As you navigate the intricate landscape of mortgages, doubts and uncertainties may naturally surface, yet hidden within these challenges lies the potential for profound growth and empowerment.
I yearned for a clear and actionable game plan to guide me towards financial security and prosperity.
It’s this realisation that fuels my passion to equip you with a game plan born from firsthand experience. I call this: Financial Foundations: Crafting a Game Plan for Growing Financial Confidence. It is Stage Two in a signature system I have developed called The Brava Finance Way. It’s a process I walk my customers through that strives to help them assume control of their finances as part of their journey (back) into the property market.
In my experience, I believe this stage is crucial for setting the groundwork for your financial journey. It involves a comprehensive evaluation of your current financial situation, establishing a clear vision for your financial future, and building robust financial habits. By creating a strong foundation of finance, you can move forward with informed decisions and strategic actions that align with your long-term goals more confidently.
Join me as we embark on a journey to craft solid financial foundations and cultivate unwavering confidence in managing your finances.
Please note I am not a financial adviser. The aim of my game plan is to help you take that first step, to change your mindset and start the action that I believe is required for improving your financial confidence. Following these steps in my game plan does not mean you will automatically achieve financial security. It is intended to be a guide only. These are the steps I took to improve my financial confidence and security.
Creating a baseline is the very first step you should take. You will need to:
Step 1: Assess your starting point
Reflect on your current financial situation
- Take the time to sit down and reflect on where you currently stand financially. This includes understanding your overall financial health, your financial goals, and any concerns or challenges you may be facing.
- Consider factors such as your sources of income, your spending habits, your saving and investing behaviours, as well as any debts or financial obligations you may have.
Evaluate your income, expenses, assets and liabilities
- Income: Calculate your total monthly income from all sources, including wages, bonuses, investments, rental income, etc.
- Expenses: Track your monthly expenses across various categories, such as housing, utilities, transportation, groceries, entertainment, debt repayments, etc. This helps in understanding where your money is going and where you might be able to make adjustments.
- Assets: List all your assets, including cash savings, investments, retirement accounts, real estate properties, vehicles, valuable possessions, etc.
- Liabilities: Make a list of all your liabilities or debts, such as mortgages, car loans, credit card debt, student loans, personal loans, etc. Include the outstanding balance, interest rates, and monthly payments for each.
Identify your strengths and weaknesses
- Take stock of your financial habits and behaviours.
Identify areas where you are doing well and areas
where you could improve. - Consider your strengths, such as consistent saving
habits, strong budgeting skills, or a good understanding
of investment principles. - Also, recognise your weaknesses, such as overspending
tendencies, a lack of emergency savings, or avoidance
of financial planning.
Assess your financial skills and knowledge gaps
- Evaluate your level of financial literacy and your understanding of key financial concepts, such as budgeting, investing, debt management, insurance,
taxes, retirement planning, etc. - Consider seeking out resources, courses or professional advice to fill these knowledge gaps and improve your financial literacy
Step 2: Create a vision
You can create a vision for your financial future by setting financial goals. This requires you to:
Visualise the life you want
- Take some time to visualise your ideal life. What does financial security look like to you? This could include aspects such as owning a home, travelling the world,
starting a business, supporting your family, retiring comfortably, or having the freedom to pursue your passions without financial constraints. - Consider not only material possessions but also experiences, relationships and personal fulfilment that contribute to your overall sense of well-being and happiness.
Clearly define your financial goals
- Once you have a clear vision of your desired lifestyle and financial security, translate these aspirations into specific, measurable financial goals. These goals should be realistic, achievable, and aligned with your values and priorities.
- Break down your goals into short-term, mediumterm and long-term objectives. Short-term goals may include building an emergency fund or paying off high-interest debt, while long-term goals could involve saving for retirement or purchasing a home.
- Visualise yourself achieving these goals and imagine how your life will be transformed as a result. This can help you to stay focused on, and committed to, your financial plan.
Embrace a modern mindset
- Challenge any outdated beliefs or misconceptions you may have about money and finance. Recognise that financial success is attainable regardless of your
background, gender or past financial mistakes. - Embrace a growth mindset that emphasises learning, adaptability and resilience. Understand that financial planning is a dynamic process that requires continuous
education, self-reflection and adjustment. - Seek inspiration and guidance from modern financial role models, thought leaders and resources that promote inclusivity, diversity and empowerment in personal finance.
