial control and achieve your financial goals, which can make an enormous difference to your life.
If you would like help to spring clean your finances, please get in touch today by phoning 3007 2007 or emailing bcribb@stratusfinancialgroup.com.au, snicholas@stratusfinancialgroup.com.au or jmarshall@stratusfinancialgroup.com.au
At Stratus Financial Group, we help families, professionals, executives, business owners and retirees manage their complex financial affairs and coordinate their professional advisers.
Stratus Financial Group and its advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. The information on this website is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Stratus Financial Group strongly suggests that no person should act specifically on the basis of the information supplied and should obtain appropriate professional advice based on their own personal circumstances.
1 https://birthchoices.raisingchildren.net.au/compare_care_options/private_hospital/cost/index.html
2 https://www.news.com.au/finance/work/careers/it-now-costs-17000-per-year-to-raise-two-children/news-story/f5d93ed1c5074d037a4ca6cfe72ce774
3 https://www.moneysmart.gov.au/managing-your-money/budgeting/simple-ways-to-save-money/how-much-can-a-wedding-cost
4 AMP NATSEM Income and Wealth Report – The cost of raising children in Australia http://www.natsem.canberra.edu.au/storage/AMP_NATSEM_33.pdf
5 https://www.bankwest.com.au/about-us/media-centre/news/first-time-buyers-report-2017
6 http://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0010/2437426/HILDA-SR-med-res.pdf
7 Please click here to download a copy of the whitepaper: https://www.mortgagechoice.com.au/about-us/insights/financial-fitness-whitepaper-2019/
8 http://www.lifewise.org.au/downloads/file/aboutthelifewisecampaign/2010_0203_LifewiseNATSEMSummaryA4FINAL.pdf
