According to Omniwealth financial planner Steven Korner, there are six steps to financial fitness, with taking control a common thread.
1. Eliminate personal debt
Noting that Australia has some of the highest personal debt levels, Mr Korner said personal debt is generally considered “bad debt” as it isn’t income-producing and doesn’t boost wealth.
“Paying this off as fast as possible will propel you on your path to financial independence,” he said.
2. Take control of your super
It’s yours, after all. Mr Korner said savers should review their super and consolidate any duplicate accounts to avoid extra fees.
“This is the financial year to consolidate your super and take back what is yours!”
3. Make a plan
“Sit down and determine how much money you want to save this financial year. Now, divide this number by 52 weeks. Congratulations, you have just created yourself a weekly savings goal,” the financial planner said.
The next step is seeing where savings can be made. For example, cutting out the morning coffee can save more than $1,400.
4. How’s your home loan looking?
Mr Korner said that while interest rates are generally sitting at record lows, some customers are still being stung with high rates.
“Speak to a mortgage broker to take advantage of the highly competitive interest rates some banks are offering,” he suggested.
“This could save you thousands of dollars a year in interest repayments.”
5. Protect yourself
“Australians will not hesitate to insure their car but will not insure themselves. You are your most valuable asset,” Mr Korner said.
“Ensure you have appropriate levels of personal insurance in place, such as life and income protection, to protect yourself and your family in the event of unexpected injury or illness.”
6. Set a target
The key to achieving goals is to stay accountable, Mr Korner said, pointing to a Harvard University study finding the 3 per cent of students who set written goals and concrete plans were making 10 times more than the rest of their class a decade down the track.
“Schedule yourself one hour to write down your goals and how you are going to achieve them. Revise this every six months and the results will speak for themselves,” he concluded.