Have you ever wondered how much money you can save in a year?
It’s a particularly interesting question when you’ve reached a certain stage in life, for example, if you’ve started to draw-down on your super or get the age pension.
You may find that younger people make the false assumption that you have achieved all your financial goals, thinking you can now take it easy and splurge on all those indulgences. Yet the reality in retirement is that the bills keep coming only your pay packet doesn’t! And in this low interest rate environment, your savings and investments might not be earning as much as you would have hoped.
Now, more than ever, it’s healthy to practise smart money habits so you can live the life you’ve planned for this stage in your life. From day-to-day budgeting to considering options to generate income, make it a priority to grow your savings this year.
Even if you only manage to save a small amount each week, it will quickly accumulate over time. We all know the saying that if you take care of the pennies, the pounds will take care of themselves!
Goal setting is vitally important because it sets your motivation and quantifies how much you need. As the saying goes, a dream without a goal is just a wish.
Just imagine what you could do with those extra savings!
Maybe you’d like to pay someone to help you take care of those things around the house that are becoming too hard, like mowing the lawn or doing the vacuum cleaning.
Or maybe you need to spend some money on your home to make it safer and more comfortable, like a new kitchen or bathroom.
Or perhaps there’s something you’ve longed for in your heart like an original piece of art, fine jewellery or a holiday at one of your bucket list destinations. Whatever your goal is, make sure you have a plan in mind.
As we all know, money doesn’t grow on trees.
If you want more savings, put simply, you need to earn more, or spend less, or both. And to make a start on that, you’re going to need to examine your current finances.
If you’re comfortable with technology, ask your bank if they have some free software – like an app or tools included in their internet banking platform – that can analyse your income and expenditure and generate insights on exactly where it’s coming from and going to.
If your bank doesn’t offer that, then there are several personal financial management apps that you can download onto your smart phone and securely connect to your bank account.
If an app is not for you, but you know your way around a computer, download your bank statements for the last year in a computer file format that will let you organise it neatly in a spreadsheet.
You may be quite surprised by what you learn from this analysis!
Now that you know a lot more about your outgoings, can they be optimised?
Do you have some big-ticket outgoings like insurance? It never hurts to shop around and get competitive quotes, although admittedly it can be a hassle, which is why most of us don’t do it and pay the ‘loyalty tax.’ The savings on car, home, boat or investment property insurances can be huge. Note that you don’t necessarily need to wait until renewal time to switch because, depending on your provider, it may be possible to cancel insurance by giving notice. Check with your insurers.
Are you paying fees on any bank accounts or credit cards? It can’t hurt to call the bank and ask if they have a fee-free option. Or ditch the credit card altogether and use a debit card instead.
And how about your weekly shop for groceries? Do you make a shopping list and stick to it? Or do you get tempted by all those special offers at the big supermarkets? A useful tip here is simply to do your shopping in a smaller store away from a big shopping centre. You will still find everything you need – plus you might also find your waistline thanks you!
Petrol and energy are also outgoings that can easily be optimised. There are free online resources that help you monitor the petrol price cycle in real-time and show you the cheapest price available at a location near you.
Your energy company should have online resources that explain what all that information means on your energy bill; if not, call them. The Australian Government’s Energy Made Easy website can help you find the right energy retailer for you. To change energy providers, generally all you need to do is contact the company you’re looking to move to, and they will organise the transition from your old retailer on your behalf.
Make a budget by category of how much you think you should be spending each week or month and then track it.
If you need some help, the Australian Government’s Money Smart website has a free budgeting tool that breaks down your outgoings into eight detailed categories. It will let you save your budget online or as a spreadsheet. Allow about 20 minutes for this.
Most personal financial management tools also have a wizard that lets you create a budget.
Your budget is a multi-tool for success – it’s a plan, a monitor, and an accountability device.
If you blow the budget one week, try to understand why, and then get back on track for the next week.
It’s a good idea to check in with a professional financial advisor and/or an accountant at least once a year to make sure that you are on top of any changes to superannuation or Centrelink rules.
If you are interested in finance, and you like reading, you might also like to peruse the latest books and online subscription resources that specialise in topics like tax, superannuation and aged care.
If you’ve budgeted well and accumulated those savings, it can be challenging to find an investment option for your savings that will also generate a competitive return.
One investment option to build your wealth and enhance your retirement income in 2022 is to invest in an income-focused managed fund with an established fund manager, such as Trilogy Funds.
As one of Australia’s leading fund managers of property-based investments, Trilogy Funds has a range of professionally managed income funds designed to provide competitive returns, even in this historically low interest rate environment.
You can also discover how property-based funds could boost your retirement income by downloading Trilogy Funds’ free e-guide.
For over 23 years, seeking competitive returns and managing risk for thousands of investors has been at the heart of Trilogy Funds’ business. Trilogy Funds specialises in managing mortgage trusts, diversified income funds and property trusts. You can learn more about the different type of investment funds available here.
While there are associated risks with all investments, Trilogy Funds’ team of experienced investment and portfolio managers actively manages the funds. Investing via a managed fund also enables you to invest in assets and opportunities you may not have access to as an individual and can add important diversification to your investment portfolio.
If you’re looking for investments with income-focused strategies, Trilogy Funds’ has investment options designed to deliver competitive income. Learn more about their flagship products; the Trilogy Monthly Income Trust and the Trilogy Enhanced Income Fund.
TRILOGY INFO This article was prepared in partnership with Trilogy Funds Management Limited ABN 59 080 383 679 AFSL 261425 (Trilogy Funds) as responsible entity for the Trilogy Monthly Income Trust ARSN 121 846 722 and Trilogy Enhanced Income Fund ARSN 614 682 469. Application for investment can only be made on the application form accompanying the Product Disclosure Statement (PDS) dated 17 December 2018 and by considering the Target Market Determination (TMD) dated 1 October 2021 for the Trilogy Monthly Income Trust ARSN 121 846 722 and PDS dated 28 July 2020 and TMD dated 1 October 2021 for the Trilogy Enhanced Income Fund ARSN 614 682 469 available at www.trilogyfunds.com.au. The PDS contains full details of the terms and conditions of investment and should be read in full, particularly the risk section prior to lodging any application or making a further investment, together with the TMD. All investments, including those with Trilogy Funds, involve risk which can lead to loss of part or all of your capital or diminished returns. Trilogy Funds is licensed to provide only general financial product advice about its products and therefore recommends you seek personal advice on the suitability of this investment to your objectives, financial situation and needs from a licensed financial adviser. Investments with Trilogy Funds are not bank deposits and are not government guaranteed. Past performance is not a reliable indicator of future performance.
In the current low-rate environment, generating income from your hard-earned savings can be challenging. Trilogy Funds’ property-based and diversified funds are designed to provide competitive and investment income.
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