Shut out the noise for better money choices

From friendly advice to Instagram posts, we take in many influences when making up our mind on money matters. Get tips from an expert on making financial choices guided by your own needs and goals.

Whether it’s the new car you’re thinking of buying or picking the best super fund for your retirement savings, making choices about what do with our money can feel overwhelming. Between social media advertising and well-meaning friends, we end up being exposed to so many options that making the right choice can seem impossible. This is something our advisers experiences in their own life, and in conversations with clients about important financial decisions.

There are three key influences that can impact your money choices and affect your financial decision making. Read on to learn more about each of these and discover what you can do to filter out the noise and focus on what’s important.

1. The influence of friends and family                                              

Being swayed by what peers and family would do in our shoes can often be an issue when it comes to money choices. Group think can definitely play a part in suggesting lifestyle goals that you might not come up with on your own. Have you ever had a friend purchase a boat, camper trailer or other such item and  suddenly several more of your friends have followed suit?

While your family may have more insight into your needs and values than your peers, their words of wisdom may not be the right ones to guide you towards your goals. Be mindful of advice from family and friends too, because what worked well for them, may not work well for you, as your situation may be very different. My grandfather loved property and if you talked to him about money, he will probably have said term deposits and property are the safest way to invest – because that is what has worked well for him. If you speak to my Dad, he will probably say share investing, and hotels are where your money should go – because that is how he built his wealth.

2. Beware the influence of social media

We are also very aware of the impact social media can have on younger clients and their expectations of what a wealthy lifestyle looks like. What we don’t see behind the fancy cars and travel destinations posted on social media is whether these people are financially fit. They may not actually own the assets, or if they do, they might be drowning in debt. Or they don’t show us the blood, sweat and tears they endured to achieve the wealth and lifestyle they are enjoying right now.

In fact, in our experience, the people who feel the most secure in their financial situation are the ones who don’t feel the need to put their good fortune on display by posting photos of their latest luxury purchase. What most people don’t realise is that some of our wealthiest clients don’t look wealthy, until you look at their balance sheets. They are comfortable in themselves and who they are — they are able to manage their stress and emotions and don’t feel the need to show off their wealth to others via social media.

3. The influence of online forums and experts

Another trend that’s becoming more common thanks to the rise of social media is people turning to online forums and groups for advice on their finances. I take part in some Facebook groups and occasionally people post questions about money and investing. Unfortunately, the people who respond are giving financial advice without knowing it and they’re not qualified to do so. The other day someone asked which superannuation fund to go with and the majority of people responded with Hostplus, because of the Barefoot Investor. They, nor the Barefoot Investor, know anything about that person’s situation, retirement goals, including their investment risk appetite, insurance, superannuation balances, age and which superannuation funds they already have.

Take emotion out of your decision

So what can you do to manage all the different types of information and opinions that can come your way when contemplating a big purchase or exploring financial products and services? It is good to try and keep emotion out of the whole process by reminding yourself of your fundamental goals and plans for the future. Most of the time we buy with emotion first, and then try to justify the purchase with logic, It can be hard to think with your head and not your heart but by doing so, you can start making mindful, smart financial decisions. It can be quite hard to disrupt emotional triggers and stick to your goals instead. As financial planners, when we’re advising a client it’s easy for us to keep the emotion out of financial decisions and help people stay focused on their goals and future plans.

Seek professional advice and make a plan

Being financial planners, we have the advantage of acting as our own professional expert on money choices. If you’re finding yourself confused by your options or feeling that cues from social media or family are clouding your judgement, it can really help to have an expert to help you explore your reasons and motives financial decisions. They can also help you develop a plan that you can keep in mind as you navigate money choices, large and small.

If you have clear financial goals, which are motivating and purposeful, you’ll find it easier to make smart financial choices and become financially well organised. In our initial appointments with clients, we spend 60-90 minutes discussing goals before we talk about financial strategies. Writing these goals down can help you make them your priority and it helps you make the connection between your own financial strategy and what you really want to achieve.

To support you in making money choices in your best interests, a financial planning professional can help. They can work in partnership with you to understand your goals and recommend a plan to give you the confidence that your financial future is secure.

With so many different scenarios to consider, it is wise to work through your options with a financial planner who can help you explore ways to make the most of every area of your finances. If you would like to know more, feel that you or anyone you know requires advice, or would simply like a review of your financial situation, please visit our contact page call our office today to arrange an appointment on (07) 5574 0667.

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Note: This communication (including taxation) is general advice only and does not consider your personal circumstances. You should consider whether the information is appropriate to your individual needs, and not act on any information without obtaining professional financial advice specific to your circumstances. This communication including any attachments is intended solely for the use of the individual to whom it is addressed. Any unauthorised use, dissemination, forwarding, printing, or copying of this communication including any attachments is prohibited. It is your responsibility to scan this communication including any file attachment for viruses and other defects. To the extent permitted by law, we will not be liable for any loss or damage arising in any way from this communication including file attachments.
The information has been given in good faith and has been prepared based on information that is believed to be accurate and reliable at the time of publication. The information is general in nature and does not take into account your particular financial needs, circumstances and objectives.

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