10 Shortcuts Young Professionals In Sydney Use To Test If Their Ability to Generate Income Could Be Compromised In 2016

It’s easy to feel invincible when you first enter the salaried workforce, get a promotion, or graduate from university. When you start taking on new debts and expenses by investing in a home or growing your family, as on top of the world as you might feel, there are bills to pay and ongoing expenses you cannot avoid. It’s more important now than ever to be aware of your financial situation and to protect it.

Everyone thinks about their retirement planning, but how safe are your finances and your family in the short term? Adam Wesek (senior adviser at Fairbridge financial Services) suggests you might be surprised how the following ten factors can impact your income stability and job security. Luckily, there are a few steps you can take to protect yourself.

Relationship Changes

Having kids, getting married, divorcing – any time your family composition changes, your expendable income is likely to change, too. Plan ahead carefully for any predictable major life changes and keep a safety net of funds available for events outside of your control.

As family size grows, expenses increase. We often take our income for granted and assume that if we were financially stable as singles, we’ll be fine as a married couple and later as parents. Unfortunately, the costs of supporting a family may be higher than you expect. For major life changes like the birth of a child or a wedding, don’t forget to adjust your life insurance coverage. An insurance plan that worked for your family previously may no longer be the best option.

Been in Your Job 3+ Years

Average job tenure for Aussies is 3 years and 4 months. Many move to new jobs by choice, but layoffs and firings are also fairly common. If you’re approaching 3 or 4 years at the same job, it’s time to actively start to protect your finances and guarantee that your insurance policies will continue, even if you change jobs. If you’re a new entrant in the job force, be careful. Job tenure for younger employees is lower: 4 years for 35-44 year olds, 2 years and 8 months for 25-35 year olds, and just 1 year and 8 months for those under age 25.

Love the Outdoors

Injuries and accidents happen. If you get hurt as a result of your active lifestyle, do you have cover to help pay for the expenses? What if you’re stuck in bed and unable to work for months? Accidents are always possible, and more so if you live a healthy, active lifestyle. Make sure to consider income protection, trauma, and TPD covers to handle any unexpected injury expenses that permanently destroy your ability to work.

Not in One of These Industries

The Australian economy used to be based on production. Today, our industries are switching to more service-based opportunities. If you aren’t in mining, finance, IT, tech, or transport, you need to keep an eye on employment trends in your industry. Layoffs happen. It’s always better to be prepared.

Smart financial preparation includes making sure you have a few months’ worth of savings set aside – enough to cover basic expenses, including insurance premiums, mortgage or rent, utilities, and food. Saving a little extra never hurts. You may find yourself in need of a vacation to destress after a layoff, or in need of training, materials, or new work clothes. Prepare for the unexpected.

National Trends

According to the Australian government, our incomes are regressing. You might be expecting a raise and get a pay cut instead. Keep an eye on national trends. Adjust your expenses to provide a little cushion in case of a pay cut so that you can continue to pay for vital expenses like insurance, housing, savings, and food.

Recent College Graduates

If you’re expecting to successfully launch into the job market, you may be in for a sad shock. According to the Financial Review, 2/3 of 2014 college graduates were unable to find full-time employment within four months of graduation.

The good news is that newly qualified professionals are often eligible for higher amounts of income protection cover for lower premiums. If you’ve got steady employment don’t miss this chance to invest in your future and to protect your loved ones. It’s a financial move than can pay off for years to come.

Working Full Time

The Australian economy is gradually turning to more part time labour. In the 1990s, 1 in 10 employees worked part time. Today, 3 in 10 work part time. If your employer is using more part time labour, your position may soon become a part-time one.

A transition from full time to part time can significantly impact your income, insurance, and super contributions. If possible, make extra contributions to your super now to guarantee that you will have the funds you need when you retire.

Feeling Bored or Unsatisfied

Job mobility is more common now, and it’s not all the result of employers firing or laying off employees. Voluntary turnover averages 15% per year. If you’re feeling bored in your job and possibilities exist for you to find a new one, make sure you have a financial cushion to help you make the transition. Planning for expenses such as life insurance, housing, and food can spare you some of the stress and long-term income effects of transitioning between jobs.

Family Medical History

No one wants to get sick, have a heart attack, or face a severe illness. Unfortunately, it happens. If you have family members who suffered illness or disease near your age, take care of your financial and physical health.

You may not be able to prevent these events, but you can minimize their impact on your income with Income Protection, Trauma or TPD insurance. (Don’t forget to consult an adviser about the different interpretations of disability and occupation – they can vary drastically from one policy to the next.)

Got a Raise

Watching your income suddenly increase can be thrilling. You worked hard, and you’re making more money as a result. Watch out. Income increases can often tempt one into making more purchases or acquiring more expenses suddenly. Often, these increased lifestyle costs lead to reliance on a higher income. That’s something you’ll need to adjust your income protection insurance to account for, and if you have a family, be sure to adjust your life insurance policy as well. Weigh your financial decisions carefully so you don’t go overboard and spend more than you’ll be making. Remember to always pay your savings and super fund first.

The world of personal finance can be confusing, but there are steps you can take to protect yourself and your family. Making sure you have a life insurance policy that covers your needs, taking care of your health and diet, and watching trends in your industry can help you to avoid unexpected events that could harm your income. Keeping a careful budget can help, too.

Evaluate your finance and insurance situation. Contact a Fairbridge adviser today. Our advisers’ extensive experience in specialist life insurance for professionals in Sydney guarantees you the best policy for your needs.

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This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication. You should read the Product Disclosure Statement (PDS) before making a decision about a product.

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