FAQ

1.    At what age do we start to teach our children to budget?

MYF - Great question, by the way. This is a challenging question for many families.

It’s a great idea to tie this concept to pocket money, but the children need to be old enough to work it out. We suggest that around 5 years old is a good time to start. The children will then learn that sometimes they can’t afford to buy what they want, especially if they spent their money on something else. Get them to save 10 or 20% of their pocket money. This will have no impact at first, but as the money builds up they’ll pretty soon realise that saving helps them achieve their goals.

This life lesson of spending less than you earn and saving some of your income is priceless, and forms the basis of future financial stability. What a great legacy for your children.

2. What do I do with my superannuation (or US 401K) payout?

MYF - The role of www.manageyourfinance.com.au is to help with budgeting, goal setting, and the daily allocation of your time and money so that you control your money rather than have your money control you.

Long term investment strategies are very specific to the individual, based on what you want to achieve, tolerance for risk and time horizons. These strategies require quite specific expertise.

www.manageyourfinance.com.au recommends you seek the services of a qualified and licensed financial planner who provides personal advice based on your particular circumstances.

3. How much money do I need to build my ‘Financial Log Cabin’?

MYF -This is a personal thing as everyone is different, with different commitments and employability.

Some financial planners recommend 3-6 months expenses. We lean toward the 6 months, but ultimately, it depends on your circumstances. How employable are you? Is your job specialised?

If you are in a specialized occupation in a cyclical industry with lifestyle commitments (such as a large mortgage), 6 months expenses is almost certainly not sufficient. On the other hand, if you have little debt, living costs are low, and your skill is widely sought after (such as a plumber or motor mechanic), 6 months may well be plenty.

Reducing your expenses will reduce the size of the safety net you need. The book ‘Recession Proof Yourself’ will help with strategies to reduce costs and save that safety net.