Whilst we acknowledge the prospect of a new financial year does not set corks popping like January 1st, don’t let that stop you making some resolutions for the new financial year.
Here are DPM’s tips for a successful and prosperous new financial year.
Resolution 1: Get your super sorted
From 1 July 2017 the superannuation universe has undergone some significant changes.
New rules apply to contributions limits, pensions and transitioning to retirement.
Superannuation remains on of the best ways to build wealth and save for retirement tax-effectively and therefore upon receiving your 30 June Super Statement, you owe it to yourself to check the following:
- What is my super invested in, how has it performed and are the investments appropriate for me? Review your investment profile and underlying investments to ensure they are aligned to your circumstances and goals.
- Should I put more money into super? Super contributions can be made using pre and post tax dollars. The opportunities for you to consider this financial year may include:
– Salary sacrifice (for the employed)
– Personal contributions (for the self-employed)
– Government co-contributions
– Spouse contributions
- Do I have insurance through superannuation? Is my cover required and if so, is it sufficient to protect me and my family in the event of a claim.
- Multiple accounts? Consolidate your super to avoid paying multiple account fees.
Resolution 2: Be tax aware
No one likes paying taxes however the new financial year presents a perfect opportunity to make sure you are on track from a tax perspective. As a medical professional, we urge you to consider these simple questions:
- How am I earning my income? Do I need to change anything i.e. get an ABN, register for GST?
- Am I employing people? Have I setup Super Stream correctly? Am I required to register for PAYG withholding?
- How am I paying tax and do I need to budget for a change in tax instalment amounts?
- Am I maximising salary packaging (bearing in mind the caps apply per employer per FBT year)?
- How am I tracking my tax information so that tax time is as easy as possible in 12 months? Should I start using software for my business or work deductions?
Resolution 3: Review your dreams
Generally speaking, we believe that people who have a clear idea of what is important to them are happier in life than those who do not. Now is the perfect time to take check of your current financial circumstances and review your goals and values to ensure your financial plan supports these.
Never considered your future self? Understanding your goals and values can be trickier than it seems. As a starting point, spend a few moments to consider your perfect world from a lifestyle, professional and family perspective. Then map out when you would like to achieve these objectives and why they are important to you. The final deliberation relates to the numbers – are your goals achievable, are you on track to achieve them and what variables can you change to improve your position?
Resolution 4: Develop better money habits
The new financial year is a great time to get serious about managing your money. Consider how much it costs you to live (reviewing 6 months of bank and credit card statements might be the best place to start) and whether you can avoid costly habits that can drain your finances.
Establish a budget, automate bills and credit card payments and syphon part of your income into a separate account and/or investment on a regular basis. Disciplined cashflow and debt management is the foundation of so many successful financial plans.
Resolution 5: Seek advice
Learn about how to best manage and protect your finances. The team at DPM can ask the right questions to get a holistic view of your finances, help you with all the tips above – as well as offering you tailored advice to help you set your financial goals and develop strategies to help you reach them.
Things you should know:
The information has been prepared without taking into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. The financial position described is a general statement and is for guidance only. It does not constitute advice. Your individual situation may differ and you should seek independent professional advice.
Superannuation is a long-term investment. The government has placed restrictions on when you can access your preserved benefits. The Government has set caps on the amount of money you can add to superannuation each year on a concessionally taxed basis. In addition, the government has set a non-concessional contributions cap. For more detail, speak with a financial adviser or visit the ATO website.