7 tips to improve your financial health

With financial stress impacting one in five Aussie workers, see what steps you could take to improve your financial wellbeing.

Some days you might feel confident you can meet your needs within the boundaries of your current income, whereas other days you may feel like you don’t have nearly enough funds in order to do so.

The truth is, you’re not alone. Nearly 2.5 million Aussies say they feel moderately to severely financially stressed, even though financial stress has been decreasing year-on-year in Australia1.

If you’re interested to know more, we take a look at some of the findings that came out of AMP’s 2018 Financial Wellness in the Australian Workplace Report, in addition to what steps you could put in place to potentially improve your financial position and wellbeing.

Findings from the 2018 financial wellness report

Some of the figures that came out of the report revealed the following2:

  • The number of Aussie employees feeling financially stressed across the board in 2018 was 19%, down from 22% in 2016.
  • In comparison to 2014 research, Aussies also indicated they had greater disposable income than in years gone by and were spending more money.
  • Research participants in 2018 also said they felt more confident in dealing with financial matters and with their own levels of financial understanding.
  • Compared to two years ago, fewer people said they were engaging in negative financial behaviours, such as making late repayments on bills and credit cards. At the same time however, there was a decline in positive financial behaviours, such as people making additional repayments on mortgages and putting aside savings for a rainy day.
  • Of those working Aussies that did indicate that they were financially stressed, this was being felt across all industries, income levels and roles.

Actions that could improve your financial wellbeing

On a positive note, research identified that those who have been financially stressed in the past were often able to recover through changes to their behaviour and mindset3.

Here are some suggestions of things you could do (if you aren’t already) which may help you to improve how you feel financially.

1. Create a budget that works for you

When it comes to creating a budget, try jotting down into three categories – what money is coming in, what cash is required for the mandatory stuff (such as bills), and what dough might be left over (which you may want to put toward existing debts, savings or your social life).

Writing up a budget may take an afternoon out of your diary, but it will help you to more easily identify where there’s room for movement. For instance, could you reduce what you’re spending on luxury items, subscription or streaming services, eating out or clothing?

2. Consider rolling your debts into one

If all the small debts you once had, have multiplied and grown into bigger debts – you could look to roll them into a single loan, and reduce what you pay in fees and interest.

This could help you to save a significant amount of money (depending on what you owe) and make it easier to manage your repayments, as you’ll potentially only need to make one monthly repayment rather than having to juggle several.

The main thing to ensure is you are paying less than what you are currently when it comes to interest rates, fees and charges, and that you’re disciplined about making your repayments.

3. Try to save a bit of money regularly

Even a small amount of cash deposited on a frequent basis could go a long way toward your savings goals, with a separate research report indicating the average savings target for Aussies is a bit over $11,0004.

Some tips people said helped them along the way was transferring spare funds into an actual savings account, setting up automatic transfers to their savings account (so they didn’t have to move money manually) and putting funds into an account which they couldn’t touch5.

4. Set aside some emergency cash

With research showing that an emergency fund of between $4,000 and $5,000 is generally enough to cushion most working Aussies when it comes to unexpected expenses, it’s probably worth some thought6.

An emergency stash of cash could give you peace of mind and reduce the need to apply for high-interest borrowing options should you be faced with a busted phone, car tyre, or bad landlord or lover leaving you financially stranded.

5. Be open to talking money with your partner

One in two Aussie couples admit to arguing about money7, so if you haven’t already, it might be worth sitting down to ensure you’re on the same page and that both parties’ goals are being considered.

Understandably, it may not be the easiest topic to broach, so if you’re looking for some tips, check out our article – 10 money conversations to have with your other half.

6. See if you can get a better deal with your providers

You more than likely have several product and service providers, and figures show you could save more than a grand annually on energy alone just by switching from the highest priced plan to the most competitive on the market8.

Again, this may take a couple of hours out of your day, but the savings you could potentially make may make a real difference to what you cough up throughout the year.

7. Don’t be afraid to seek financial assistance

If you are struggling to make repayments, you may be able to seek assistance from your providers by claiming financial hardship.

All providers must consider reasonable requests to change their terms in instances where you may be suffering genuine financial difficulties and feel help would enable you to meet your repayments, possibly over a longer period.

In addition, you can talk to a financial counsellor (free of charge) at the National Debt Helpline by calling 1800 007 007

About Tailored Lifetime Solutions:

At Tailored Lifetime Solutions we pride ourselves on staying true to our core values of:

  • Genuine Care
  • Keeping it simple and
  • Providing Security and Peace of Mind.

Tailored Lifetime Solutions has been helping Australians secure their Financial future for over 18 years. We understand each of our clients is unique and as such require tailored financial advice to meet their needs. We work to partner our clients on their financial journey, to ensure financial fitness throughout life’s various stages and secure your future financial security.

With over 70 years of financial planning experience between us, our areas of advice include:

  • Wealth creation
  • Lending and mortgage broking
  • Superannuation advice
  • Self managed superannuation funds
  • Aged Care advice
  • Lifestyle financial planning

Providing quality financial advice in Balwyn and the Eastern Suburbs for almost 20 years.

