By Murray Nicol

Most people have a New Year Resolution for the start of the calendar year on January 1st. This is often done at a time where you may have a large number of expenses (Christmas), be on holidays and maybe have overindulged. I’m all for having a personal life, social or health New Year Resolution however the start of the new Financial Year should be a time to make any Financial resolutions.

Complete a Budget

The first step for an effective savings plan is to make a budget. It can be completed simply on the back of a napkin or an extensive excel spreadsheet, just so long as it is accurate and captures all your income and expenditure.

If you have a Deficiency in your budget identify areas where you can increase your income or reduce your expenses.

If you have a Surplus, have a plan to allocate your savings as effectively as possible.

The Governments Moneysmart Website has a very easy to use Budget Planner (as well as lots of other useful money resources)

Managing your Budget

Completing your budget for the financial year is a great first step, but the most fantastic budgets are not effective unless you have a way of tracking and measuring your income and expenditure over the year to make sure you are on track. Using a Budgeting App is an easy and effective way of tracking your budget and making sure you are on track.

Your bank may have a good budget app which can connect to your bank accounts, alternatively there are apps available such as Frollo, MoneyBrilliant, WeMoney or PocketBook.

I personally use Pocketbook to track my Budget

Check your Superannuation Statement

Early into the new financial year, you should receive your annual superannuation statement. Instead of tossing the statement to the side, take a moment to read through it thoroughly. Check all your details are correct and your contributions matches to what you think you or your Employer should have made over the last Financial Year.

Important things to check for your Superannuation are;

  • Review where your money is invested – make sure it is appropriate for your risk tolerance and age
  • Level of Insurance – you should review this each year to ensure it is appropriate for you;
  • Beneficiary Nomination – make sure it is current and matches your Estate Planning Wishes.
  • Review your overall level of fees you pay for Administration and Investment choices to make sure it is competitive.
  • The Moneysmart website has good information on Choosing a Super Fund

Set up any Salary Sacrifice to Super Arrangements for the new Tax Year

Small, regular contributions to your Super via your pay, helps you build your savings over the course of the year rather than have to find a larger amount in June. Remember though there are limits to your Concessional Contributions to Superannuation – $27,500 per person for the 2023 financial year.

Check information here

Check as well though, your limit on how much you can contribute as a Concessional Contribution may be higher if you are eligible for Carry forward unused concessional contributions – Check on the ATO Website

You can check your Carry forward unused concessional contributions cap via the MyGov App if you have this connected to your ATO records.

Review your Salary Packaging Options

Many Employers offer Salary Packaging options that might be beneficial to save you tax over the course of this Financial Year. This is especially true for some not for profit organisations which have some specific exemptions and concessions

Information on this is available on the  ATO Website here

Complete your Financial Year 2022 Tax Return as soon as possible

If you are owed money form the tax office (ie. A Tax Refund) then it is in your best interests to have that money in your bank account or paying off your mortgage as soon as possible.

Conversely, if you think you owe the tax office additional Tax (ie. A Tax Payable), you can delay completing your tax return until later in the Financial Year.

This is worth discussing with one of our accountants at DFK Benjamin King Money.

If you cover the 6 suggestions above it will set you up for a good Financial Year and on your way to Financial Independence!

BKM Wealth will be happy to assist and or review any of your Financial Year Resolutions.

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