The new year is a great time for making lifestyle changes
However, for goals and changes affecting your financial health, there’s often no better time than when starting a new job.
Well 2022, it has to be better than the last two years, right? With everything that has been going on the last two years, you may have not had the time or motivation to get your financial affairs in order because life has been all about survival every day. With a fresh new year comes a new opportunity to get your finances in order and feel comfortable with the knowledge that you are getting professional help to make the most of your hard-earned dollars.
Plan around your pay cycle
If your job pays fortnightly, there is a great opportunity to modify your mortgage repayments. Paying half your monthly mortgage as a fortnightly repayment lets you squeeze in one extra monthly repayment each year – potentially saving thousands in interest over the course of a loan.
Don’t waste a pay increase
If you received any sort of pay increase in 2021, or you are starting a new job in 2022 with a higher salary, there are opportunities to save more while maintaining the lifestyle you’ve become accustomed to. One of the most tax-effective investments is making additional concessional contributions into your super. Using your before-tax pay, it’s usually taxed at just 15 per cent instead of your marginal tax rate.
Individuals may contribute up to $25,000 during 2021/22 as concessional contributions to super.
Check your insurance
As you move through your career, priorities change and with a mortgage and children comes the need to protect your income. The new year is a good time to sit down and check your insurance – inside and outside of super – and make sure it matches your financial situation and your current lifestyle needs.
Check your budget
You may have been living on a more frugal budget the last two years if you have had a downturn in employment due to COVID, and your expenses may have decreased as we have not been able to travel, eat out, participate in sports and hobbies. Your income and expenses going forward are likely to change. A financial adviser can help you set a budget based on your 2022 salary and expected expenses. They can also discuss investment strategies to ensure any surplus finances gives you a boost today, and in the future.
Time to get your superannuation on track
With many people predicted to have more than 10 jobs in their lifetime, having a super fund that can move with you from job to job and into retirement has never been more important. After all, losing track of just one super fund can cost you thousands in retirement.
Not all super funds can do this though, and once you’ve done your homework to find the fund that best suits your investment profile and insurance needs with fees you are comfortable with – it’s often a good idea to stick with it. This gives you peace of mind throughout your working life that your retirement savings won’t get lost and you won’t be paying unnecessary tax and fees when the time finally comes to retire.
A Financial Adviser can talk you through some superannuation fund choices and how to go about consolidating your superannuation accounts to take advantage of the benefits of having one, rather than multiple accounts. They can also talk to you about the benefit of having multiple accounts – it doesn’t suit everyone, but there are a few that are better off with more than one super fund, under the right conditions.
For help with your 2022 financial plan including super, savings and more, contact your Carrick Aland Financial Adviser today on 1300 466 998.
Disclaimer: This has been prepared by the IOOF Research team for Millennium3 Financial Services Pty Ltd ABN 61 094 529 987, AFSL 244252. Millennium3 Financial Services Pty Ltd is a company within the IOOF group of companies consisting of IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. This report is current as at the date of issue but may be superseded by future publications. The information in the report may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of Millennium3 Financial Services Pty Ltd. This report may be used on the express condition that you have obtained a copy of the Millennium3 Financial Services Pty Ltd Financial Services Guide (FSG) from the website. Millennium3 Financial Services Pty Ltd and/or its associated entities, directors and/or its employees may have a material interest in, and may earn brokerage from, any securities or other financial products referred to in this report, or may provide services to the companies referred to in this report. This report is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of Millennium3 Financial Services Pty Ltd. Millennium3 Financial Services Pty Ltd and associated persons (including persons from whom information in this report is sourced) may do business or seek to do business with companies covered in its research reports. As a result, investors should be aware that the firms or other such persons may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as a single factor in making an investment decision. This report has been prepared in good faith and with reasonable care. Neither Millennium3 Financial Services Pty Ltd nor any other person makes any representation or warranty, express or implied, as to the accuracy, reliability, reasonableness or completeness of the contents of this document (including any projections, forecasts, estimates, prospects and returns and any omissions from this document). To the maximum extent permitted by law Millennium3 Financial Services Pty Ltd, its related bodies corporate and their respective officers, employees, representatives and associates disclaim and exclude all liability for any loss or damage (whether foreseeable or not foreseeable) suffered or incurred by any person acting on any information (including any projections, forecasts, estimates, prospects and returns) provided in, or omitted from this report. General Advice Disclaimer: The information in this report is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this report, you should assess your own circumstances or seek advice from a financial adviser. Where applicable, you should obtain and consider a copy of the Product Disclosure Statement, prospectus or other disclosure material relevant to the financial product before you acquire a financial product. It is important to note that investments may go up and down and past performance is not an indicator of future performance. For information regarding any potential conflicts of interest and analyst holdings; IOOF Research Team’s coverage criteria, methodology and spread of ratings; and summary information about the qualifications and experience of the IOOF Research Team visit https://www.ioof.com.au/adviser/investment_funds/ioof_advice_research_process.