Goals may be short term, such as paying off credit cards or saving for a holiday; or medium or longer term, such as paying off a mortgage or ultimately saving for retirement.
Putting more into the mortgage
One strategy that is relatively simple to both understand and implement is making additional mortgage repayments.
A home loan repayments calculator allows you to see how much time and money you could save on your mortgage by paying even a little bit extra each month or alternatively by making payments more frequently.
Sort out your super
Superannuation can be a way of boosting your wealth by helping you prepare for the future.
It’s easy, particularly when you’re younger, not to think about your super too much, but the sooner you start, the bigger the impact you're likely to have on the amount of super you’ll end up with.
Look at making some extra contributions if you can afford to and make sure you have a look at the investment option your super is invested in.
A common conundrum is whether to prioritise paying off the mortgage or adding extra money to super. While this will often depend on your individual circumstances including factors such as your age and the balance of your mortgage, it's good to remember that both options are ultimately helping to build your wealth.
Are you ready to invest?
Once you know where you’re headed with your mortgage and you’ve paid attention to your super, many people begin to think about investing. This can come in a variety of different forms such as investing in shares, property, managed funds or maybe even all these things.
Regardless of how you decide to invest, being clear on your own goals, financial situation and risk appetite is key. Understand how much risk you’re comfortable with, understand the risk of what you are investing in and consider some of the key principles like diversification, which can help spread risk in case a particular investment doesn't go well.
With so many investment possibilities, it’s important to know what you are trying to achieve so you can decide what strategy and structure is right for you.
Do you need help?
If you do choose to invest, do some research of your own and develop an investment plan.
It’s also important to determine whether you’re comfortable operating by yourself or whether you want to build a team around you and, if so, how you want to engage with the people you consult. Depending on your circumstances you might want to seek professional financial advice.
Stay in the driver’s seat
Being accountable and involved with your money is a really important step in building wealth. That ultimately means understanding what is being done and why so you can also stay accountable for your finances and reaching your goals.