A simple financial health check is the first step to a successful year money-wise
Financial planning is the essential foundation for achieving and maintaining a secure financial position which best relates to your needs and objectives. A financial planner is able to analyse your financial goals and objectives and advise the course of action required to achieve your goals, in the most effective manner. For those who can’t afford a financial advisor – or prefer to do this on their own – there are other tools which can assist people to organise their finances, including the Federal Government’s MoneySmart website. This offers a great resource with a vast amount of information which is easily accessible, interactive and demonstrated in lay terms – essentially it is simple, educational and effective.
Investing offers another way to think about how to make money. People mostly make money from working and drawing wages or salary, but the theory of investing means putting your money to work for you. The earlier you start, the longer you have to smooth out market volatility, create long-term growth and benefit from the power of compound returns.
The Association of Superannuation Funds of Australia (ASFA) says that the average Australian couple will need an income of $58,326 per annum to live a comfortable life in retirement. For many people additional contributions to super may be required as your employer's 9.25 per cent contribution may not be sufficient to provide this amount. Super contributions can be divided into two types:
- concessional (before tax) and
- non concessional (after-tax)
Each type of contribution to superannuation is subject to different contribution caps and tax treatments. Some examples of concessional contributions include salary sacrifice and employer sponsored contributions, whilst examples of non-concessional contributions are personal after tax contributions, co-contributions and spouse contributions.
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