This year has been a rollercoaster ride to say the least. It has changed the way we work, socialise and also has changed the way to think about our finances. For many people, this year has created more financial uncertainty than ever before. We have seen great government initiatives to help us get back on track but now it’s time for us to revisit our financial goals and reconsider our priorities with the changes that we have made over the year.
Some opportunities that came out of the budget and got me thinking focused on three key areas for clients:
- Individual tax savings
- Super Fund performance measures
- Government support
[for more detail on the budget changes, please visit Simone’s blog here].
What will you do with your tax savings?
This year has triggered a lot of individuals to think harder about their spending habits and personal budgets. For some, it was the initial financial shock that lockdown triggered, and the realisation that they didn’t have any reserves. While others found themselves with unexpected savings due to lockdown and travel restrictions.
However, with the recent tax cuts announced in the budget, this will effectively mean they have a pay rise coming their way, eventually. [this could be up to $5k extra per annum for a couple]
Have you thought about what this saving will mean for you?
- Does it mean you will hit a financial goal sooner?
- Are you going to take this opportunity to build up a reserve?
- Is time to start investing?
- Or are you planning to spend it as ScoMo wants you to?
Your Future, Your super
The budget proposes to introduce measures to help hold super funds accountable and to make it easier for Australians to compare the performance of their fund.
Super in general is one of the most forgotten investments within an individual’s portfolio. This is for a number of reasons:
- It can be complicated
- It feels like a “future you” problem
- People feel like the performance of their fund is out of their control
But none of the above is correct. Super funds these days are more flexible than most Australians realise and it is a good opportunity for you to take stock as to how your’s is performing and make changes either in the investment choices of your fund or switch funds to make your super work harder for you.
This year has seen many people consider their eligibility for government support for the first time. However, there are also many that have already checked their eligibility in the past that should now be taking this opportunity to revisit it.
The key reasons for this are:
- Their asset values may have been impacted more than they realise during this period
- The deeming rates for income tests have been lowered to more accurately reflect the current market returns.
For many people being eligible for even a part pension, or just a health care card, can make a big difference to their ongoing personal expenses. So, it is worth taking the time to revisit where you stand with the recent changes.
Asking for help
Revisiting your personal financial situation and goals after a year like this is just as important as revisiting and resetting your business goals. Life has changed, and your goals may have changed too, so it makes sense that your financial situation and some of your future plans need to be tweaked.
Information provided in this blog and on this website is general in nature and does not constitute financial advice. Every effort has been made to ensure that the information is accurate, but information may become outdated as legislation and new government announcements are made. Individuals should not rely on this information to make a financial investment decision as it does not take into account their personal circumstance. Before making any decisions, we recommend you consult a licensed advisor to take into account your particular financial situations and needs.
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