The Best Place for Your Money in 2017
Knowing where to put those hard earned dollars in 2017 appears to a constant learning process, and your age is a key factor in deciding where that money should go. Here’s a few suggestions for 2017, based on these five key life stages:
Students and singles:
During this life stage it’s important to start saving 10 per cent of any income you’re earning as soon as possible. It doesn’t matter what you’re saving for, it will pay off later in life. Stay away from debt and avoid the temptation of a credit card. If you already have a credit card to your name, make paying off your debt a top priority. There’s no use putting money away into an investment if you’re losing money towards credit card interest.
Having dual incomes and saving together works best when saving for a deposit on a house or preparing for a family, and is also best when looking at investing. If investing is looking like a possibility, make sure to do your research on house price history and outlook in your area. Don’t rely on share and property investments when saving for a home deposit, because these are too unreliable.
Young couples should have life insurance and private health insurance policies set up by the age 30 to avoid penalties. Young couples aiming to only start a family later should aim to put one partner’s income aside as a test to see how they can cope with surviving on one income before making the decision to have children.
Families & Growing Families:
Life insurance is number one at this stage of life, and often can be set up through superannuation where the cost of premiums does not take a major toll on your pocket. This is the time of most peoples’ lives where expenses are sky high. Housing, education and other child-related costs are brutal, but it’s also a great time to add that little bit extra into superannuation.
The new super rules effective from July mean that there should be no delay on making extra super contribution until your late 50s. So it’s important to keep forfeiting that small amount of your monthly pay, and in turn you lower your tax costs. This also makes saving easier and setting up a reoccurring transfer to keep these savings automatic will lower the risk of spending. Another way to get ahead in your finances is to keep track of all expenses and set a realistic budget, this way you can detect any unnecessary spending and take control of it.
Many pre-retirees are still paying off a mortgage and this should be the main priority. The best way forward is to pay off all unnecessary debt and to not get too defensive with current investments. The ideal aim is to retire with no personal debt and a positive superannuation balance.
The best thing an empty nester can invest in for 2017 would be financial advice. Continuous rule changes make it harder for the average person to understand what’s best for their money and tax-saving strategies. Transition to retirement can still work.
Advisers say the biggest fallback for retirees was being too safe with their investments when planning for this life stage, such as storing their dollars in a savings account earning just 2 per cent. Retirees in their 60s should still aim to have at least half their money invested in growth assets such as property investment. Retirees could run out of money a lot quicker they don’t have at least half of their money invested in growth assets, such as property investment.
Looking to grow your investment portfolio? Call Lou on 1300 LYFEGROUP or email firstname.lastname@example.org to book your one-on-one appointment. Only you have the power to change your financial future!
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