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While the resources sector in WA continues to thrive, a Perth wealth coach is warning those who still have a job as a high paid fly-in-fly-out (FIFO) worker need to quickly change their spending and make a financial plan.
Louise Davies said for those fortunate enough to still have a job in the resources sector, it was time to get really organised with their money.
“The constant change in the resources sector only heightens the importance of planning and not overcommitting,” said Ms. Davies.
“The failure to plan and set aside funds for a rainy day in a highly volatile industry was a recipe for disaster that many former FIFO workers are now facing,” she said.
“I have heard so many stories of FIFO families overcommitting themselves as soon as the high income level is achieved.”
“Once the contract finishes or they are made redundant they struggle to make ends meet in an already stressful situation.”
“FIFO work by its very nature is not secure because it’s based on the fluctuating fortunes of the resources sector which is prone to boom and bust.”
Ms. Davies said those who are still lucky to have a well paid FIFO job should now quickly adopt the following strategies:
- Spending awareness: Look at your latest bank statements and find out where your money is going. If that is not your thing, then track your spending over the next 2 weeks to find where the leakage lies.
- Separate bank accounts: Separate the funds you need to make debt repayments, bills and living expenses. Bills and Debt repayments are fixed expenses and need to be paid first. Only access the money in your living expenses account (food, petrol, consumables) and once that is gone you know you have to survive to next pay day.
- Sticking to necessities: When you make a purchase
- Treat yourself but don’t go over the top: If a purchase is for pleasure then ask yourself if it’s within the budget, is it something you value and will this help you achieve your goals?
- If you are looking at upgrading house or cars – check that the level of repayments are affordable on what you would earn in a local role as well. Make sure your lending capacity isn’t based on overtime or extra income that could stop at any time.
"Many FIFO workers take on the role in order to get ahead and provide a better lifestyle for their family.”
“The problem is that when the big bucks start rolling in they tend to forget about the possibility of job loss.”
“The idea of getting ahead goes out the window and they end up spending everything or worse, taking out a loan against their new high income so they get into higher debt levels.”
FIFO workers and families who want more detail on how to create their own security blanket can access a complimentary financial planning and wealth management consultation by getting in touch with Louise and the team at Fortuna. Louise is a senior, experienced specialist who has helped safeguard and grow the income of many FIFO clients in her time, with a comprehensive understanding of the unique circumstances those in the industry may face.
Louise Davies and Fortuna Wealth Management Pty Ltd ABN 19 608 602 277 are Authorised Representatives of Synchron AFS Licence No 243313 for Financial Planning Services Only.
The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.
