There may not be any big parties for the financial new year’s eve, but it is still an important time of year. The end of financial year is the perfect time to look back on your finances and see how you can save more over the next 12 months.
But as you may know, goals and resolutions that are set on a whim don’t always have a high success rate. To have a better chance of long term success, forward thinking and proper planning is key.
Don’t waste your tax refund
What’s the first thing that comes to mind when you think about getting your tax return back? You may have been thinking about buying a new TV or sound system for months, but before you go and splash the cash, make sure you consider whether that money can be better spent on something else.
Say you received $2,000 for your tax refund and put it towards your $200,000 home loan with a 30 year term (5% interest rates). Not only will you save approximately $5,000 in interest, but you will also trim 6 months off your home loan term. Just imagine how much time and interest you could save on your home loan if you put your tax return towards your mortgage every year.
If you don’t have a home loan, but you are looking to purchase a property, then your tax refund can help boost your deposit amount in an instant.
Carefully read your superannuation statement
Your superannuation is essentially one of your largest assets and it is extremely important that you keep it a priority, no matter your age. With the cost of living increasing and the pension age expected to rise, having a solid amount of superannuation is vital to ensure a comfortable lifestyle during retirement.
Do you have multiple superannuation funds? There is currently $18.2 billion of lost superannuation, mostly due to people changing jobs, name or address. You could be missing out on a significant amount of money if you don’t keep track of your super.
When you receive your annual superannuation statement, firstly check you are being paid the right amount. Then, you can use this information to compare different funds to ensure you are getting the best deal.
Review and compare expenses
Ongoing commitments such as phone contracts, insurance and loans may not seem like large expenses separately, but combined together, they are not quite so little. If you have become complacent and let money go out of your account every month without really checking it, you could be spending more money than you need to.
There are a number of comparison websites where you compare prices for multiple companies in one place. Some examples include mozo.com.au and finder.com.au.
Update your budget
If you already have a household budget in place, now is a good time to review whether it is working for you or changes need to be made. If you have kept the same budget for a while, there is a good chance that your income and expenses are different and there is potential for you to save more money just by making a few small changes. Reviewing your budget is a definite must if you have changed jobs, moved address or your family situation has changed.
Work towards something
Having either long term or short term goals can help keep you motivated. Maybe you want to buy a new car, a house or go on a holiday. Your goals don’t even have to be big. Why not create a system whereby if you meet your savings goal for the month, you can treat yourself to a dinner out or something similar.