Ashley and Sam came to see me because they have their hearts set on a major overseas trip, but are not sure how they can afford it.
Although they are both earning approximately $75k income each and don't own property, they're not confident they can achieve their savings goals. They believe their current income and expenses are close to break even.
"We both have a dream of travelling through South America for six months. We've got to pay for air fares, accommodation and tours plus all our living expenses. While we're there we want to do as much as possible so we're going to need a lot of savings to fund it. And at the same time, we have some financial commitments here we have to keep covered while we're travelling - we're renting so we need to pay for storage of our stuff. Sam and I are also going to be giving up our jobs to go. I work in hospitality - he's a physio - so we have to be able to live without income for half a year!"
"Our main issue is that we want to be able to save as much as possible in the quickest amount of time, but we don't have a huge amount of extra money after we've paid the bills and neither of us has the time to take on a second job."
What the budget analysis revealed...
I worked with Ashley and Sam and actually when we completed a budget analysis and assessed their financial position we found that only $80k of their $150K income was spent on expenses! Given that, I was able to recommend a savings plan to help them towards their set target and I also restructured their personal insurances to have premiums paid within super so they could manage their cash flow better.
Ashley and Sam's result
Sam and Ashley can now save around $3k per month and as a result may be able to shorten their savings time frame from two years to 18 months.
This information is current as at 16/09/2013.
BT Financial Group - A Division of Westpac Banking Corporation. This document provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information does not constitute financial advice. It has been prepared without taking account of your objectives, financial situation or needs. Because of this, before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation and needs. Information in this blog that has been provided by third parties has not been independently verified and BT Financial Group is not in any way responsible for such information.