While the start of a new financial year isn’t met with the same celebrations as January the 1st it is a great time to conduct a personal financial health check. Our tax system is based on the financial year so there are many benefits to putting some new practices in place.
Below are some tips to consider:
1. Put something away for your future self
a. Salary sacrificing is a tax-effective way of building for your retirement. You can arrange for your employer to take part of your wage out before tax and direct it into your superannuation fund instead (where it is taxed at only 15%).
TIP: Start out small, try sacrificing $50 or $100 per pay to see the impact it has on your pay. Over time build up your contribution.
2. Get control of your cash flow
a. The foundation to building wealth always starts with having good control over your cash flow. Use the start of the financial year as a “line in the sand” to start your budget and understand how much you’re spending.
TIP: There are a wide range of budgeting and cash flow management apps available for your Smart Phone and PC. Using these can help ease the pain of setting up and managing your budget.
3. Start a savings plan
a. Do you get tired of looking back and wondering why you never seem to get ahead? Try setting up a regular savings plan. Ask your employer to take part of your pay and direct it into a separate bank account to your everyday expenses account. Over time this money can build and you can use it for future goals.
TIP: If you are expecting a tax refund use this as your initial deposit. Invest it appropriately and watch it build over time!
4. Get control of your debt
a. If you feel like your debt is going nowhere try some basic debt reduction strategies like consolidating your credit cards or start a chunking strategy on your home loan.
5. Protect yourself from the unexpected
a. Did you know your greatest asset you will ever have is your ability to earn an income?
Make sure you are protected by reviewing your personal insurances. Things like life insurance and income protection will ensure you are your family are protected if something unexpected happens.
TIP: Make sure you check with your superannuation fund for what they offer you as they may provide insurances as well!
Also look at your health insurance. Depending on your level of income the government may charge you additional taxes (via the Medicare Surcharge) if you don’t hold private health insurance. The start of the financial year is a great time to look at taking out a policy or even reviewing your existing policy.
At Blueprint Wealth we offer financial advice that is right for you, no matter what stage of life you are at. Contact us to set up a plan that is right for you.
Casey Shaw, Authorised Representative of Blueprint Planning Pty Ltd (ABN 78 097 264 554), trading as Blueprint Wealth; Authorised Representative and Credit Representative of AMP Financial Planning Pty Ltd, Australian Financial Services Licensee and Australian Credit Licensee.
This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.
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