9 steps to get your finances in order this new financial year
It’s a new financial year which means it’s the perfect time to review your finances, make a few changes and get set up for your future. By getting your finances sorted now you can minimise the tax you pay, increase your net worth and reduce your stress about money.
1. Sort out your super
Have you checked for lost super? It is as easy as logging into your MyGov account and with a few clicks, you can see if you have any lost superannuation and consolidate it instantly. By having your superannuation all in one account you pay less fees and your investment can grow faster. While you’re checking for lost super, also have a look at these 5 strategies to save tax with super and these 4 tips to easily boost your super. The sooner you make changes, the larger the effect it will have on your tax and superannuation balance next financial year.
2. Look for lost money
Did you know Australia has around $1.1 billion in lost shares, bank accounts and life insurance? You can check here to see if any of this unclaimed money is yours. If you do find money and claim it, decide what you’ll do with it before it hits your account so it doesn’t get wasted. Will you pay off debt, put it in your offset account or add it to your superannuation? Having a purpose for your money is an easy way to make the most of it.
3. Know your deductions
Charity donations, work clothing, equipment and superannuation contributions are a few of the numerous things many Australians can claim on tax. Find out now everything you can claim based on your job and start keeping records to ensure you get more back at tax time. Check out our free ebook to help you get started.
4. Streamline your banking and budget
Set aside time now to streamline and review your finances. Check your budget, implement small changes to save more, get your banking sorted and know where your money is going. You can streamline it all easily within a week. By making the time to do this you can reduce your bank fees, pay less interest on your mortgage, make sure you’re on track with your financial goals and know that your budget is realistic. The sooner you get your finances sorted, the easier life is.
5. Set a goal
Having a clear financial goal gives you a reason to have your finances sorted, stick to a budget and make smart choices. Buying your first home, planning your retirement, going on a holiday or buying a new car are some common financial goals for Australians. Being clear on your financial goals puts you in control of your money.
6 Make changes
Taking your own lunch to work and eating less take-out might seem insignificant but these small changes can add up. We shared 10 small changes that bring big rewards in 2018 here. Pick one or two to start with, then add more. Soon, you’ll be saving more money and it won’t feel like you’re depriving yourself of anything either.
7. Plan how you will use your tax return
If you’re getting a tax return, decide before it is in your account what you will do with it. Many Australians blow their tax returns because they don’t have a specific plan for it and instead spend it on shiny new things such as TV’s, clothes and a bunch of takeaway food. Instead, look at the most effective ways to use a windfall such as investing or paying off debt. How can this money go further to improve your finances and life?
8. Review your expenses
We mentioned streamlining your banking and budget, but also take the time to review all your bills properly. Compare everything you pay for such as insurance, electricity, gas, phone and internet to make sure you are getting the best deal for you in each one. The cost of these services can vary significantly, even as much as thousands of dollars a year. Write a list of all your expenses and compare them online to look for the best deal on each one then switch if needed.
9. Check your net worth
Your net worth is the value of your assets minus your liabilities. Write down the value of all your assets such as your house, shares, superannuation, investments etc. Separately list your liabilities such as mortgages, personal loans, credit card debt and any other debt. Subtract the liabilities from your assets and that amount is your net worth. By knowing your net worth you can check it regularly to see if it’s increasing and if the changes you’re making are getting your closer to your financial goals. Check it every few months or at least each tax season to keep you on track.
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A few quick actions may help put some extra cash back in your pocket. Check out our 10 tax tips to take advantage of before the tax year ends on 30 June.Read more