The importance of budgeting is to enable you to achieve a life style which will provide financial security and generate family wealth.
Goal Setting
This is the function which requires you to identify the life style you are seeking and to set specific objectives. You may for instance, wish to provide for your children's education, prepare for early retirement or save for an overseas holiday.
The result of the goal setting program enables a financial strategy to be developed to meet your specific current and projected needs.
Reducing Interest Repayments & Loan Period
While personal financial objectives vary, there is however a common goal among clients to reduce interest payments and to pay off the family home quickly. By adopting the strategy offered by Financial Advisers Australia, a discipline develops, that enables you to save and achieve your individual goals.
Why Pay off Your Home Loan First
Most prudent accountants and financial advisers would recommend that their clients endeavour to pay off their non-tax deductible loans as soon as possible. The family home is usually the biggest single purchase we will make in our life time, and as such, forms the foundation of our asset base.
On average, home buyers change their home loan every seven years. If home buyers concentrate on paying off their home, they increase the equity in the asset which allows them to, at an appropriate time, purchase another home or other assets - and hence begin wealth creation.
In general, most homes are purchased with the aid of a loan from a financial institution. The most common form of financing facility is the Principal and Interest Loan. This means, as the borrower meets the repayments, the largest component of the repayments in the early years goes towards meeting the interest cost, and only a small amount is paid off the loan itself.
With this form of loan, the borrowings remain relatively high and are only reduced significantly towards the latter part of the loan period. This effectively keeps the interest payments high . This is good for the financial institution lending the money but not so good for the borrower.
One of the key reasons home owners should set a goal of paying off their home as quickly as possible is that savings plans and other investments attract tax on the income they produce, whereas the Financial Advisers Australia Excelsior Program offers specific taxation benefits.
How to Achieve Your Goals
The key to achieving goals is by forward planning and budgeting. Many of our clients have in the past not approached their financial affairs in this manner. However, with the assistance of the Financial Advisers Australia Excelsior Program they are well on the way to saving money and securing their futures.
Budgeting With Financial Advisers Australia
The Financial Advisers Australia Excelsior Program is a planned strategy to assist you to achieve your goals.
The Financial Advisers Australia Excelsior Program is designed and structured to repay the mortgage and allow adequate amounts for everyday living expenses. In addition, this program provides a safety net which ensures access to funds in the event of an emergency.
Monthly Statements
Unlike normal principal and interest housing loans, where statements are generally issued annually, Financial Advisers Australia will arrange for monthly statements to be issued to show you the exact financial position and act as a useful tool for monitoring the budgeting process.
For more information on Budgeting or Goal Setting contact us for an appointment.epared by John Hehir Financial Advisers Australia (FAA).
