Fight your financial flaws and bring in the professionals


Jason Prowd  |  01 November 2018  |  7 min read

Key Points
  • If you think you’re a disaster when it comes to money, you’re not alone.

  • Have the confidence to take action rather than putting it off.

  • Call in the professionals to help you prepare for a better financial future.

If the thought of tackling your tax return fills you with dread, you’re not alone. Scrambling to find receipts and update half-finished spreadsheets is something many of us put off for as long as we can.

If we didn’t have tax agents to keep us up-to-date with the ATO, we’d probably never get around to it, and end up paying heavy penalties as a result. Or if we lodge it ourselves, we run the risk of making easily avoided errors. So it’s a good thing that nearly three-quarters of Australians who lodge a tax return defer to an agent.

If going to an accountant can help you get your head out of the sand for taxes, who can we turn to for other financial ticking time bombs? [113]

Ignorance isn’t bliss

Being blasé about money isn’t unusual in Australia. According to a recent survey from UBank, a staggering 86% of us don’t know our monthly expenses and just 20% of us feel in control of our finances. Staying in the dark on day-to-day spending is practically a national pastime.

Control isn’t always good. Adrenalin sports and meditation would never have caught on if we didn’t enjoy them or need to let go sometimes. But money is something we all rely on, for better or worse. So it’s no surprise that UBank also found that 59% of Australians experience stress over their current financial situation. [121]

Accept it and move on

Losing sleep about this stuff isn’t good for anyone. And while it’s great to take steps to improve your financial literacy, it’s unrealistic to try becoming a finance ninja overnight. As the UBank report clearly shows, most of us aren’t cut out for life as a money vigilante, keeping watch over every dollar, saving and investing like it’s your superpower. 

On the other hand, setting the bar a bit lower and mastering the basics could help you sleep easier at night. Using one of many budgeting apps available—UBank say 28% of Aussies do this—might help you spend less. Have a mortgage or credit card debt, health or home insurance? You don’t have to go further than Google to find a service that brings you potential savings on all sorts of essential expenses. And if you’re ready to do the real heavy lifting with your money, get stuck into my five steps to financial fitness checklist. [156]

Build your confidence; find financial independence

Having the confidence to make a start is half the battle. Thinking that good financial management takes special powers can make it seem like it’s beyond you. And if you can’t break through that barrier, money could become the villain in the story of your life. We’re finding this more and more in cases of divorce or death of a significant other, particularly for women.

Why women? The UBS Own your worth report indicates that even in the 21st century, men are still calling the financial shots in most households, with 56% of women likely to leave major financial decisions to their spouse. Only 18% of those women are concerned by it, until they go it alone. 59% of widowed and divorced women regret not being more involved in money matters and 98% would encourage other women to take a more active role in their finances.

In the same report, only 55% of women surveyed feel confident about making financial decisions, compared with 79% of men. It’s not all bad news, though: 69% of women think that women, on the whole, overestimate what it takes to be financially prepared. In other words: women know it’s not rocket science. [220]

Call the professionals

It’s never a bad time to start wrangling your finances. Even small steps will leave you feeling more financially savvy and prepared for the future. But as with lodging your tax, there may be some money tasks you’re better off leaving to the professionals.

You might not have thought of investing as essential to your financial being. But when you discover the cost of putting it off, you might be persuaded otherwise. So instead of filing it in the too-hard category, seek advice from a trusted professional (and yes, there are still plenty of good ones out there, despite the fallout from the Royal Commission). Before you know it, you’ll be joining that well-rested 41% of Aussies who have their money, and their future, under control. [147]

author

Jason Prowd leads Morningstar Next: ready-made investment portfolios.


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Am I ready to invest? Your financial fitness checklist Cash in the bank? Why your savings could be working harder for you. Investing basics: Building a realistic emergency fund

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