Let me introduce you to two couples, now in their mid-thirties. Dave and Carla have two primary school-aged children, one car and own their own home. Dave works as a self-employed electrician and earns around $65,000 per annum, while Carla earns only around $12,000 per annum from making and selling homemade jewellery at local markets on the weekends.
Dan and Mel also have two primary school-aged children, as well as two cars, a motorbike and rent their home. Dan earns about $60,000 per annum as an automotive salesperson and Mel earns about the same as a customer service officer at a call centre.
Dave and Carla are living comfortably and have almost no financial stress, whereas Dan and Mel – who have a significantly larger combined income – are struggling with daily financial stress, avoiding calls from debt collectors and have been rejected multiple times for a home loan, despite both having had long-term employment. How is this possible? Why does one couple live so comfortably, while the other – with almost double the income – struggle so much? Simple – Dave and Carla had a good financial plan in place when they were younger, whereas Dan and Mel didn’t.
Dan and Mel have both worked hard since their early 20’s, but have always lived week-to-week. They have been able to buy the latest mod cons, such as smart phones, tablets, fancy cars, big-screen TV’s and the latest, greatest toys for their kids; however, at least once every couple of weeks, they find themselves eating baked beans on toast for dinner and ringing all of their utility providers to ask for extensions on their bills, due to being short of money. They have also defaulted on many recent bills and are both ex-bankrupt, due to getting into financial trouble in their mid-20’s. Although now discharged, this bankruptcy means that neither Dan nor Mel have been able to apply for a home loan. Dan and Mel feel as though they are never going to reach their goal of home ownership, and this adds extra stress to their lives.
In comparison, during their early 20’s, Dave and Carla consulted with a financial planner, who helped them to identify their life goals (primarily to own their own home and save for their children’s future private schooling) and showed them how to work with their money and lifestyle choices in order to reach these goals. They did have to make a few sacrifices to begin with, but these sacrifices soon became second nature and – as the years wore on – their ever-growing financial security allowed them to budget in quite a few luxuries, which made the sacrifices worthwhile. In their late 20’s, Dave and Carla realised their dream of purchasing their own home – much earlier than either of them imagined – and even had about 40% of the deposit saved up in advance! They still need to make the occasional sacrifice – such as only owning one car between them – but they have again saved enough money to be able to indulge in an overseas family holiday this year. Dave, Carla and their children are extremely happy, their future is bright and they credit this happiness with making the choice to see a financial planner when they were young.
In this rush of a world, young people – with their fast-paced careers and demanding family lives – hardly have time to plan their own dinner, let alone a financial strategy designed to take them comfortably into the future. Thankfully, EWL make financial planning a breeze! We help you to identify and quantify your financial goals, then work with you to put sensible, tailored strategies in place to help you reach them.
We believe that ‘Wealth is not a measure of how much money you earn; it is a measure of how much money your money earns’, so we work with you to maximise the worth of every cent that you earn. We act as your personal financial trainer – guiding, motivating, advising and inspiring you to achieve your goals sooner and more effectively – not just now, but long into the future.
Here at EWL Financial Planning, we believe that the time to get smart with money is during your younger years, but it’s never too late to get a good grip on your finances, so contact us today for a free initial consultation with no obligation and discover how to live like Dave and Carla!