Step 3: Build a foundation
You can build a solid foundation by establishing healthy financial habits. Below are some tips that I found useful in my own journey, which I’ll share with you in a general sense:
Budgeting
- Start by tracking your income and expenses to understand your current spending patterns. This doesn’t need to be fancy – a simple spreadsheet does the job!
- Create a budget that outlines your income sources and allocates funds for essential expenses, savings, debt repayment and discretionary spending.
- Be realistic and flexible with your budget, allowing room for unexpected expenses or changes in income. • Regularly review your budget and adjust as needed to ensure it continues to reflect your financial goals and priorities.
- Set savings goals for both short-term needs (emergency fund, holiday, etc.) and long-term objectives (retirement, children’s education, etc.).
- If you’re able to comfortably put aside savings, creating an automated transfer may help your savings be more consistent.
- If you’re in the position to dabble into investing, or wanting to learn more about what your goals or risk tolerance are, visiting the link below can show you what
popular investment choices Australians are making and why. https://www.forbes.com/advisor/au/investing/ best-low-risk-investments-for-australians/ - Monitoring your investments is very important for staying on top of your finances. It’s recommended to receive professional financial advice before making adjustments to your strategy to stay on track with your financial objectives.
Debt management
- Take inventory of your existing debts, including balances, interest rates and minimum monthly payments.
- Prioritise debt repayment based on factors such as interest rates, loan terms and financial goals.
- Consider debt consolidation options to streamline multiple debts into a single, more manageable payment with a lower interest rate.
- Explore strategies such as the debt snowball method (paying off the smallest debts first) or the debt avalanche method (paying off the debts with the highest interest rates first) that may accelerate debt repayment.
- Avoid taking on new debt whenever possible and focus on living within your means to prevent further financial strain.
Step 4: Educate yourself
Investing in financial literacy and self-development is an essential step in boosting your financial confidence. You can:
Pursue learning opportunities
- Take advantage of a wide range of resources available for financial education, including books, online courses, webinars, workshops, podcasts and educational websites.
- Look for reputable sources of information that provide comprehensive coverage of personal finance topics, such as budgeting, saving, investing, retirement planning and tax management.
- Consider starting with foundational books or courses that cover basic financial concepts before diving into more advanced topics.
- Explore specialised resources tailored to your specific interests or needs, such as investing in real estate, starting a business or managing debt.
Seek personalised guidance and support
- Consider working with a financial adviser or planner who can provide personalised guidance and advice based on your individual financial situation, goals and risk tolerance.
- A professional adviser can help you develop a customised financial plan, implement investment strategies, navigate complex financial decisions, and adapt to changes in your circumstances over time.
- Seek recommendations from trusted sources or professional associations, and conduct thorough research to find an adviser with the right qualifications, experience and approach to meet your needs.
Stay informed
- Stay informed about current events, economic trends and market developments that may impact your financial decisions and investments.
- Follow reputable financial news outlets, subscribe to newsletters, and utilise financial apps or platforms that provide real-time updates and analysis.
- Join online communities, forums or social media groups dedicated to personal finance and investment discussions to stay connected with peers and experts in the field.
- Attend industry conferences, seminars or networking events to gain insights, exchange ideas, and stay abreast of emerging opportunities and best practices
Step 5: Take action
You can implement your personalised financial plan in the following ways:
Set priorities
- Review your financial goals and prioritise them based on urgency, importance and feasibility.
- Break down each goal into smaller, manageable tasks or action steps.
- Develop a timeline for achieving each goal and allocate resources accordingly, such as time, money and effort.
- Focus on taking consistent and disciplined actions to make progress towards your goals, even if they are small steps forward.
- Regularly reassess your priorities and adjust your plan as needed to stay aligned with your evolving circumstances and aspirations.
Address obstacles
- Anticipate potential challenges or obstacles that may arise on your financial journey, such as unexpected expenses, market fluctuations, or changes in personal
circumstances.
- Develop strategies to overcome these challenges, such as building an emergency fund, diversifying your investments, or seeking additional sources of income.
