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Worried About the Rising Cost of Living?

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Mortgage Choice’s financial advisers share some basic tips on how to stop worrying and take control of your finances. Mortgage Choice and CoreData’s latest Financial Fitness whitepaper explored Australians’ attitudes and behaviours towards their finances. It found that 52 per cent of Victorians are worried about the rising cost of goods and services, with implications for how it will affect their mortgage repayments and their retirement. Here are Mortgage Choice’s tips on ways to stop worrying and take back a feeling of control over your spending. 

1. Consider the life you want to live. This may sound like a daunting task, but this should see you put pen to paper and write down what you wish to accomplish – whether that be buying a house in the short term, sending your children to private school, caring for your elderly parents or loved ones, or living a comfortable retirement, which means different things to different people. 

2. Gain a clear understanding of your living expenses. This means not only knowing how much money you are spending but where you are spending it. This is one of the foundations of retirement, as individuals need to know how much they are spending now in order to paint a picture of how much they will need into the future. Financial advisers will factor in the rising cost of living into your overall financial plan in order to prepare you for the rising cost of goods and services. This is typically two to three per cent per annum. 

 

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3. Segregate your spending. Often it is the shock factor of having several large bills turn up at the same time that gives people the impression that life is getting more expensive. If you segregate your spending for expenses you know are a few months away, you can build a safety net and avoid future bill shock. For example, if you know your car registration is due in 12 months time and you know the amount, divide the amount by 52 weeks and set aside that amount in a separate bank account so you don’t feel like you suddenly need to come up with hundreds of dollars. 

4. Know your level of risk. It is important to know how to invest your money. This is why speaking to a qualified financial adviser is key to working out an appropriate strategy, as simply leaving your savings in the bank may not give you the return you are seeking. 

5. Do your research. Learning to manage your money is an important skill. The Mortgage Choice Financial Fitness Boot Camp at mortgagechoice.com.au/bootcamp is a free online educational program that helps you understand the fundamentals of financial wellbeing and learn strategies to get into better financial shape. For more information visit mortgagechoice.com.au. Disclaimer: this information is general in nature and does not constitute advice. Property Weekly urges readers to seek professional advice taking their individual circumstances into account before making any major financial decision.

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