Our fifth Women in Focus webinar and the first for 2021 provided an overview of what to consider at the start of a new year, and how to plan for your financial success.
CountPlus One Managing Principal Ian George presented Planning Ahead, a guide to approaching 2021 and refreshed financial goals. His presentation revisited and built on some of our prior discussions around tax planning and insurance, and creating and managing wealth at each stage of life.
Ian acknowledged that most of us go into a new year with some resolutions to make us better, happier, fitter or whatever it may be. For a myriad of reasons, the resolutions are dropped along the way but Ian said failure to have a plan is at the core of this.
He encouraged attendees to get the ball rolling with the most important step of all: establishing a plan to achieve your financial goals.
The Women in Focus series aims to educate a new audience on the basics of managing finances through each of the life phases, or refresh the knowledge you may already have.
Each month, CountPlus One introduces another of its leaders to unravel financial information you can use as the basis for conversations with the rest of the family, or your friends and colleagues.
You can get to know the latest presenter, Ian George more here.
Here’s a brief recap of Ian’s presentation, which can be viewed here:
Ian acknowledged that women do face some gaps in managing finances, relative to their male counterparts. Among the gaps are:
Wage inequality, often impacted by putting a job or career on hold to take care of children and parents,
Investment risk and superannuation, given the gap in how much income women accumulate in their working life, which results in less to invest and create wealth.
Bridging the gap is both an education issue and an action issue. It all starts with having plan, and implementing it, said Ian.
“Too often people operate with the all-encompassing goal of just amassing wealth rather than the specifics of what they want to accomplish,” he said, adding that you need to have clearly-defined goals.
When setting goals, consider:
What do we want eg: to send children to private school?
What will it cost eg: how much are the school fees?
Assess reality eg: how do we do it; what saving mechanisms or external contributions do we have access to?
Step two is to Prioritise– assess what needs to happen first; ask do we need to pay down debt before we build cash reserves; do we have retirement savings; do we have education savings; and are there other short-to-medium -term goals we need to consider, such as replacing a car?
Ian outlined two goal-setting techniques, beginning with so-called SMART goals, an acronym for goals that are Specific / Measurable / Achievable / Realistic / and Time bound.
If SMART goals are too rigid for you, he suggested Open goals, which means thinking about what you want to achieve, identifying what you want to measure, and then phrasing the goal in a more open-ended way. For example, you may want to reduce your home loan, so you decide to increase monthly repayments and your open-ended goal is to see how much you can comfortably raise average monthly home loan payments.
Regardless of the goal-setting technique, the keys for success begin with:
Developing a plan
Understanding your cash flow and what it is spent on
Discussing the family goals
The family budget
Having some reserves
Knowing your weaknesses
Monitoring progress through regular check ins,
And holding yourself (and family members) accountable.
Building wealth is another key aspect, and Ian stressed the importance of making regular monthly or weekly contributions, reducing non-deductible debt (home loan, credit card etc.), and investing tax effectively (including vehicles such as superannuation, and business structures).
Protecting the wealth you are building is also paramount, and includes assessing ownership of your assets, trusts, insurance, wills and powers of attorney to name just a few things to consider.
Of course, this was very much an overview of the many things to consider when you set financial goals and consider how to achieve them; everyone has a unique personal situation.
For more on recent webinars, to ask questions relating to your personal situation, email [email protected].
The sixth Women in Focus webinar explored Goals-Based Investing versus traditional investing approaches, and helped you to consider how well equipped you and your family are with an investment strategy