Getting a head start on managing your finances and your super can make a big difference to your savings goals. Here are some easy ways to tidy up your finances now, to help set your future up for success.
There's a lot to think about when managing your money – and just as many opinions on the right things to do. Setting some simple savings goals is the first step to sorting your finances. And the sooner you land on what they are, the quicker you can work to achieve them.
There are a few simple things you can do right now, to try and get on top of your finances. From budgeting to managing your super, here are 4 easy steps you can take to improve your finances.
1. Track your spending
Getting an accurate view of your spending habits means you can start to identify areas of improvement. Managing and saving money works best when you have a clear idea of what’s coming in and going out.
You could start by recording what you earn and what you spend, for every transaction you made over a period of time. Then, after you have a rough idea of your spending habits, you could commit to checking in on your spending every fortnight or month, to keep improving your financial situation.
There are ways to balance your spending with your saving, to ensure you can continue to indulge in purchases here and there. This means watching out for spontaneous spending that is easily done through apps and pay-later services. Also have a think about hidden costs that add up over time, like subscription charges. One easy way to find and record these is to search your bank account. Any free trials that ran over can add up, so cancelling memberships is one easy way to help keep money in your account.
How much could you save?
2. Set a budget
It feels good to be in control of your money and setting a budget can help with that.
When creating a budget, you’ll need to balance your immediate needs with your mid-term and long-term goals. Perhaps you want to be financially independent from your parents by a certain age. Maybe you want to travel, work overseas or save to buy a home.
Putting a budget in place now means you can immediately start putting money aside for these goals. To help you know how to structure your budget, one good place to start is the moneysmart budget planner. You can download and use this tool straight away across all your devices to improve your finances.
Another budget consideration is to think about how you want to build your savings for later in life. One day, you may want to stop working and will need enough money to live comfortably. Although it might seem like a while away, getting a head start by engaging with your super now will help set you up to reach those long-term goals when the time comes to retire.
3. Make the most of your money
How you choose to make the most of your savings depends on your short and long-term goals. And knowing your budget can help you work out the best ways to maximise your money.
There are different ways to make sure your savings are working for you. You could keep your money in a bank account where it might earn some interest. To help you with medium to long-term goals, you might consider a term deposit or an investment such as shares, bonds or property. When investing, you put your money towards an asset or item with the aim of generating income or a profit over time. Getting financial advice is a good way to decide what option best suits your goals.
Super is a type of investment and plays an important role in funding your future. When you enter the workforce and if you’re eligible, your employer puts a percentage of your income into a super account – known as the superannuation guarantee (or SG). Investing this money for the long-term provides you with the basis of your income in retirement.
You can choose which super fund you want your money going into. So, it’s a good idea to review and compare your super throughout your working life. When comparing funds, it helps to check 3 things:
- Strong, long-term performance
- Competitive fees
- Net benefit (performance after taking away fees)
You can always see how AustralianSuper compares with other funds by using the ChantWest comparison tool through our website.
4. Investing with influence
If you decide to invest your money, you could keep in mind the impact that can have beyond just your own finances. Investing gives you the power to vote with your feet by putting your money into businesses that align with your values or have positive social impacts.
Wherever you decide to invest your hard-earned dollars, take the time to understand that business’ investment approach and how it benefits you. That includes checking how they approach environmental, social and governance (ESG) issues. Would you consider them to be a responsible investor?
At AustralianSuper, investing responsibly for the future means being active on ESG issues today. We believe investing in companies with good ESG credentials helps us provide better returns for members. And it will also help us reach the goal of net zero carbon emissions in our portfolio by 2050.
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Hi, I'm Emma and I'm part of the investment team at AustralianSuper.
This is the first video in our new super and investment explained series exploring our investment approach and how it benefits members.
Today I'm going to take you through six key factors that set us apart from other funds when it comes to investment.
There are plenty of reasons 1 out of every 10 working Australians are members of AustralianSuper, but for many people it's because of our history of strong, long term returns.
Delivering these returns for members takes skill, experience and the right strategy.
So here's how we're able to do it.
Firstly, we're Australia's largest super fund.
That means we're able to access opportunities that aren't available to smaller funds, including multi-billion dollar investments in London's King's Cross and WestConnex Infrastructure in New South Wales.
Next we use what's known as an active investment strategy to help deliver better returns for members.
This means we continually research and monitor investment markets, economies, business and consumer trends and company performance.
Doing this helps us to identify the investment opportunities that have the potential to add the most value for members.
The third factor is our skilled and experienced investment team.
Over 200 investment specialists in Australia, Beijing, London, and New York.
Having a local presence in all these places enables us to access local investment opportunities and deepen our relationships with investment partners.
Managing a significant portion of our investment portfolio in house and using our specialist expertise is the fourth element.
We've been doing this since 2013 and now over 44% of investments are managed internally.
This helps us lower our investment costs for members because we pay fewer fees to external investment managers.
In fact, we are saving over 200 million a year.
Plus we are looking to increase this in the future, delivering additional cost savings to members.
The next factor that's important is our diversified investment strategy.
Think of it as not having all your eggs in one basket.
Investing in a way that reduces risk while trying to deliver the best returns.
For us, diversification means having a mix of investments across different assets, sectors, and geographic regions.
This includes Australian and international shares, private equity, property, infrastructure, credit, fixed interest and cash.
If one investment underperforms over a certain period another investment may provide balance to your portfolio.
A good example of this is the performance of technology shares during the COVID pandemic.
These provided strong returns compared to investments linked to tourism and travel.
It helps members maintain their investments in our premixed options.
The options our experts put together on their behalf through market cycles.
And they know we're managing their money to meet long term investment objectives while considering their tolerance to risk.
The last of the six factors is an important one for many members.
As a responsible investor, where active on what are known as environmental, social, and governance, or ESG issues.
At AustralianSuper, we believe that investing in companies with good ESG credentials helps us provide better returns for members.
This is why ESG considerations are central to our investment approach and decision making, and why we use our influence as a large investor to drive better outcomes on ESG issues, which impact members.
For example, we currently invest in a range of renewable energy projects and plan to have investments of over $1 billion in the sector by the end of 2022.
So there you have it.
Six key factors that help us invest in ways that help members grow their super for the future.
To learn more about how we invest and what we invest in give us a call on 1300 300 273 or visit the AustralianSuper website.
In the next video in this series, we'll be explaining our investment options.
See you then.
It's AustralianSuper, it's super and it's yours.
Everyone has different financial needs and usually a mix of both short-term and long-term goals.
Whatever your goals, planning, budgeting and thinking about your money sooner rather than later can help you structure your savings, investments and approach to achieve them.
AustralianSuper has a great range of tools and resources to help you turn your plans into action – like the super projection calculator to work out how much super you might need and how long it could last.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/pds or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.
AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.