- Be flexible and adaptable in your approach, willing to adjust your plan or pivot if circumstances change or if certain strategies are not yielding the desired results.
- Seek support from trusted advisers, mentors or peers to brainstorm solutions and provide encouragement during difficult times.
Celebrate milestones
- Take time to acknowledge and celebrate each
milestone and achievement along your financial
journey, no matter how small. - Find meaningful ways to reward yourself for reaching
milestones, whether it’s treating yourself to a small indulgence, taking a break to relax and recharge, or
sharing your achievements with loved ones. - Reflect on how far you’ve come and use each milestone as an opportunity to reaffirm your commitment to your financial goals and aspirations.
Step 6: Connect with others
The journey to financial confidence and security doesn’t have to be a lonely one. On the contrary, you should:
Curate your social media feed
- Take control of your social media experience by curating your feed to include accounts of inspirational women who have achieved financial independence.
- Follow successful female entrepreneurs, investors and financial experts who share their journeys, insights and strategies for building wealth.
- Surrounding yourself with positive and empowering content can help reshape your mindset and inspire you to pursue your own financial goals. Seek mentorship and guidance
- Look for opportunities to connect with inspirational women in your community or online who have achieved financial success.
- Engage with them through networking events, webinars or mentorship programs to learn from their experiences and gain valuable insights into navigating the path towards financial independence.
- Having role models and mentors can provide encouragement, guidance and support as you work towards your goals.
Take inspired action
- Use the inspiration and knowledge gained from engaging with inspirational women to take action towards your own financial independence.
- Set specific, achievable goals based on the examples and advice shared by these women. Break down your goals into actionable steps and consistently work towards them.
- Maintain your motivation by staying connected with the supportive community of women who are also on their journey towards financial empowerment.
Step 7: Connect with others
If you’re truly determined to rewrite your financial narrative, you must:
Continuously evaluate your progress
- Regularly review your financial goals, objectives and the action steps outlined in your financial plan to assess your progress.
- Track your financial metrics, such as savings rate, investment returns, debt reduction and net worth, to gauge how effectively you’re moving towards your goals.
- Identify areas where you’re excelling and areas where you may be falling short of your targets.
- Reflect on any changes in your circumstances or priorities that may require adjustments to your financial plan.
Adjust your strategy as needed
- Be open to modifying your financial plan in response to changes in your circumstances, financial markets or external factors.
- If you encounter obstacles or challenges, reassess your approach and consider alternative strategies to overcome them.
- Stay flexible and adaptable in your thinking, willing to pivot or make course corrections as necessary to stay on track with your goals.
- Seek advice from financial professionals or mentors to help you navigate complex decisions and make informed adjustments to your strategy.
Stay proactive in pursuing financial success
- Take ownership of your financial well-being by actively engaging with your finances and taking proactive steps to improve your financial situation.
- Keep yourself informed about changes in tax laws, investment opportunities, and other relevant financial developments that may impact your strategy.
- Continuously seek opportunities for growth and improvement, whether through further education, skill development, or exploring new avenues for income generation or wealth accumulation.
- Cultivate a mindset of resilience and determination, recognising that financial success often requires persistence, patience, and the ability to adapt to changing circumstances.
By following this framework, you can build greater financial confidence and empowerment. Starting with a thorough assessment of your current financial situation, followed by setting clear goals, you can create a roadmap tailored to your aspirations.
Through the establishment of healthy financial habits and ongoing investment in financial literacy, you can lay a solid foundation for long-term success. Challenging outdated mindsets can make a big difference to building financial confidence.
Taking action, continuously evaluating progress, and remaining proactive throughout the process ensure adaptability and resilience in the face of challenges. Ultimately, by committing to this holistic approach, you are working towards unlocking your full financial potential, achieving more stability and, ultimately, more fulfilment in your life.
Remember, the ultimate prize is financial confidence and security! In creating a solid game plan, you are more likely to embrace a modern money mindset and make moreinformed decisions, putting you a step closer to achieving financial freedom.
In the next chapter, we start to look at the wonderful world of mortgages in more detail, with a comprehensive list of mortgage-related terms and phrases. I also highlight some of the key benefits of working with a mortgage broker… would be rude not to lol!
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