Do you have big goals for your future, like buying property or retiring early? A good place to start is being mindful about your spending to get ahead with saving and investing. Beyond that, here are a few financial mistakes you could be making that could cost you:

1. You Have Too Much Cash in a Savings Account

Some people end up with too much cash sitting in a savings account because they’re unsure what else to do with that money and may be scared to lose it. While having cash on hand as an emergency fund is advised, the rule of thumb is to aim for between three and six months of fixed and variable expenses readily available.

2. Your Risk Balance is Wrong

If you select your investments randomly, you may find that your overall investment choices are too high or too low for your risk investment tolerance. It’s important to understand your risk tolerance and when you’d want to access your investments – is it for a short-, medium-, or long-term goal? Once you know the answers to those questions, you can determine an investment strategy that is right for you.

3. Your Time Frame for Investing is Wrong

Do you know when you may want to access the funds from your investments? Are you saving or investing to meet a short-, medium-, or long-term goal? Once you know your risk tolerance and your investment time frame, you can determine an investment strategy that suits your needs.

4. You Have Too Many Random Individual Stocks, or Have Allocated All Your Investments to the Same Asset Class

Having a portfolio that is too heavily invested in one industry (for example, tech stocks) or one asset class (for example, Australian Shares) can be risky and not strategic. Diversify your investment portfolio to avoid having all your eggs in one basket.

5. You Aren’t Protecting Your Loved Ones Financially

One step you can take for your superannuation investments is to make each other beneficiaries on your accounts. If your superannuation account has a nominated beneficiary, you may bypass the long process of having your assets in probate. Similarly, if your non-superannuation investments are held in joint names, in the event of one partner’s death, the surviving partner will automatically become the sole owner, saving time and money. Additionally, having life insurance policies with each other as beneficiaries ensures that life insurance proceeds can be used to pay off debts and maintain the quality of life if one partner passes away.

If you need help overcoming any financial mistakes you may be making, now may be the perfect time to engage or reengage with a financial planner.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice, or invitation to purchase, sell, or otherwise deal in securities or other investments. Before making any decision regarding a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.