Tips on reducing financial stress

The current market conditions and climate could be taking a toll on you emotionally and financially, but there are ways to reduce the stress and worry you may be feeling about the current economic situation.

Here are 7 basic tips to help you reduce your financial stress and re-evaluate your finances:

Tip 1 – look at your current situation

Look at your cash flow. Where is your income is coming from and most importantly where it is going? This will help you get a clear understanding of how your money is being spent.

Tip 2 – set a budget

Once you’ve worked out your current financial situation, set up a budget and stick to it! You can access the AMP budget planner at, www.amp.com.au/budgetplannerspreadsheet. This will help you track your cash flow and will provide you with a birds eye view of your finances.

Tip 3 - start a savings plan

It doesn’t matter how small or large the amount is! Learn to put some money away. This helps you to save for a rainy day. A great way to start saving is to set up an automated savings plan, which will automatically allocate the money to your savings account.

Tip 4 – look at how much you are spending

Spend less than you earn and it’s as simple as that. This will help to reduce your debt levels especially if you are living on your credit cards. Take steps to reduce unnecessary spending, such as eating lunch out or buying those at pair of shoes you don’t need.

Tip 5 – take a long-term approach

It’s not only about now it’s also about the future. Taking a bird’s-eye view of your funds is a great way to pave your way to financial success. Considering your take home pay is one strategy but looking at your super is also helpful, as it will ultimately determine the type of lifestyle you will have in your retirement. Consolidating your super is another strategy for success; you can access more information at, www.amp.com.au/consolidate. Bringing it all together allows the power of compound interest to work harder for you. It’s money on top of money!

Tip 6 – learn about investing

Find out your tolerance and risk profile. How tolerant are you with higher risk asset classes? Learn about investing and how to get your money working for you and remember to always take a long-term approach. This could include money you are saving for your retirement such as super.

Tip 7 – set a timeframe and re evaluate

It’s important to make sure your plan is working. Be sure to re-visit your financial strategy every 3-6 months and make adjustments if needed.

If you’re worried about your investments and would like to discuss your financial situation please contact us.

Important note
The information in this article does not take into account your objectives, financial situation or needs. Therefore, before acting on the information, you should consider its appropriateness to your personal circumstances. Although this information was obtained from sources considered to be reliable, it is not guaranteed to be accurate or complete. This publication was prepared by AMP Financial Planning Pty Limited ABN 89 051208327. The information is current as at 28 November, 2008 and may change over time.