Michelle Bromley CFP®, Director – Strategy & Advice‍

On these Melbourne winter mornings, I need some inspiration to brave the cold for my morning walk! With my favourite tunes playing and a coffee in hand, I get in my 5000 steps and some ‘me time’ before the sun comes up. Lately, Roxette’s 80’s hit "Dressed for Success" has been my morning walk earworm, and it got me thinking — July is the perfect time to get “prepped for success” with your finances. With the new financial year kicking off take the time to rethink, reorganise, and realign your money goals. Here are some simple tax and financial planning tips to help you sing in tune all year long.

1. Review and Adjust Your Budget

Having a budget gives you a clear picture of where your money is going, helping you manage bills and the rising cost of living, identify unnecessary expenditures, and find opportunities to save.

The MoneySmart budget planner is available online or as a downloadable Excel spreadsheet. MoneySmart is a great resource for understanding the budgeting process.

For a simple approach, start by reviewing what you spent last year and break that down into main categories like bills (utilities, insurance, registration, council rates), liabilities (mortgage, personal loans), and living costs (groceries, health, personal care).

Add a 4% buffer for inflation, then divide each category by the number of paydays you have per year. Transfer those amounts into separate bank accounts set up for each category – this is the ‘bucket’ approach to budgeting.

Once you’ve built up a buffer, you can start paying your bills monthly. You don’t even need to set up a monthly payment plan with your electricity or gas provider - I send monthly payments to utility companies using the BPAY reference on the quarterly bill and have direct debits set up to meet any outstanding balance when the bills arrive.

I’ve been doing it this way since the 90’s and I’ve never had to worry about unpaid bills – it really reduces the mental load.

2. Make your Tax Return less Taxing

Let’s face it, doing your tax return is about as pleasant as visiting the dentist to have a sore tooth pulled – you dread it but know you’ve got to get it done.

Believe it or not, though, my tax return generally takes me no longer than an hour.

Here’s my secret: I’ve downloaded the ATO app to my mobile phone and use their ‘My Deductions’ tool in real-time throughout the year, logging claimable expenses and snapping photos of receipts as I go. Then, last Sunday morning - coffee and Vegemite toast in hand - I uploaded my deductions from the app to the ATO, logged into my.gov.au and accessed the Income Tax tab of my ATO record.

I had to enter some bank interest that the ATO hadn’t caught up on yet and check through the entries in each section to make sure it was all there, but an hour later as the family were rising from their slumber, I hit the lodgement button.

MUCH less painful than pulling teeth trying to find those crumpled receipts in that overstuffed drawer!

3. Supersize your Super

On 1 July a few key superannuation contribution rates and thresholds increased, providing the opportunity to really maximise your superannuation wealth ahead of retirement.

• Superannuation Guarantee increased to 11.5%pa
• Concessional Contribution Cap is now $30,000pa
• Non-Concessional Contribution Cap is now $120,000pa or up to $360,000 over a prospective 3-year period.

If you’re interested in adding to your super and you are eligible to make concessional contributions, have a go with the MoneySmart Super Contributions Optimiser for a side-by-side comparison of receiving the standard 11.5% employer Superannuation Guarantee contributions and making additional pre-tax contributions via salary sacrifice (or contributing after-tax and then claiming a tax deduction).

For a person earning the average salary of $98,000pa who has $500 per month after-tax surplus cashflow, they could salary sacrifice a pre-tax equivalent of around $8,800 pa ($733.33 pm) towards additional concessional contributions, to increase their net super by $7,480 (part of which is clawing back a net tax benefit of $1,496 from the ATO’s grasp!).

Just remember you probably can’t get access to those funds until you’re 60, so younger folk may be better to invest outside super first.

4. Review Insurance Policies

Life insurance is there to support your family's standard of living if you suffer an accident, serious illness, or death. Yet, under-insurance is a significant issue in Australia, with the average Australian only having enough cover to meet about half of their family’s basic living needs. Facing an insurable event without adequate cover can be financially devastating.

One major factor in under-insurance is the cost of premiums which have risen significantly in recent years; however, a wise man once said, “If you knew you were going to claim on your insurance you would view it as an investment in your future, not begrudge it as an expense.”

Consulting a financial adviser can help you determine the appropriate types and amounts of coverage you need. They can also compare different insurance providers to secure better rates or improved coverage, giving you peace of mind that your family will be cared for during the most stressful times.

5. Update Estate Planning

Keeping your estate planning up to date is crucial. This includes your Will, Financial and Medical Enduring Power of Attorney, and Advanced Health Directive, especially if you have a serious chronic health condition.

When reviewing your Will and overall estate plan with your solicitor, think about any changes in your family situation or financial circumstances. It might be time to draft a new Will to replace the old one, allowing you to leave assets to your beneficiaries in a way that maximises tax efficiency and asset protection.

Choosing the right Executor and Power of Attorney is vital. Make sure you've appointed someone you trust to make financial and medical decisions on your behalf if you become unable to do so.

Don't leave these decisions to chance—updating your estate plan is like leaving a well-marked treasure map for your loved ones, ensuring they get exactly what you intended.

Conclusion

So, as you stride into Financial Year 2025 with your favourite tunes in your ears and a coffee in hand, remember that a little planning can go a long way. By tackling these financial tasks now, you’re setting yourself up for a year of success. Think of it as giving your finances a tune-up—keeping everything running smoothly and efficiently. Here's to a prosperous new financial year, where your money goals are as well-organised as your morning playlist!

Contact one of our Wealth Advisers at clientservices@primefinancial.com.au for tailored financial solutions, utilising our strategic knowledge and investment acumen to help you and your family with long-term financial aspirations.

_{The information in this article contains general advice and is provided by Primestock Securities Ltd AFSL 239180. That advice has been prepared without taking your personal objectives, financial situation or needs into account. Before acting on this general advice, you should consider the appropriateness of it having regard to your personal objectives, financial situation and needs. You should obtain and read the Product Disclosure Statement (PDS) before making any decision to acquire any financial product referred to in this article. Please refer to the FSG (www.primefinancial.com.au/fsg) for contact information and information about remuneration and associations with product issuers. This information should not be relied upon as a substitute for professional advice, and we encourage you to seek specific advice from your professional adviser before making a decision on the matters discussed in this article. Information in this article is current at the date of this article, and we have no obligation to update or revise it as a result of any change in events, circumstances or conditions upon which it is based.}