Spend less than you earn.
A very simple concept, but it is amazing how many people struggle to get their head around this basic fact. They want to talk about SMSFs, or shares, or property, but none of these will do you any good unless each and every week/month/year you have more money coming in than money going out.
There is no magic pudding, or clandestine financial planning secrets, that can generate wealth unless you are willing to forego some current consumption to improve your future condition. Achieving balance between your living costs (what you have to spend money on), your lifestyle costs (what you want to spend money on) and saving (to achieve your future lifestyle goals) is a target we set for all of our clients. Managing your money well is the foundation for all financial success.
If your living and lifestyle costs take up all of your income then, bluntly, you are living beyond your means and need to cut back on consumption. If you are unwilling to do that then you need to prioritise lifting your income to give you the cash to support your lifestyle. If you won’t or can’t do either of these things then there isn’t much a financial planner can do for you.
Even if you say your number one goal is to save to buy a house, or a holiday or to fund your retirement, if you aren’t allocating money each and every month to achieve the goal then your behaviour suggests it isn’t actually that important to you.
Are you allocating funds each month to the goals that are important? Or do you need to reassess your priorities and put in place a plan?