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Ready, set…1 July is near

Ready…set… Are you good to go for the new financial year?

The end of the financial year is the cue for most of us to look at our financial position heading into tax time. Hopefully you’ve made progress towards your goals. But if you find that your expenses are trending higher than you’d like or—shock, horror!—higher than your income, this could be the perfect time for a financial makeover.

As you look back on what you have (or have not) achieved, this may be a good time to look ahead to where you want to be and how you plan to get there. The starting point is gathering up as much information as possible, beginning with the household budget.

Take a budget snapshot

You can’t set realistic financial goals and savings targets without knowing how much money you have at your disposal. If you don’t already track your income and spending, then take an annual snapshot as you go through your records to prepare your financial statements or tax return.

You don’t have to be a financial whiz to draw up a household budget these days. There are plenty of online budget tools and apps, many of them free like ASIC’s MoneySmart budget calculator. Or you could use old school pen and paper. Either way, the process is the same.

Deduct your total spending from total income and what’s left is what you have to work with. Any surplus could be used to kick start a regular savings plan. If you discover a budget black-hole, use the information you’ve gathered to identify areas where you may be overspending and could cut back.

Pay yourself first

Did you manage to save anything this year or are you are constantly counting on this month’s income to pay last month’s bills? Do you spend first and hope to save what’s left?

Instead of making saving an afterthought, you could choose to pay yourself first and allocate a percentage of your income to a regular savings plan. Setting up a weekly or monthly direct debit will remove temptation and encourage you to live within your means.

Review your mortgage

If you have a mortgage this is likely to be your biggest monthly expense so it’s a good idea to check your progress at least once a year. Why not use some of the savings you’ve identified and increase your repayments to save interest? If your mortgage has a redraw facility you could use this to create a cash buffer for emergencies.

While you’re at it, go to an online financial comparison site such as Canstar or RateCity and compare interest rates. If your rate is no longer competitive it could be a great time to ask BMO Lending Services to review your loan and help you negotiate a better deal. There are sometimes considerations and exit fees so it’s a good idea to get advice.

Check your super

Do you know how much you have in super and how it’s invested? When you retire superannuation is likely to be your biggest asset outside the family home, yet almost one in four Australians don’t know which risk profile their super is invested in.i Not only can this cost you thousands of dollars in retirement savings, its easy to alter.

Go to your fund’s website to review your latest super report or call the helpline to ask for your current balance and which risk profile your money is invested in. Then make time to chat to BMO Financial Solutions about your super.

As an example, a 25-year-old woman on $80,000 in a conservative option until she’s 70 could improve her retirement balance by $294,000 if she switched to a risk profile more in keeping with her age and circumstances.i However risk profiles are very individual so its really important to get professional advice from a qualified Financial Planner.

Protect your wealth

Reaching your life and financial goals is not just about growing your wealth but protecting it against loss.

It’s important to review your insurance policies annually—or as your circumstances change—to make sure you and your family have adequate cover. Insurance can be a significant cost for families, but the income it provides when accidents or illness strike can be worth every cent. Again, BMO Financial Solutions can help review your insurances.

They say knowledge is power and this is certainly true where your personal finances are involved. So why not go beyond the usual search for last-minute tax deductions this June to do a thorough review of your current position. If you would like us to help you make the most of the year ahead, give us a call.

(i) MLC Wealth Sentiment Survey, 5 April 2018,


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David Briese

About the author

With over 35 years accounting experience, David is a highly respected member of the BMO team and was appointed Associate Partner in July 2009, going on to become Partner in July 2013. David started out with BMO in 1988 working his way to a senior accounting role and heading up the (former) Chinchilla office of BMO. In 1995, David went to work with a reputable accounting firm in Mackay. Almost READ MORE

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