Important information

This information is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.

Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

5 steps to help you figure out your passion

Need a new reason to get up in the morning? Enrich your life by finding and developing your next passion, with tips from psychology researcher Angela Duckworth.

Ever watch The Great British Bake-off? It’s an addictive reality TV show about the hunt for Britain’s best amateur baker. Few of the contestants cook for a living — baking is simply their passion. And it’s passion that carries them through weeks of competition and critiques, past weeping pie crusts and sad meringues. At every new challenge, they’re just excited to do what they love and to do their best.

Wouldn’t you want a passion like that?

Psychologist Angela Lee Duckworth thinks a lot about how to find and nurture a passion — it’s part of her work on what she calls “grit.” Simply defined, grit equals passion plus persistence.

Passion is not something you discover, she says — “it’s not like a lost set of keys!” Instead, she says: “Passions tend to be developed. It’s not just about being intense about what you’re doing but waking up week after week, month after month, year after year, wanting to think about the same thing.” It’s something fulfilling and enjoyable, but it’s not that easy; Duckworth calls it “hard fun.”

Here are five steps to help identify your next passion — or cultivate one you already have.

1. Clear out the distractions.

One reason you may not know your passion: you haven’t given yourself the time and space to pursue it. Now, many of the distractions in our lives — picking up kids from daycare, writing a proposal for work, dealing with a burst pipe in the basement — are non-negotiable; they come with being a human in the world.

But what about the negotiable distractions? One major source is right there in your pocket: your phone. “Whether it’s watching frivolous videos or scrolling through social media, there’s enough that you could do those things forever,” says Duckworth. “But it’s time that doesn’t really add up to anything.”

She asks: “How committed are you to not doing that anymore? Reflect on how you’re using your time, and whether or not you want to be distracted by these temptations.”

2. Think of a passion as like an internship.

Most internships serve as a trial run for a job — while you’re acquiring skills and knowledge, you’re also trying to see if you want to commit. “You might figure out you don’t love the field as much as you thought you did,” says Duckworth, “but you find out something else about yourself that is a clue to something that’s a better fit.”

Just like an internship, a passion is something you learn by doing. “You can’t figure things out on paper, or think about them,” says Duckworth. “That’s not how you develop a passion — you have to do things. It takes experience; it takes trial and error.”

To help her children start cultivating passions, Duckworth made them each choose one “hard thing,” such as learning ballet or playing soccer. Because she knows passions don’t develop overnight, she made rules of what they could pick — “it has to entail practice with feedback; they can’t quit in the middle; and they must choose the activity for themselves” — to prevent them from dropping it when they hit a speed bump.

3. Be patient.

Don’t expect to fall in love immediately. “A reason why passions take time to develop is that at the very, very beginning of things, we’re all clumsy and awkward and the learning curve is very steep,” says Duckworth. “Frankly, it’s hard to be in love with something when you’re that clumsy amateur.”

Her daughter Lucy picked the viola as her “hard thing.” But Duckworth says, “It didn’t become her passion in year one or year two. I wouldn’t say she was wildly enthusiastic, but she kept wanting to do it. Now she’s good enough that it can be enjoyable to her in a way that wasn’t possible in the beginning.”

During the learning period, you’ll need to tap into the other aspect of grit: persistence. In keeping with Duckworth’s rules for her kids, just make sure you give yourself a real chance before you move on to another activity. “I’m not saying you should stick with everything you’ve ever tried,” she says. “Use your judgment.”

As you progress with your activity, look out for this sign that you’re nurturing a passion: “You never get bored; in fact, you get more and more interested,” says Duckworth.

4. Stay motivated by remembering the bigger picture.

Every passion has its share of less exciting moments. For playing the viola, it may be practicing scales for the umpteenth time. For baking, it could be washing up; for teaching seventh-grade English, grading papers. The secret to not letting them derail you is to see how every way you engage with your passion — no matter how small or dull — is a step toward something bigger.

“I have to check my email today, read a bunch of research articles, write a revision of an article, and these can be total drudgery if I treat them like isolated tasks that need to get done,” Duckworth says. “But when I understand that they help me become a better scientist and that helps me help children thrive, and when I think, ‘That is the only thing I want my life to be about — to help children live better lives’ — then all of a sudden the emails, articles and revision become meaningful.”

This shift in perspective may seem subtle, but it’s effective in keeping you engaged. “Connecting your short-term work with your long-term ambitions can be enormously helpful to people who feel like they’re losing their drive,” she says.

5. Avoid burnout with this one weird trick.

It is possible to go overboard while pursuing a passion. Are you just not making progress like you want to? Is your passion less fun than it used to be? Duckworth suggests: “The first thing I’d ask is: Are there objective things you can do to just take care of yourself?” Ask yourself if you’re really burning out on your passion or if you just need more sleep.

But if your burnout feels deeper than that, it’s time to step outside your own problems — and look for someone who is similarly frayed and fried. Yes, really.

