You have a young family, you’ve just acquired a
housemortgage to fit the family, and gone from two to one-point-something incomes with childcare expenses to boot.
You’re experiencing The Squeeze.
You can still remember what it felt like when you were DINKs (double income, no kids). Back then you didn’t have to think that much about managing your money. Mobile phone plans, rent or mortgage – you didn’t love any of them but there was always enough income coming in to pay the bills (or at least pay off the credit card a few weeks after).
Now money feels that extra bit tighter.
…and in a few years you can see school fees coming.
You wonder if there’s a light at the end of the tunnel.
It’s going to be ok.
There are a few things going on behind the scenes that will help in the long run:
- You’ve got at least compulsory employer contributions of 9.5% going into your super. It might not seem like real income to you now, but it’s building the assets that you’ll live off when you stop work.
- While it’s a small portion in the early days, principal & interest mortgage payments are making a dent in the principal of your home loan. Keep at it and you’ll in time be paying more principal and less interest with each payment.
- You’re building and maintaining your human capital just by being at work. That’s the skills, experience and networks that you’ll be drawing on to increase your income in the future.
During The Squeeze, it’s hard to look past tomorrow and into the future. What you’re experiencing today – it’s what many of our successful retiree clients were doing 20 and 30 years ago and they felt just the same way at the time. Now they’re in a position where they own their homes and have money in super to pay for retirement. It takes time but it really does work.
So what can you do today, and how can we help?
It’s hard to follow a plan for five and more years, when it’s not set out and you can’t see the results.
We can help by putting a plan in place for you. The majority of that plan might even recommend that you keep doing what you’re doing, but with a set of projections that give you the mental picture of what that looks like, when you plan those actions out over 5, 10 and 20 years.
You can put a printed copy of your financial future on your fridge if you like, as a reminder. Having a picture in mind can bring great comfort that you’re on the right track.
One final thought
No great plan is complete without being aware of what can knock you off track. For most of our clients with young families, that’s ill health or an accident that causes income to stop, preventing bills being paid and mortgage payments being met.
Plan A is always for good fortune and continued good health. We can also make sure that you have a plan B, to work alongside your plan A in case you experience poor health.
Not having any plan B is a recipe for disaster, but with smart structuring you can also be set up so that you know you’ll stay on track even if you experience misfortune with your health.
If you’re ready now to get started, book an appointment by calling (02) 6247 1233 or send an email to firstname.lastname@example.org.