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A critical financial skill to set yourself up | Ask An Advisor
Equity Mates
June 14, 2023
Ask An Advisor
Welcome to our new weekly series, Ask An Advisor a.k.a AAA!
Financial advice is expensive, which sucks.
Mainly because over 70% of you have said you would benefit from a financial advisor, but can’t afford one.
Ask An Advisor is a series designed to bring Australia’s best advisors to you, giving you the opportunity to ask your questions, for free.
Each week we will get one advisor to answer one question relevant to the community.
Over on Equity Mates Investing Podcast we also have a monthly episode with one advisor answering many of your questions on a particular topic.
This week’s question
I’m early in my career, and earning a reliable income. What is a critical financial skill I should work on to ensure I set myself up?
This week’s advisor is Ben Wauchope, from Wealth Health Co. Here’s what he said in response to Sarah’s question:
When you first begin earning a reliable income, cash flow management is the critical financial skill that will help you set-up, and develop strong financial wellbeing. Here are considerations to help set-up good cash-flow management:
Control your spending: Develop the discipline to live within your income so that you don’t fall into bad financial habits — including debt traps such as spending money you don’t have on credit cards or buy now pay later schemes.
Prepare for emergencies: Once you learn to limit your expenses to your available income, you can then start building savings into your budget. Your emergency fund will have the first claim on your savings. Building an emergency fund is an urgent and essential task.
Invest in your future: Initiating some sort of investment is an important task at this stage. Investing now is about building good habits and putting compound interest to work over the next 30+ years. If purchasing your first home is on the goals list, consider making additional super contributions as part of the First Home Super Saver Scheme.
Consider insurance: Unless you have dependants, life insurance isn’t vital at this stage, however, income protection and basic health insurance are important considerations (especially if you’re over the Medicare levy surcharge income bracket).
Stay on top of your debts: How to best service any accumulated debt that you may have, such as student loan(s), is also an important element, as is controlling your use of debt (think credit cards). Forming bad behaviours and/or any one-off mishaps can have long-term consequences on your financial future.
About Ben Wauchope
Ben is a financial advisor & Director of Wealth Health Co.
Armed with a Bachelor of Commerce from UWA, Ben started his financial planning career in 2013 and has since worked for three different private wealth, broking and accounting firms as a senior financial advisor.
During this time, Ben undertook further studies and successfully completed an Advanced Diploma in Financial Planning, Self-Managed Super Funds and Margin Lending.
Want to ask a question?
We have a star-studded list of advisors waiting to answer your question, so what are you waiting for?
Email [email protected] with your question
