Sumit Sharma (IT Project Manager)
What are your financial goals?
I’d like to start a property portfolio to generate income once I’m retired. This starts with one house and by the time I’m 40, I want to have at least two properties – I’d also like to invest in property back home in India. Another one of my goals is to have a healthy super account which will help provide income in retirement.
How do you plan your cash flow (income and expenses)? Do you use a budget planner?
I budget every month. I know what my usual expenses are so I set money aside for those at the beginning. I also keep a buffer amount for any unexpected expenditures and whatever remains in the end goes straight into my savings account. I use an app called budget expense report where I key in my income and expenses and that tells me how much I’ll end up saving after a certain amount of time. It’s a good planning tool.
Do you have an emergency fund?
Yes, I do. I created one by taking certain things into account: my parents’ medical expenses, any unanticipated health expenses I might have, unplanned travel to India, or if I lose my job – there should be enough in the emergency fund to take care of any or all of these things.
Do you send money back home?
Yes, I do. I contribute towards my parents’ healthcare. I also send them money now and then for them to travel someplace. It’s not a lot, but I like to do something for them when I can, especially when they’ve done so much for me.
Have you thought about acquiring property before settling into a long-term relationship?
Last year, I had been thinking about buying a unit, but I really didn’t like the designs so I put the idea on hold. Now that I’m 34, I don’t know if getting a ‘bachelor pad’ makes any practical sense, so I’ve decided to buy a house after I get married.
Will you discuss money matters with a prospective partner? Will their attitude to money be an important consideration?
Yes, I would like to discuss money matters with a prospective partner. I think transparency with regards to money is especially important in a relationship. That way, we’ll both understand each other’s attitudes towards money as well. I’d like to give my partner an idea of my financial situation – my liabilities, loans, etc. It’s only fair to give her a heads up! And of course, her attitude to money is an important consideration, I would want to make sure she fits into my plans as well as I do in hers, right?
When choosing a job or career, which is more important: job satisfaction or income?
Job satisfaction, without a doubt. I need a job that motivates me to get out of bed every morning. It’s not that money isn’t important, but what’s the point of earning money if it takes the joy out of everyday life?
Do you use your credit card as a tool for getting by during the month (repaying it at the end) or do you accumulate debt because you spend too much?
I used to use my credit card to spend, but not anymore. Now I use it as a fall back for any unexpected expenses. And I keep a cap of $3,000 on it.
Do you use any tax saving methods? Are you aware of them?
As a self-employed person, I can put some expenses through my business which helps with cash flow. Make sure you have a good bookkeeper or accountant who can advise you! I also make additional contributions to super on a pre-tax basis. This helps grow your super AND save in tax. And lastly, I use many of the tax concessions available in Australia to reduce my taxable income, like donating to charities like World Vision and UNICEF.
Tips and tricks you use to curb expenses and stop spending and start saving?
I’m a bit of an impulsive shopper, so I just try to weigh what I need against what I want. It’s pretty much the only trick I have!
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