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Planning for your future financially

If you came into work one day and your boss said that your services weren't needed any longer, what would be the first thing on your mind? Probably something to do with money.

'I'm out of a job, can I survive?'
One in five Australians would not be able to cope financially if they found themselves unable to work for an extended period, according to a survey by the Commonwealth Bank. A third of respondents surveyed said they would only have enough savings to last a month or so, if they lost their income through redundancy or unexpected illness.

Do you have your future set?
Ross McEwan, Group Executive of the CBA's Retail Bank said, "In these challenging economic times, it's now more important than ever for people to make informed choices and plan for the future."

* Australians who have money set aside for emergencies which may include significant home or car repairs - 51%

* Australians that rely on their credit card to pay a large unexpected bill - 33%

The trend towards an over reliance on family and friends for financial advice is also common within Australians.

Who do Aussies turn to for financial advice?

Australians turn to:
- family members for financial advice - 46%
- friends for financial advice - 24%
- a financial planner for financial advice - 25%

Some interesting findings

* Australians that admit they don't have a financial plan for the future - 36%

* Aussies that find themselves struggling financially on a monthly basis - 29%

"There are some simple steps to get moving towards a more secure financial future, the easiest of which is to set a budget. To start with, this can be as basic as jotting down all of our expenses and looking at them against the salary you receive each month," said Mr McEwan.

How is your financial health?

If all this talk of risks and planning has you feeling stressed out, have a quiet breather and spend some time getting the basics in order. Here are six simple steps to help you make informed judgements about the way you use your money so you can feel secure about your financial future.

1. Budget! Budget! Budget!
You've heard it before, but budgeting goes a long way toward achieving financial security. Prepare a monthly budget so that you can be realistic about costs and necessary bills, making it easy to identify how much you can commit to saving each month.

2. Plan and prepare
Consider your short and long term financial goals - a holiday, buying a home, starting a family or planning for your retirement. There are a range of financial products and services out there to help you achieve these goals - the trick is finding the right ones to meet your needs.

3. Seek expert advice
Don't just rely on family and friends for financial advice. Visit your local branch or financial planner to talk about your financial goals and get the full story.

4. Resist the temptation
While it is tempting to spend any extra money that comes your way, like a bonus or your tax refund, try and direct it (or at least a portion) towards your savings or use it to reduce debt such as your mortgage. While a trendy new handbag or the latest plasma TV is nice to have, think about your long term goals and use extra money wisely.

5. Pay as you go
Use your credit card wisely! Pay your credit card off in full each month to avoid unnecessary interest repayments. It is easy to buy everything on credit, but if you don't pay it off in full at the end of the month, you end up paying for the interest on top of your purchases. To reduce the amount of interest you pay, you should also limit the number of credit cards you own.

6. Set some financial goals
Saving without having a goal is like starting a journey without knowing the destination. Setting some financial goals for yourself will make them real and therefore much easier to achieve. Whether you are saving for that dream home or your next holiday, being able to visualise your target will help motivate you into action.

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