Five Tips for a Successful New Financial Year

Happy New Financial Year!

July 1st doesn’t have as much cachet as January 1st – no-one gets drunk at the prospect of fronting their accountant (or maybe they do). But don’t let that stop you making some resolutions for the new financial year.

5. ‘I will set some yearly goals’

You’ll soon be getting your group certificate, and you may wonder ‘where did all that money go?’

The key to answering this question is to decide what your goals are before the money hits your hand. Take that figure from your group certificate and think about how you would have liked to have spent it: allocate chunks of money to your mortgage, food, bills, and most importantly your goals. Now do it!

4. ‘I will read my superannuation statement when it comes in the mail’

When you get your super statement – read it. Look for the following: Investment returns – suggests these should be around 13 per cent for people in a balanced fund (if not, call your fund and ask why).

Fees – Generally the lower the fees the better. Anything over about 1 per cent (if you’re not receiving advice as part of the package) and you may want to look at shifting to a low-cost fund. Why? Paying an extra 0.25 per cent over your working life can lower your end booty by $20,000.

3. ‘I will keep track of my deductions’

Trying to dodge the taxman is a national sport in Australia, but you can’t claim what you can’t prove – so keep good records. The best way to do this is by applying for a (low-rate, low-fee) credit card. Use it to pay for things that could be deductable and you’ll be better prepared this time next year.

2. ‘I will cut my credit card debt for good’

If you’re like most people you’ve probably got $4400 on your card – and if you’re like most people you’re probably not achieving your financial goals. Be smart with your credit card and pay your balance down to zero each month. I’ve never met one rich, happy, in-control person who has credit card debt. Not one.

1. ‘I will use my refund toward one of my goals’

It was your money in the first place. The Government just got to keep it for 12 months – interest free. If you’re fortunate enough to get a tax refund this  year, use it to kickstart one of your goals – and putting it all into a high-earning online savings account is a great place to start.

People tend to overestimate what they can achieve in a month, but massively underestimate what can be achieved in a year. Make this your year!