How to buy more shoes
Hands up everyone who would happily trade in a relative to get their hands on Carrie Bradshaw’s shoe collection. Now hands up everyone who would do the same for her handbags … hmmmm, some of you had your hands up twice! Most of us have probably spent more than we should have on a pair of to-die-for heels at some point, but while the Sex and the City heroine may have been able to drop the equivalent of a home deposit on her designer shoe collection without affecting her cosmopolitan lifestyle, in the real world that kind of impulsive overspending causes some serious damage to your financial future. That’s why it’s so important for us girls to have strong money management skills – so we can protect our future and have our shoes too!
Most women are pretty good at money managing in the short term – research has shown that women are very confident in their ability to handle day-to-day money matters and that we’re less likely than men to use our credit cards to pay for purchases we can’t afford. But when it comes to creating long-term strategies, we tend to fall behind. The Financial Literacy Foundation recently revealed that 52 per cent of Australian women find dealing with financial matters ‘overwhelming’– they report feeling significantly less confident than men in handling financial language, investments and superannuation, which decreases their ability to create wealth and increases their vulnerability to sudden changes in financial circumstances. So if you want to increase your ability to create some substantial long-term wealth and be able to do more than just dream about owning a pair of Manolo Blahniks one day, it’s time to gather up your girl power and take control!
The first thing you’re going to need is some good advice. The Government’s Understanding Money website has a series of fact sheets about financial challenges women face, which is a great place to start (www.understandingmoney.gov.au/content/consumer/women/). But if your finances are complicated or are just in a bit of a mess then you may want to start by talking to someone face-to-face. A financial counsellor can be a great first resource and in many instances you’ll be able to talk to one for free – check out the Australian Financial Counseling and Credit Reform Association to find out where this service is available in your state.
Your next step is to find a good financial adviser for long-term advice on reaching your financial goals. It’s vital that you use a reputable one, so make sure that whoever you choose holds an Australian Financial Services Licence (you can access this information through ASIC) and that they’re qualified to give you advice in the areas that you need help with. The Financial Planning Association and CPA Australia will also be able to refer you to advisers who are members of their organisations in your local area.
Once you’ve sorted out these basics it’s time to start putting your money to work by investing. Being knowledgeable and confident is the key to good investing, so begin by working with your financial adviser to create a portfolio that you’re happy with. Your adviser will establish your ‘risk profile’, which determines how and where you’ll be most comfortable investing: if you’re an aggressive investor you might be happiest with shares and property – high risk, but potentially big returns. If you’re conservative you might prefer term deposits and fixed interest securities – slower results, but you’ll be more likely to be able to sleep at night. Either way, having a portfolio that’s developed for you can take the anxiety out of investing because it will be tailored to suit your budget and your needs. Oh, and remember to get your adviser to take a look at your biggest investment of all – your superannuation. Now’s the time to determine how much you’ll need to have invested to fund your dream retirement and start implementing strategies to get you there.
Start today! Take the first step down the road to great money management and long-term financial security and before you know it, you’ll be strolling down that road in any pair of shoes you want with a great bag to match!
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Tags: money management advice, financial counseling, money managing
Analaura Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.