Your Guide for a Smarter Start to the Financial Year

If, like most people, you are already in need of a fresh start and haven’t quite reached some of the goals you set out to achieve when the clock struck 12 on New Year’s, then you’re in luck, because you’ve got a chance for a redo – the new financial year is upon us, and it’s a great opportunity to reset! Whether it’s goals that’ve slipped by the wayside or fresh thinking, take this time to reevaluate the all-important balance of how your financial goals fit in with your life goals. Here are 11 tips to help you start strong this financial year.

1. Review your current financial situation

You’ve just wrapped up the last financial year, making it the perfect time to take stock of where you currently stand. This is a particularly critical step if you’re looking at diving into new opportunities. Conduct a thorough financial health check-up, and carefully assess your income, expenses, debt levels, and savings. This can help you identify opportunities to save, reduce debt, and make more informed investment decisions.

Key actions:

• Evaluate your credit score and make any necessary improvements.
• Set up or update your budget and include savings goals, retirement savings, and set up an emergency fund.
• Revisit your insurance policies and ensure you’re still adequately covered.

2. Refinance or shop around for better loan rates

If you’ve got a home loan, keep a sharp eye on your term. As interest rates fluctuate throughout the year, refinancing can result in significant savings over time. Don’t rule out switching lenders, too – while it can be a bit of a process, often you’ll be rewarded with incentives or more favourable terms.

Key actions:

• Contact your lender or a mortgage broker to discuss refinancing options.
• Compare loan rates from different financial institutions to find a better deal.
• Check whether your loan term still aligns with your long-term financial goals.

3. Set realistic investment or savings goals

Whether you’re looking to buy your first home, upgrade, invest in property, or save for a new car, new furniture, or to start a business, concise, realistic goals will keep you on track. For property or business investment, consider these key steps:

Key actions for property investment:

• If you’re a first-time investor, arm yourself with the right knowledge.
• Get precise on your property investment goals – are you looking for short-term rental income or long-term capital growth?
• Location is critical, so dedicate time to researching up-and-coming or growth suburbs.
• Formulate a detailed budget, and make sure it aligns with your overall financial goals.

Key actions for business investment:

• Start with a clear vision and mission, ensuring they align with your personal goals.
• Allocate funds towards key areas like marketing, inventory, and technology.
• If you’re in sales or real estate, you might even consider joining First National Real Estate as a member and becoming your own boss! You’ll enjoy the freedom of owning your own business while benefiting from the backing of an established brand, supportive team, as well as proven systems and technology.

4. Re-evaluate your super

While often subject to the set-and-forget treatment, your super can be a valuable tool in your property journey. The First Home Super Saver Scheme allows first home buyers to make voluntary super contributions, which can then be withdrawn to finance a first home, and a Self-Managed Super Fund can offer a pathway (albeit a strict one) for property investors. Keep abreast of Government policy changes, too, as these can significantly impact the value of your super.

Key actions:

• Check if the First Home Super Saver Scheme is an option for you.
• If you don’t have a nominated super account and want to buy an investment property, assess whether a Self-Managed Super Fund could be useful.

5. Leverage negative gearing for future growth

Negative gearing continues to be a powerful strategy used by clued-up property investors, and for good reason. In a nutshell, negative gearing means the costs associated with your investment property exceed the income you receive from it. This loss can then be deducted from other sources of taxable income, such as your salary or wages, while you prioritise long-term capital gains.

Key actions:

• Learn more about negative gearing and understand if it could work for you.
• Understand what property expenses you can claim as tax deductions.

6. Review if RentVesting is for you

If you can’t afford to buy in your dream location just yet, but are keen to get on the property ladder, RentVesting is a great option. RentVesting means you rent where you want to live, but invest in property elsewhere. This allows you to access the wealth-building benefits of entering the property market without compromising the lifestyle you love.

Key actions:

• Assess your current rental situation and consider whether RentVesting is a viable option for you.
• Research areas with strong investment potential that may not currently suit your lifestyle.
• Consider how RentVesting fits into your broader property and financial goals over the short or long term.

7. Stay agile and adaptable

The financial landscape, including property and business markets, is always on the move, so staying flexible is a must. Whether it’s adjusting your investment portfolio or reallocating funds in your business, change is a constant that you’ll need to accept.

Key actions:

• Monitor market trends, government policies, and economic shifts to stay informed.
• Keep an eye on the property market or engage a local agent for up-to-date insights.
• Be open to adjusting your investment strategy based on changes in your financial situation or external factors.

8. Prioritise your physical wellbeing

A smart start to the financial year is only useful if you’ve also got your health in shape. Not only will it ensure you’re in a position to reap the benefits of your hard work, but investing in good health practices will help you stay energised and focused on your financial goals for the year ahead while keeping stress at bay too.

Key actions:

• Commit to a healthy diet, regular exercise (at least 30 minutes daily), plenty of water, and adequate sleep (7-9 hours per night). These flow on to providing mental health benefits too – you’ll gain clarity, energy, boost your mood, and minimise your stress.
• Be proactive with your health by engaging in regular and routine check-ups with your GP, dentist, and any other relevant health professionals.
• Seek external support if and when you need it.

9. Don’t overlook your mental health

Mental health plays a significant role in your overall well-being, influencing how you think, feel, and handle everyday challenges. Keeping your mental health in tip-top shape means you’ll be more productive, fulfilled, resilient, and better at managing stress.

Key actions:

• Incorporate a regular mindfulness practice into your day – whether meditation or deep breathing exercises, every little bit counts.
• Prioritise self-care by making time for activities or hobbies that help you unwind. These go a long way in helping to prevent burnout and reducing stress.
• Phone a friend or expert if you’re feeling overwhelmed or stressed.

10. Keep your work/life balance in check

It’s only possible to prioritise your physical and mental health if you’ve carved out enough time to get the work/life balance right. And the success of your financial year and your relationships depend on this.

Key actions:

• Set clear boundaries around work hours and switch off email notifications after hours.
• Take regular breaks away from your desk during the workday and schedule these if needed.
• Don’t push through if you’re sick, take time off when needed, and use your annual leave.
• Carve out time for family and friends, as these relationships provide emotional support, fulfil your sense of belonging, and enhance your overall mental health.

11. Get your tax strategy in shape

While you’re probably patting yourself on the back for making it through the last tax period, now’s the perfect time to get proactive with your tax planning for the year ahead. Review your finances, ensure your current structure is tax-efficient, and assess whether any tax-saving opportunities exist. It’s worth meeting with an accountant, particularly if there have been any changes to your circumstances.

Key actions:

• Put proper systems in place (or use a specialised app) to streamline your processes, including tracking expenses, bank transactions, and your income.
• Ensure you know all deductions you're eligible for, so you’re compliant and receiving what you’re owed.
• Review your business structure and potential tax offsets with your accountant.

Realise your goals this financial year!

The start of the financial year is your opportunity to reset, plan, and take control of your financial and broader well-being. A smart start with key strategies around tax, budgeting, property investment, and an ongoing investment in your physical and mental health will set you up for a stress-free and successful year ahead. If you’re growing your property portfolio or just getting started, expert real estate advice can make all the difference. Speak with your local First National Real Estate team for invaluable local property insights.

Source: https://content.firstnational.com.au/blog/smart-start-financial-year-guide/