“It sounds paradoxical that when you’re exhausted, you should use your energy to help another person,” says Duckworth. “But we’re wired to help each other. When we give advice to others, sometimes we’re counseling ourselves in the process. It can draw your own attention to things that you can do. In research, we’ve found that it can boost your confidence and give you the sense that progress is possible.”

Angela Duckworth’s book Grit: The Power of Passion and Perseverance is now out in paperback.

Watch her TED talk here:

The Aussie economy in 2019; it’s not boom but it’s not doom either

By Dr Shane Oliver

Head of Investment Strategy and Economics and Chief Economist, AMP Capital

Investors might be confused about the mixed news coming out late last year for the Australian economy and what it means for returns and rates.

Economic growth has been okay, and unemployment has fallen to five per cent which is quite low by Australian standards. But we’re also seeing ongoing weakness in house prices. Some say house price falls could be worse that those seen during the global financial crisis, and, ultimately, I think they will be.

So what’s going on here?

How we avoided recession

Basically, we’re seeing ‘desynchronisation’ across key sectors in the Australian economy – that is, when one part of the economy weakens, another picks up.

Desynchronisation partly explains why the Australian economy has dodged recession for almost 28 years.

We enjoyed a mining boom. When that came to an end, the mining-exposed parts of the economy, notably Western Australia, suffered. But that enabled lower interest rates and a lower Australian dollar which helped stimulate the economy. The housing market also strengthened and we had a housing boom in Sydney and Melbourne.

A new rotation

The economy is now rotating again, creating another two-speed economy.

On the positive side, we’re getting close to the end of the mining investment slump, which is taking pressure off Western Australia, the Northern Territory and parts of Queensland. We’re also seeing good signs in terms of non-mining investment and export values are doing ok.

But on the negative side, the housing boom is coming to an end and the key drivers for weaker housing returns remain in place:

  • Credit tightening
  • Rising supply in the unit market
  • Reduced foreign buyer demand
  • A lot of investors having to switch from interest-only loans to principle and interest loans.
  • Uncertainty about changes to taxation concessions around negative gearing and capital gains tax should Labor win the upcoming federal election

Also evident is a psychological change in attitudes to the housing market from ‘I’ve got to get in now otherwise I’ll miss out’ – (fear or missing out or FOMO); to ‘if I don’t get out now, I’ll be in trouble’ – (Fear of not getting out or FONGO).

So we’re likely to see more weakness in house prices as we go through 2019, particularly in Sydney and Melbourne where prices could come off another 10 per cent or so, probably more in Melbourne which has lagged a little bit going into this downturn.

That would take top to bottom falls in Sydney and Melbourne to around 20 per cent (10 per cent in 2019). Other parts of Australia will hold up a bit better, with the national average prices having top to bottom fall of around 10 per cent.

That’s going to cause a degree of weakness in terms of consumer spending in Australia because we will get a negative wealth effect flowing through. (When house prices fall, Australians are likely to feel less wealthy and trim consumption). That will also be a bit of a constraint for the banks.

Rate cut risk

When we put all this together, it’s going to mean an ongoing environment where wages growth remains low and inflation remains low, and so we’re unlikely to see the Reserve Bank raise interest rates in 2019.

In fact, the likelihood is that the Reserve Bank ends up cutting interest rates in 2019. If they do that as we expect, it could well be a second half 2019 story because it will take them a while to come around to the view rates need to be cut.

It’s a close call, but we think rates will be cut in 2019 and that there will be no rise.

Avoiding recession

Despite the negatives, when I look at the Australian economy, I don’t see a recession.
There are areas of the economy which are quite strong, and which will keep growth going to counter the other areas which will constrain it.

This year we’re probably looking at overall economic growth of around 2.5 to 3 per cent; we’re looking at unemployment going sideways – it may come down a little bit, but nothing to get excited about; and we’re looking at ongoing weak wages growth and low inflation.

What this means for investors

This outlook above has a number of implications for investors, including:

  • Returns from bank deposits will remain poor,
  • With a rate cut likely in Australia and further rate rises likely in the US, albeit at a slower rate, the Australian dollar is likely to fall into the high $US0.60s,
  • Australian bonds are likely to outperform global bonds,
  • Australian shares will remain great for income, but global shares will deliver better capital growth, and
  • The housing downturn will hit retailers, retail property, banks and building material stocks.

About Tailored Lifetime Solutions:

At Tailored Lifetime Solutions we pride ourselves on staying true to our core values of:

  • Genuine Care
  • Keeping it simple and
  • Providing Security and Peace of Mind.

Tailored Lifetime Solutions has been helping Australians secure their Financial future for over 18 years. We understand each of our clients is unique and as such require tailored financial advice to meet their needs. We work to partner our clients on their financial journey, to ensure financial fitness throughout life’s various stages and secure your future financial security.

With over 70 years of financial planning experience between us, our areas of advice include:

  • Wealth creation
  • Lending and mortgage broking
  • Superannuation advice
  • Self managed superannuation funds
  • Aged Care advice
  • Lifestyle financial planning

Providing quality financial advice in Balwyn and the Eastern Suburbs for almost 20 years.

Important information

This information is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.

Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.