Long term financial planning is essential when you start earning a regular income – not years down the track when you’re approaching retirement. However, this is difficult when you’re managing immediate financials goals like getting to grips with starting a family, budgeting, buying a vehicle and setting up a home.
This means that we often leave addressing future financial needs until we are more established. While these basics are a solid foundation it’s never too early to start looking after your long-term financial health. Especially for tradies.
Tradies retire two years sooner than most
Australian Bureau of Statistics findings show that people in physical jobs – like tradespeople – retire, on average, at least two years earlier than more sedentary occupations like professional service providers. This makes it even more important for tradies to get a head start on working towards their financial freedom.
The free LiveWell 10-point health check tailored for tradies is a great place to start – it’s a quick and easy way to identify how to get your financial goals on track as early as possible. Our specialist partners in insurance, income protection, investments, medical cover, tax and mortgage finance can all help you make the most of your money.
Whether your long term goals are to start your own business, help the kids through uni or retire in style, paying off your mortgage is a big step in the right direction. For instance, a $500,000 mortgage paid off over 10 years instead of 25 years can save a massive $186,084 in interest over the term of the loan. See the illustrations below.
Don’t get put off by the more expensive repayments. If you’re keen to put those extra dollars in your pocket rather than your lender’s here’s how to get started.
1. First you need to find out your current mortgage balance by contacting your lender, or checking online.
2. Find out what your current mortgage interest rate is (if it’s over 4% talk to us!) and any monthly fees.
3. Enter these details into a mortgage calculator. We used the quick and easy Money Smart calculator (don’t forget to adjust the payment frequency to your pay cycle).
4. Rejig your budget planner to make it happen!
How to afford higher repayments
Do the repayments look unrealistic? Consider these ideas to make them more manageable:
1. Pay Yourself First! If you want it to happen, set it up as an extra repayment and remove the money from your account so you can’t spend it.
2. Review your current expenses. Can you shave a few dollars off the weekly shop? Cut down on treats like takeaways and nights out, or organise school run carpools? Every little bit helps.
3. Increase your working hours or consider getting a second job. Every extra hour you’re making money is an hour less that you’re spending it!
4. Look into investment options that maximise capital growth. This can provide extra income and potential tax savings.
5. Do you have tools or equipment that could be hired out through the share economy to boost your income?
Maximise your tax deductions. This is a legitimate way to decrease your tax payments and increase what goes into your pocket.
Let a LiveWell Consultant evaluate your mortgage situation and guide you on how you can improve
Our free financial health check will help identify the health of your finances, and our team of experts can help identify areas for improvement. Together, with our mortgage advisers, we can check you have the best home loan product for your spending habits and income, and create a financial blueprint to help you be mortgage-free in 10 years.
Complete our free 10-step financial health check today and find out how you’re tracking on your path to financial freedom.
Don’t procrastinate any longer! It only takes a few minutes to check if your finances are on the right track. Joel and the LiveWell team have many years of financial guidance behind them, and they have access to specialist advisors and consultants who can help you become financially stable.