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Master your money

By Damian Gibson

Financial Adviser, Elevate Wealth Solutions

 

TAKE control and master your money this financial year.

Here we will discuss some key aspects of your finances that you should consider in the new financial year and beyond.

 

REVIEW YOUR SUPER

For most Aussies, superannuation is their second biggest investment after their home, so you need to make sure you pay it some attention.

Fees

Not all super funds are created equal and they vary in cost significantly.

Review the fees you pay inside super and ensure you are getting the best bang for buck.

Reducing your super fees is one of the easiest ways to boost your balance.

 

Investments

Ensuring your money is invested in line with your goals (e.g. what rate of return are you hoping to achieve, how comfortable are you with risk etc), is critical.

Make sure you understand how your money is invested and what it is invested in.

 

Number of funds

If you have more than one super account, you may benefit by consolidating them into one account.

Consolidating your super will help you save money by paying one set of fees and it will be easier for you to keep track of your balance.

Before consolidating there are several important factors to consider, so speak with a professional.

 

BOOST SUPER & REDUCE TAX

Contributing some of your pre-tax income into super, commonly known as salary sacrificing, can help you reduce your tax and invest more for retirement.

Depending on your circumstances, salary sacrificing could reduce the tax you pay on your income by up to 32 percent.

Build your wealth instead of giving it to the tax office.

 

CASHFLOW MANAGEMENT

If you are not overly disciplined when it comes to managing your cashflow, developing a budget is a holdfast way of keeping yourself accountable.

This can ensure you are able to take control of your long-term wealth accumulation goals by saving before you spend.

 

ESTATE PLANNING

Although preparing a Will is important, estate planning is about much more than that.

While a Will can help ensure your estate is distributed according to your wishes, it may not be effective in dealing with a significant portion of your wealth.

For example, the proceeds from superannuation funds and life insurance policies do not automatically form part of your estate, which means that addressing these investments in your Will may be ineffective unless you take some important additional steps.

A well-prepared and executed estate plan can ensure the right assets go to the right people at the right time, in an efficient and tax-effective manner.

 

PROTECT YOUR WEALTH AND FAMILY

How would you pay your mortgage and meet your other living expenses if your income ceased?

Think about the risks that you face in everyday life.

Some risks cannot be removed entirely.

However, for many risks that we cannot eliminate, we can mitigate their impact by taking out suitable personal insurances.

If you do not have adequate insurance, an unforeseen death or illness could have severe consequences for you or your family.

However, if you already have personal insurances in place, it is just as important to make sure you hold the correct types and levels of insurance.

 

BOOST YOUR AGE PENSION INCOME

If your super or other investments have dropped in value during the first half of 2020 due to market conditions arising from COVID-19, there is a chance your age pension will go up.

While the value of your assets are automatically reported to Centrelink throughout the year, it only happens a couple times a year.

Therefore, some of your assets may not have been reported since the markets have fallen.

Providing Centrelink with updated information now may result in your Age Pension increasing or enable someone who was previously ineligible to now apply for the age pension.

While we have only touched the surface, the above areas are a starting point towards mastering your money.

The world of personal finance can seem confusing and daunting.

Talk to a financial adviser in July and ask how we can help you.

Seeking professional advice today will put you in a better position tomorrow.

Act now and talk to us at Elevate Wealth.

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances.

Please seek personal advice prior to acting on this information.