Jun 25, 2022
New Year’s Resolutions are as old as man’s bold yet sometimes futile bid for self-improvement.
Designed to change the error of our ways, the ancient Babylonians introduced the concept around 4000 years ago.
Many resolutions fail because we don’t really want the outcome we resolve to achieve.
But what is more desirable than financial freedom and independence? It could be yours with a resolution of a different kind, one that celebrates the new financial year.
With the new financial year now at our doorstep, now is the time to get into some better habits, make some commitments we can and want to keep, and put ourselves on a path to a more successful and brighter financial future.
Here are some ideas to help you flick some of your fiscal failures and begin the new financial year with fresh purpose.
Create a budget and stick to it
Everyone from the Federal Government to the corner chicken shop prepares a budget.
So why shouldn’t you?
It takes some time, thought, discipline and commitment but the rewards are high, especially if you constantly find yourself overspending.
If 12 months looks like a distant gaze into the future, break it down into quarters, set yourself targets and hold yourself to them.
Start small. Even a small amount each week is better than no amount every week.
You’ll soon find saving money and reaching goals becomes intoxicating.
Keep yourself honest
Creating a budget is great but sticking to it is another thing.
If you’re serious, you need to regularly assess your progress to ensure you remain on track.
Every month is a good idea.
If you’ve overspent somewhere, you need to know why and on what.
It’s all about cultivating great habits that will stay with you for the rest of your life.
If you don’t maintain your habit, one bad month or big bill might see you decide to throw in the towel and you’ll be right back to square one.
Invest some of your tax refund
Everyone loves a refund.
But instead of splashing it all on new toys and fancy restaurants, think about investing at least half of it wisely.
That could include paying off some of your mortgage or other debt, maybe buying some shares or topping up your super fund.
Sure, go out and enjoy a chunk of it but be prudent with the other half and set up your new financial year by getting into some great habits and thinking about the bigger picture.
Don’t make tax time so taxing
While we’re talking tax time and great habits, try making life easier for yourself by keeping better records throughout the year.
You’ll be surprised how painless collating your tax records is when they are all in one place.
Keep a file for paper records and receipts and file them away in a safe place.
And set up a folder in your email or on the desktop of your PC where you can keep all the relevant messages together.
You might also find the ATO My Deductions app a useful tool, especially for taking photos of receipts and keeping track of deductions in real time.
It really will make the end of the next financial year seem like a breeze.
A super idea
It’s easy to forget about your super. But it’s one of the biggest investments you own.
It’s a good idea to keep tabs on it and make sure all of your workplace contributions are going in.
Consider making a voluntary contribution, which may ease your tax burden. We can talk to you about that, in collaboration with your accountant.
Also, the ASIC MoneySmart Super Contributions Optimiser can help you calculate how different contributions will impact your balance going forward.
With markets so volatile, you might also want to consider whether your investment strategy is still appropriate for your long term goals. We can help with that too.
Set a target
Whether you are saving for a deposit on a house, a fancy car or the holiday of a lifetime, it’s a great idea to set a target and keep it somewhere prominent.
Nothing burns in your brain more than a constant reminder of what your goal is so post it on the fridge door or write it down on your bedside table.
Here are some more good habits to get into:
Pay your savings first – Set up a separate bank account and an automatic transfer each pay to go into it. This will take out the decision making process and you will automatically see your savings grow without having to think about how much you want to save that pay cycle.
Stop using credit - Going out for a big night? Leave the credit card at home and take cash. It will help you stick to a budget. When there’s only enough money left to catch a cab home, it’s time to go.
Use auto payments - Don’t waste money getting stung with late fees for bill payments. Take advantage of online auto-payments and set up direct debits for regular billers.
Get advice today
Getting into good financial practices can be not only rewarding but incredibly beneficial. Creating a budget to stay ahead of the financial curve is absolutely imperative.
Calder Wealth Management are financial experts who can help you make the best financial decisions for your long term interests.
We pride ourselves on leading our clients into the future with structure, financial stability and confidence.
Contact us today to discuss all of your financial needs and concerns.
Written by Stefan Miraglia.
The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Calder Wealth Management’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Calder specialises in wealth management with a focus on advice, investment, sustainability, insurance and finance.
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