Master these tips to take control of your financial future

Master these tips to take control of your financial future

Louise Lakomy

This article from Louise is included in our Reinvention is the new Retirement eBook. Download the full eBook for free here.

With a little guidance from a financial planner, you can make decisions for your life based on what’s the best scenario for you in the long term, writes Louise Lakomy.

It’s not surprising to me as a financial planner that a large portion of the next generation won’t have sufficient funds to retire comfortably. One assumption that a lot of people make is that they will receive government benefits to assist them in retirement, but this shouldn’t be assumed as it may not be an option into the future. To help you achieve the retirement you want, I have outlined below the tools and steps that I believe are essential in assisting the financial wellbeing of the next generation, as well as some success stories of how these have worked for others, so you can see how they could also work for you.


Putting a budget in place is the most important tool anyone has in controlling their financial future. And the earlier in life that you start, the better. Keeping a budget helps in framing spending behaviours and awareness of outgoings. It also helps you to contain expenses that are not affordable.

Five years ago, I had a 42-year-old single female with no dependents come to see me. She was earning around $120,000 per annum but was paying $1,000 per week in rent as she had moved to a trendy inner-city suburb to be closer to the action after splitting up with her husband.

The reality was these choices were eating away any hope of her saving for her own home, which was her primary goal. After preparing a plan around her goals and objectives, we met to discuss the ways in which she could reach these financially. She left excited and determined to make her dream a reality.

Prior to our meeting she never really dreamed she would make this key goal a reality, but after our conversation she rearranged her affairs, tracked her spending habits and within 12 months she had saved enough money to put down a deposit on an apartment that is now her new home.

Cash flow modelling:

Once we can ascertain how much expenditure a client has, the next tool is to use a cash flow modelling spreadsheet to predict how their future looks financially. By inputting all the inflows and outflows and making assumptions on growth rates and salary increases, we can get a guide on affordability and assist in framing the decision-making process. The ultimate goal in doing this is always your needs and objectives, and from this basis the cash flow will identify any gaps. When purchasing a new home or investment property it gives you peace of mind knowing that the cash flow works not only in the short-term but also the long-term.

Mr and Mrs Jones already owned an apartment and came to see me about whether they could afford to upsize to a house with a good-sized backyard for their young children. In this instance they wanted to know whether they could afford to keep the existing apartment and purchase a house or if it was better to sell the apartment outright and buy a new home. After undertaking cash flow modelling of their specific circumstances, it was recommended to sell the apartment. This decision was based on a few factors but in particular, the cost of having a large non-deductible debt against their new home was prohibitive versus selling their apartment and using the equity from the sale to have a smaller debt.

Being realistic:

When discussing finances with clients I often see high hopes and no real sense of reality of what a person’s financial future entails. One of the roles a financial planner takes on is also about giving clients a realistic expectation of the future and sometimes that entails telling them to sell assets that they can’t afford maintain. Downsizing is often an area for review for retirees if clients can’t maintain their cost of living and expenditure related to their home.

Last year I saw a couple who were reviewing their retirement needs. They owned a $100,000 boat and were spending $10,000 per annum on maintenance, insurance and mooring costs for it. Whilst they were working, the upkeep of the boat was affordable, but it wouldn’t be so easy in retirement. After undertaking retirement cash flow modelling for them I told them the boat needed to be sold as they couldn’t afford the ongoing costs as well as a yearly holiday. They were actually relieved to have made a decision to sell the boat as it had been a point of procrastination for some time and felt the funds would be better used on living expenses and holidays.


We have gone from a generation of savers and only paying cash for items to paying for everything on credit and this is one of the biggest challenges facing the next generation. As soon as you begin your work life it’s a good idea to set up a savings plan. A simple option is to open a high interest earning account (not much is earned in our current environment!) and transfer, say, $100 per week into it where you can’t touch it. As funds grow you can consider buying some managed funds or shares to increase growth on the funds whilst you are saving for an item.

I have a client with two young children who each have $5,000 in a bank account which they’ve received as gifts from family members. We recommended investing these funds into a diversified managed fund and topping up with additional funds they received each birthday and Christmas as a forced savings plan for their future.

Want to read more from Louise? Read her article on making dealing with your finances less stressful.

The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice or its related entities. This information is general in nature and does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. To view our full terms and conditions, click here.

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