The single girl's guide to getting ahead financially
Yes of course, many single women are too busy thinking of the now and not about the future. Being single gives us that luxury – clothes, travel, long lunches etc.
It’s quite ok to have all of those things, we just need to maintain some balance. Here are a few tips to ensure you keep things under control for the future while you are having fun:
Pay off your debt
First step to building a successful savings account is to get out of debt. Pay as much as you can each month off the highest interest debt you have until they are all paid off.
Make smarter choices
All those coffees and take away lunches do add up. It seems like just $5 here and $10 there but it soon becomes hundreds. Maybe take your lunch to work every day except Fridays.
Ask for a better deal
Every year we spend thousands of dollars on insurance, phone and electricity. Every year it automatically increases as well. Invest a little time to ring around for a better deal when that yearly bill comes in. Companies will often offer discounts for long term customers. You won’t know unless you ask.
Get help paying your rent or mortgage
It’s not easy living alone and paying the bills most people share as a couple. Maybe you could have a friend, boarder or international student live with you to help pay the rent and split the utility costs.
Additionally, it is important to have an emergency fund in case you lose your job, so you can still meet your financial commitments.
We have said it before but just recently there was an article on the front page of the newspaper claiming there is $340 million in ‘forgotten’ Super accounts sitting waiting to be claimed in South East Queensland. The reason being that account holders don’t realise how easy it is to retrieve the funds.
When it comes to retirement every cent counts. Secondly, there is no other environment that provides the tax advantages that Super does. These sort of figures could make a 20 – 30% difference to someone’s Super balance if they consolidated. Superannuation accounts generally have insurance attached to them too. So you could potentially be doubling on the cost without it providing a benefit.
It is as simple as visiting the Australian Taxation Office website and use the lost Super tool link. As long as you have your name, date of birth and tax file number the ATO will determine whether you have a lost account. The link is www.ato.gov.au/calculators-and-tools/check-your-Super/
A financial planner can also help assist with this process.
How The Budget Will Affect Your Super
The Budget has been completed and the election is over. Time to review what the budget changes mean for you in regards to your Superannuation.
If your take-home pay is under $37,000, your Super fund will get a tax discount of up to $500, which will minimize or even cancel out your Super tax bill.
The Superannuation threshold has decreased from $300,000 to $250,000 from July 2017. It will affect the tax payable on Super contributions.
The government will also reduce the annual cap on concessional Super contributions. The new cap will be $25,000 a year for everyone.
The loss of Superannuation tax concessions will affect very high earners, but overall this measure aims to make superannuation fairer.
Retirees will have a bit more choice with what they do with their superannuation once they retire. The Government plans to remove tax on earnings for some products during the retirement phase. You will start to see new financial products like deferred super annuities – which manage retirement incomes for their members – and they'll be more attractive to buy. It will also lessen the burden on the age pension, since these products are designed to prevent you from outliving your savings.
This is a very brief summary of the changes. The Government has provided a lot of information on the entire budget. I have provided the link here. http://budget.gov.au/2016-17/content/glossies/tax_super/html/
As a financial planner I can provide you a more comprehensive overview of your particular circumstances.
Protect your family financially
It is something we would rather not think about and don’t want to spend too much of our living life worrying about. However, have you thought about what would happen to your family if you were to pass away. There is a lot to consider depending on your lifestyle, finances etc. Here are three simple things you can do immediately to start the process.
- PREPARE A WILL – This step is the easiest however often overlooked. Not having a Will can cause all sorts of unnecessary issues and delays. If you do not have a Will, your assets will be distributed based on the laws of the state you live in and could potentially go to family members you are estranged from. Once you do have a Will in place, it is a good idea to review it every one or two years to ensure it is still as you wish.
- CONSIDER LIFE INSURANCE - Life insurance is designed to help provide financial security for your family should something happen to you. Death insurance cover can be purchased through your superannuation. Your financial planner can advise you on the pros and cons of having insurance through your super fund or separately.
- CHECK YOUR SUPER DETAILS. Your Will does not decide who will receive your death benefit of your Super. Your Super fund will decide who receives it, unless you have let them know your preference by putting a binding nomination in place.
When you lose a family member things are stressful enough without having to deal with money issues. These three simple steps will help ensure your wishes are seen to. I can help ensure your estate planning is in place and appropriate for you.
A new financial year - A new financial plan
The new financial year has arrived and it is an ideal time to review your financial situation and tweak a few things for the new financial year.
ASIC recently revealed that only two in five Australians have a short-term financial plan in place, and only a quarter of those surveyed have a long-term financial plan.
Here are a few steps you can take yourself to start planning for the future:
Keep track of what you spend – ASIC’s MoneySmart website have a great app – TrackMySpend App which can be used to track what you spend. It is free to use and can help see the big picture of where you can maybe cut costs in your spending etc.
- Stick to a budget - Once you have established what you are spending and on what, it will be easier for you to set a budget and stick to it. This is the first step in being able to save money or put money away for the future. Another great app that can help with this is MoneySmart’s Budget Planner
- Get your debts under control - It is important to get your debts under control before you can think about investing or saving. A credit card debt of $2000 could take you over 12 years to pay off if you only pay the minimum monthly payment. Consider paying higher amounts to minimize or eliminate these types of debts.
- Make the most of your Super -There are a few simple steps you can take to make the most of your super. We spoke about these in my last blog.
- Review your insurances – This includes all insurances, home, car, life and income insurance. Shop around, just ensure you are comparing apples with apples – sometimes the cheapest isn’t always the best.