It’s Always A Good Time To Start Over!
Written by Amanda Cassar
It's always a great time for making lifestyle changes and reviewing where you're at, but for goals and changes affecting your financial health, there’s often no better time than when starting a new job. New beginnings, right? Time to plan for some silver linings!
Well, 2022 just has to be better than the last two years, right? With everything that has been going on, you’ve likely not had the time or headspace to get your financial affairs in order because life has been all about survival. With fresh eyes and outlooks, however, come new opportunities, and it’s always a good time to get your finances in order and feel comfortable with the knowledge that you are getting professional help to make the most of your hard-earned dollars. Call it 'getting your ducks in a row or finally filing the 'too hard basket.' That feeling of decluttering the head or getting around to those jobs you keep putting off can be so rewarding.
Okay... we may be on the brink of nuclear war and are finally wrapping up a pandemic, but hey... is there ever the perfect time to get cracking?
Plan Around Your Pay Cycle
If your job pays fortnightly or weekly, there is a great opportunity to modify your mortgage repayments. Paying half your monthly mortgage as a fortnightly repayment lets you squeeze in one extra monthly repayment each year – potentially saving thousands in interest over the course of a loan. Cool right? And you can always lower payments back to the minimum if there's a squeeze on the budget.
Don’t Waste A Pay Rise!
If you received any sort of pay increase in 2021, or you are starting a new job in 2022 with a higher salary, there are opportunities to save more while maintaining the lifestyle you’ve become accustomed to.
One of the most tax-effective investments is making additional concessional contributions into your super. Using your before-tax pay, it’s usually taxed at just 15 per cent instead of your marginal tax rate. That could save you a fortune in tax – and it’s better off funding your golden years!
Individuals can contribute up to $27,500 during the 2022-2023 financial year as concessional contributions to super and in turn, reduce taxable income.
As you move through your career, priorities change and with a mortgage and children comes the need to protect your income. The new year is a good time to sit down and check your insurance – both inside and outside of super – and make sure it matches your financial situation and your current lifestyle needs.
Check Your Budget
You may have been living on a more frugal budget the last two years if you have had a downturn in employment due to COVID; and your expenses may have decreased as we have not been able to travel, eat out, participate in sports and hobbies or even just head to the movies.
Your income and expenses going forward are also likely to change. A financial adviser, counsellor or money coach can help you set a budget based on your 2022 salary and expected expenses. They can also discuss investment strategies to ensure any surplus finances give you a boost today, and in the future and work out just what your priorities should be.
Reviewing what’s going out and coming in is essential. Who knew you’d ended up with two Netflix accounts?
Get Your Superannuation On Track
With many people predicted to have more than 10 jobs in their lifetime, having a super fund that can move with you from job to job and into retirement has never been more important. After all, losing track of just one super fund can cost you thousands of dollars in fees and lost opportunities by the time you hit retirement.
Not all super funds are easily portable and once you’ve done your homework to find the fund that best suits your investment profile and insurance needs with fees you are comfortable with – it’s often a good idea to stick with it… until you find something better of course.
This gives you peace of mind throughout your working life that your retirement savings won’t get lost and you won’t be paying unnecessary taxes and fees when the time finally comes to retire. And it can be just like a little lost puppy, always following you around.
A Financial Adviser can talk you through some superannuation fund choices and how to go about consolidating your superannuation accounts to take advantage of the benefits of having one, rather than multiple accounts. Comparing industry funds; retail opportunities, public offer funds and even Self Managed Superfunds, is a great exercise.
They can also talk to you about the benefit of having multiple accounts – it doesn’t suit everyone, but there are a few that are better off with more than one super fund, under the right conditions and depending on your own personal circumstances and health.
For help with your 2022 financial plan including super, savings and more, take some time out to work through the above options, or contact your Financial Adviser today.
It’s Always A Good Time To Start Over! It’s Always A Good Time To Start Over! It’s Always A Good Time To Start Over! It’s Always A Good Time To Start Over! It’s Always A Good Time To Start Over!