Can money buy you happiness?

Kate Campbell, from the Australian Finance Podcast, thinks it can. She joins Bryce and Ren today on Get Started Investing to talk about how that’s possible.

Here’s 4 ways we think having financial freedom can bring you happiness:

1. Investing in Experiences | Spending money on travel, concerts, or experiences doesn’t always need to be justified by it’s monetary value - you’re creating important memories. Kate suggests examining your routine to find what activities make you happiest, and making sure you’re prioritising those in your financial goals.

2. Increased Choices | Having money gives you the freedom to choose how you spend your time and resources, and greater choice brings with it greater satisfaction.

3. Security | By taking steps to manage your financial wellbeing, you can reduce your stress, and improve your mental well-being. Having an emergency fund for unexpected expenses, knowing your income covers your bills, all of this will reduce day to day stress, allowing you to focus on long term goals!

4. Personal Growth | With financial resources, you can invest in your own education, or further development. This could mean taking courses to acquire new skills, seminars that interest you, or investing in picking up a new hobby. Why not find something that gives you a sense of accomplishment and, subsequently, happiness?

How much should go towards my rent, or my mortgage as a percentage of my income?
I mean, this is what really depend on where you're situated in terms of family and work, because it's not that easy just to relocate in order to reduce those costs. Reducing these costs when you're younger, you should be able to put more towards saving for you sort of first deposit of your own home. But I guess the general rule of thumb, it was no more than 25% of your take home pay, but with interest rates rising, that makes it a little bit more difficult, especially if you're sort of living in a capital city like Sydney or Brisbane, where house prices are pretty high. (Essentially), there's no probably wrong answer, but you know, aiming for that 25 to 30%.
Ben Wauchope on practical ways to establish your financial wellbeing

How do you know if you're getting bad financial advice?
How do you know if you're getting bad advice? It needs to feel right and the advisor needs to explain to you very clearly how this is the right advice. Everyone reaches out to us with very different degrees of financial literacy. I'm hoping that this doesn't happen as much anymore, but (previously) an advisor would sit across the table from their client and try not give too much away because they didn't want to, and they wanted to be seen as the expert. We believe that the more our members understand their strategy, the more likely they are going to then stick to the strategy. Because they understand the implications of the strategy and then inevitably achieve their goals. So if you're seeing an advisor and you don't understand the advice that's being put in front of you, challenge it. Make sure that you're asking questions constantly.
Glen Hare on the cost of advice, best platforms, topping up super and more…

What common mistakes do you see from first-time homebuyers like them, and how do you guide them?
An error I see is people determining their budget based solely on what the bank is willing to lend them. While banks have their lending limits, these shouldn't dictate your entire decision. Just because the bank approves a certain amount doesn't mean it's financially sensible for you to borrow up to that limit! It's crucial to consider your own budget, goals, and objectives. The larger the loan, the bigger the repayments, which can impact your ability to allocate resources to other financial goals like investing or contributing to your superannuation.
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