One of the most frequently asked questions is how do you save money? The first thing that needs to be considered is what exactly you are saving for: holidays, house, investment, retirement, a rainy day and the list goes on. There is no golden rule, however the top 10 tips for saving include:
1. Increase your mortgage payments. By increasing your mortgage payments by $20 per fortnight you can reduce your loan term by 7 months and save $8,328 over the term of the loan. By using some other simple strategies you can reduce your home loan by over 8 years and up to $117,067 in interest. Find out how
2. Start a regular investment plan. Even if your cash surplus for the month is relatively small by investing these funds you could still build up a significant portfolio in the long term, especially if it is invested in high growth funds. This strategy is demonstrated in our blog – Investing a little a lot
3. Leverage your regular investments. By using this strategy it is possible to increase your investment within approved managed funds or shares.
4. Consolidate your super. By consolidating your super accounts you save on paying multiple ongoing management fees, admin fees and member fees. This could save you hundreds of dollars. See our example for more information
5. Qualify for a co-contribution. For those earning less than $33,516 a year can get a $500 co-contribution from the Government by putting in $1000 of there own money into super. Check the money smart calculator to see if you are eligible
6. Salary sacrifice. You may benefit significantly from your employer contributing more than the required 9% of your salary directly into your super. =
7. Protect your family. By taking out personal insurance you can help protect your family from unbearable expenses if you are temporarily or permanently disabled or die prematurely. This cover may be able to be taken out through your super fund to help with the premium payments. Alternatively your Income Protection Insurance may be tax deductible if held outside super.
8. Take out private health insurance. If you fall into income category where you are required to pay the medicare levy surcharge, by taking out private health insurance you will avoid this. Also by purchasing private health insurance you can get the care you need in the hospital of your choice and avoid the public health system waiting lists.
9. Donate to charity. By donating some of your savings to charity you may qualify for a tax deduction, not to mention the fact that you are helping to support a worthy cause.
10. Finally and most importantly, seek advice. There are so many things that need to be considered that are specific to your personal situation, a financial adviser can help you make the right decisions and suggest personalised savings strategies.
By Income Solutions Financial Planners
Please note: The advice on this site is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information