Five tips for a new financial year
WHILE people don't tend to go out and celebrate quite as wildly on June 30 as they may on December 31, the new financial year is a good time to stop and assess your financial position - and perhaps even think about how you can improve that position in the next 365 days.
In the spirit of new beginnings, I will offer my top 5 tips for a successful year (finance-wise). What you do with them is entirely up to you!
1. Find out where all your money went - and budget for the year ahead.
I've sat across the table from many clients over the years, and I often witness them looking at their PAYG Summary (or group certificate) and lamenting where all their hard-earned dollars ended up. This doesn't have to be you! Use whatever budgeting tool works for you (be it spreadsheets, pen and paper, or Internet calculators) and make a plan for your money this financial year. You may find it goes a whole lot further!
2. Read your super statement and review your investments.
Many people receive their yearly superannuation statement and promptly file it away, never to be seen again. Whether you make extra super contributions or not (and that's a whole other story), you deserve to know how your super is performing. If it's not doing too well - compared to other funds, to be fair - consider changing funds or switching investment strategies. As always, do your research to determine what product is right for you.
3. Cut down on your credit card debt.
Australia's credit card debt is currently sitting at over $37 billion and climbing UPDATE, with interest accruing at $6.4 billion per year. Now while your credit card bills might not look so horrendous, do you really want to contribute to that number? Paying just $100 more than just the minimum repayments is a great start if you want to knock your credit cards on the head.
4. Keep track of tax deductions.
While it may be too late for this year's tax return, make it your personal goal to keep track of every tax-deductible purchase throughout next year. There are some fantastic tools out there to help you record your purchases - an app like Shoeboxed (shoeboxed.com.au) works wonders for the smartphone-savvy. If your phone isn't that advanced, you could also try using a specific debit card for all possible tax-deductible purchases - then you have all those recorded on statements, much easier to track!
5. Do something productive with your tax refund!
Tax refunds are a method of enforced saving - it's your money, the ATO has just borrowed it for 12 months. Try and resist the temptation to go out and blow all that money on things that don't last (like clothes, food, movies or even cars). If you don't have any purpose in mind for your refund, then lock it away in a high-interest online savings account for a day when you really will need it.
So there you have it - five tips for financial success in the new financial year. See how many of them you can manage to follow, and I can almost guarantee you'll be in a better financial position come June 30 next year. Let me know how you go!