Congratulations on repaying your home loan! This is a significant milestone for many Australians and opens up your options in life and when building wealth. Here are some financial insights from the Boutique Adviser’s Perth team on smart ways to make the most of your newfound financial freedom.
Ensure you maintain an emergency fund
Ensure you have a robust emergency fund in place. This fund should cover at least three to six months’ worth of living expenses as a general guide and will provide a safety net for unexpected expenses or financial setbacks.
Pay Off Other Debts
If you have other debts, such as credit card balances or personal loans, use your extra cashflow to pay them off. Reducing your debt load, particularly those that carry high interest rates and charges, can improve your financial health and free up more money for other goals.
Review and Adjust Your Budget
With your home loan repaid, it’s a good time to reset and refresh your budget. Looking at what you spend and what you can save will ensure your plan is reflective of your current financial situation. This can help you stay on track and make the most of your hard earned money.
Invest in Your Future
Consider directing a portion of your cashflow towards investment or wealth-building activities. This could include a well-diversified portfolio of shares, bonds, managed funds, or property. It’s important you start growing your investment nest-egg sooner rather than later and seek financial advice from someone who knows best approach.
Boost Your Retirement Savings
Increasing your contributions to your superannuation can significantly improve your quality of living in later years, something you are always best to start earlier in life where possible. In light of your newfound debt-free position, it is important you allocate some of your savings towards future retirement. Given some forms of contributions are tax-deductible, you may also reduce the amount of tax you pay personally from year to year!
Identify Major Goals
Having clearly defined goals and an understanding of their purpose can help you prioritise and ultimately achieve all of you ambitions in life. Whether it’s funding your children’s education, planning for a major purchase, or saving for a dream holiday, allocate some of your cashflow towards these goals.
Consider Philanthropy
If you’re in a comfortable financial position, think about giving back to your community or supporting causes you care about. Charitable donations can be a fulfilling way to use your money and make a positive impact.
By taking these steps, you can ensure that your cashflow is working for you and helping you achieve your financial goals. Remember, it’s always a good idea to consult with a financial adviser to tailor these strategies to your specific situation, please reach out to the Boutique Advisers team if you’re looking for help.
Sean Hocking works with successful individuals and families across Perth and Australia-wide to provide peace of mind and clarity around their financial future. Having a roadmap in place, which clearly articulates what’s important to them in the years to follow, gives his clients the confidence to make clear and informed decisions throughout their financial life journey.