Andrew Zbik

The average Australian now will keep their job for three years and four months and have 17 jobs until retirement. That’s 56 years working and making Australian businesses and the economy one of the most resilient in the developed world.

However, the mean superannuation balance at age 65 for males is $252,536 and females is $144,461. Most Australians do not even meet the Australian Superannuation Funds Assoc. retirement standard for a comfortable living of $54,215 for a couple or $38,675 for a single.

Why do we fail so much at creating our own wealth? Whilst making our employers rich?

It’s simply because most Australian’s do not manage their household budget with a business mindset. 40% of businesses in their first 3 years fail due to inadequate cash flow management. I reckon 99% of Australian households fail their retirement goals because they have no idea where they spend their money.

The days of having to build your own excel spreadsheet are over. There are plenty of automated budget tracking applications available to help to automatically track your spending. I personally use and recommend Moneysoft to my clients. It enables us to link bank accounts, credit cards and loans and automatically assign each expense to a designated category.

We can now get a thorough understanding of what a family’s basic living expenses are (food, shelter (home) and clothing) and what are their lifestyle expenses (holidays, entertainment…my wife buying that 17th cushion for the couch…me buying that 5th golf club that probably won’t fix my chipping anyway).

Once we gain a clear understanding of where a household income is being spent we can then create a budget with a set savings goal. It’s a simple business principle of set a budget, measure your expenses, change behaviour to end the year with a profit. This is step one to avoiding being another failed retirement income statistic.

By Andrew Zbik, Senior Financial Planner, Omniwealth

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