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How to set your future self up for financial success

This article was written by our friends at Spaceship. Spaceship offer a simple and afforable way to get you started in investing.
You’re really doing it. Being your own boss, taking your future into your own hands, embracing life head on.
The benefits of living life on your own terms are self-evident.
What’s less obvious is that your extra freedom as a sole trader or freelancer can come at a cost. You need to do a little bit more admin to keep your personal financial wellbeing on track.

What do we mean by personal finance?

Your personal finance includes such things as:

  • Your personal budget, which is the way you prioritise how you spend and save your money.
  • Your net worth, which is the difference in value between your assets and liabilities.
  • Any savings or investments you have, including how they’re performing, and how you manage them.
  • Any lines of credit or loans you’re paying off.
  • Your superannuation.

Why set personal finance goals?

As a business owner, you’re no stranger to setting goals. Finding new clients or launching a new product are goals you’ve already set and achieved.

Think back to how you achieved them. Did you decide the outcome you wanted, then research the steps that would get you there?

You can use this approach for your personal finance. There are different approaches to goal setting, but one thing is clear. Your best bet could be to set a massive goal. Something truly outrageous. Research shows it’s more effective than just doing your best, setting an easy goal, or setting no goals at all.

So what goals should you set?

A common approach to financial goal-setting is to break your goals into a timeline.

Moneysmart suggests:

  • Short term (0 to 2 years).
  • Medium term (3 to 5 years).
  • Long term (5 years of more).

Now the fun begins. What kind of life do you want to live? What does it look like?

Introducing: Future you

Making good long-term financial decisions requires a strong connection to your future self.

Behavioural economics calls it ‘future self continuity’. It’s the concept of seeing your future self as a total stranger if you don’t feel connected enough to it. And if your future self is a stranger, you don’t care so much about how your current decisions may impact it.

Fortunately, setting SMART goals may help connect you to your future self.

The concept of the SMART goal has been around since 1981. It may be a good framework for setting your financial goals. SMART goals are specific, measurable, achievable, relevant and time-bound.

To set a SMART goal, it helps to understand where you are right now. Do you have an accurate picture of all your personal income and expenses? Do you keep your personal and business income separate? Are you contributing to super or investing? Do you have an emergency fund?

Short-term you

Who will you be in two years? What will your life look like?

What’s achievable for you depends on your current circumstances.

If short-term you needs a better budget, start there. Saving an emergency fund may be a good goal. Recommendations range from saving three to six months’ worth of expenses.

It’s generally recommended to pay down any ‘bad’ debt you have, such as credit cards or car loans. It could also be a good time to start to invest or make extra super contributions.

It’s worth getting a handle on superannuation as early as you can.

Research shows that 20% of self-employed people have no super at all. And if you do have super, it’s likely to be lower than that of somebody who’s employed by someone else.

Why is this so? It’s because as a self-employed person, it’s up to you to contribute to your own super, unless you draw a wage.

If you haven’t been contributing to your super, it may be a good time to start. Even setting and forgetting a weekly $20 super contribution could see your investment grow to almost $70,000 after thirty years, assuming a 5% yearly return after any fees and costs. Delaying your start by five years would reduce that amount by nearly $20,000. Just remember you generally can’t touch your super until you retire.

Happily, there can also be tax benefits, which the ATO or your Hnry accountant can tell you about. As with investing, the earlier you start, the better your results tend to be over the long term.

Medium-term you

Medium-term you has a little bit more time up your sleeve.

Higher risk investments, such as property and shares, may become a good option. These are more volatile than savings and have a recommended timeframe of at least five years. So, if you start investing now, you may be right on track for medium-term you to reap rewards.

Investing can be easier and more affordable than you think.

Micro-investing is one method that makes it easy. It involves investing smaller amounts in assets such as shares or managed funds.

Spaceship is an Australian company that has a micro-investing app. It lets you micro-invest in managed funds made up of global companies. You can set up a regular investment of as little as you like, so you can start building wealth.

Again, there are benefits to starting early. A $50 weekly investment in a managed fund that returns 5% annually after any fees and costs could be worth over $14,000 in five years. Keep in mind this is just an example. Your experience would be different and people do lose money from investments.

If mid-term you wants to buy a home, though, there are some things to keep in mind. It can be harder for a business owner to get a home loan than an employee who has predictable income. Evidence of regular saving that you can show your lender is really important here.

Long-term you

Long-term you? What a superhero. How good does it feel to have your finances completely nailed?

Ten years from now the world will look completely different. But one thing is certain: you’ll be ten years closer to retirement.

Most Australians will have a retirement that lasts for at least 25 years. If you want to live those years in comfort, you need to make sure your super will stack up. The Australian government can help you work out how much super you may need.

If you need to, you can make extra contributions to your super fund to get back on track. If you’re a Spaceship Super customer, you can find out how to do so using the Spaceship app.

Welcome to the future

So, what goals will short-term you, medium-term you and long-term you thank your current self for setting now? Once you’ve set your goals, consider using the allocations feature in Hnry, or setting an investment plan in the Spaceship app, to help you achieve your goals.


The information in this blog post is general in nature as it has been prepared by Spaceship Capital Limited (ABN 67 621 011 649, AFSL 501605) without taking account of your objectives, financial situation or needs.
Spaceship Capital is the issuer of the Spaceship Origin Portfolio, Spaceship Universe Portfolio, and Spaceship Earth Portfolio (Spaceship Voyager) and the promoter of Spaceship Super. Spaceship Super is issued by Diversa Trustees Limited (ABN 49 006 421 638, RSEL L0000635) as trustee of the Tidswell Master Superannuation Plan (ABN 34 300 938 877) (Fund). Spaceship Super is a sub-plan of the Fund.
You should consider the relevant Product Disclosure Statement and Reference Guide, and obtain appropriate financial and taxation advice, before deciding whether Spaceship is right for you.

DISCLAIMER: The information on our website is for general educational purposes only. It doesn't cover all situations and circumstances, and shouldn't be taken as direct tax advice. If you're looking for specific help with your taxes, join Hnry and our team of experts can provide you with assistance tailored to your business needs.

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