You may think you’re financially savvy but, as NICRI’s Craig Hall explains, even the simplest money mistakes can cost you dearly.
With the New Year upon us, it’s a good time to look at some of the many financial pitfalls that can affect our financial wellbeing. While these are numerous, here are five to consider.
Avoid investing for the wrong reasons
Choose investments that best suit all of your needs and objectives. For example, it may sound attractive to place funds in an investment to minimise tax or potentially earn higher returns; however, the investment may not suit objectives you consider important, such as investment security and immediate (at-call) access.
Don’t forget to update your details with DHS for GIS
If you receive Government Income Support (GIS), you have an obligation to advise the Department of Human Services (DHS), or any other relevant department, of any changes to the circumstances of you or your partner, where applicable, within 14 days of the change. This is to ensure you receive the correct amount.
Failing to report changes could mean that you either miss out on benefits or, conversely, you could be overpaid. The department recovers amounts owed as a result of overpayment.
Don’t deprive yourself of assets simply to increase GIS
Sometimes it is necessary to help family or friends financially; however, some GIS recipients believe that reducing assets this way will increase their GIS entitlement. Deprivation rules mean that if your annual ‘gifted’ amounts exceed a certain threshold, the excess will still be assessed for five years. On top of this, you don’t receive the earnings which those funds could generate.
Not taking advantage of available opportunities and concessions
Don’t assume you are getting everything to which you are entitled. Ensure you research any concessions available, particularly in relation to discounts on rates, public transport and medical services. Many organisations as well as local, state/ territory and federal governments provide a wide range of concessions on goods and services to those eligible.
If you fail to plan, then you plan to fail
Conduct a detailed budget and put measures in place to avoid your expenditure exceeding income. Plan to repay debt, particularly high interest debt such as credit card balances.
Ensure you plan for the future. Setting goals and putting strategies in place is critical to safeguard and enhance your financial wellbeing over the long term. Research investments available and speak with a licenced financial planner, as you may not be aware of the latest products or effective strategies that can help you realise your goals.
If you require further information on these issues or investing in retirement, please contact NICRI. Ph 1800 020110 (toll free) or email nicri@nicri.org.au. Information leaflets are also available on its website.
