New financial year, new you: 5 mid-year money tips to re-energise your finances
2020 is somehow already halfway gone, but that doesn’t mean all is lost for your financial outlook for the rest of the year. After all, July 1 marks the beginning of a new financial year and a fresh opportunity to kick start your goals.
So if you need just a little bit of extra motivation to re-evaluate your finances, sit back and check out these five tips to help you budget, save and put some money back in your pocket!
1. Ditch and switch to a better deal
Concerned about the impact working from home has had on your energy bills? How about the current rate you’re paying on your home loan?
Well don’t be complacent anymore - a new financial year calls for decisive action! If you’re feeling like your utility, banking or insurance providers aren’t giving you the value for money you deserve then don’t be afraid to make the switch.
After all, in most cases loyalty really doesn’t pay. That’s why reassessing your current offers and making the move to a better value deal could be one of the easiest ways to put thousands of dollars back in your pocket.
The number crunch: Refinancing your mortgage is likely to offer you the biggest financial payoff of all. For example, swapping from the average variable rate to the lowest variable rate currently in our database would save you a whopping $76,455 in total or $3,060 per year! That’s based on a $400,000 loan, being paid off over 30 years by an owner occupier making principal and interest repayments.
2. Re-evaluate your saving goals
We’re halfway through the year, which means now is a great time to reflect on the savings goals you set at the start of 2020 to see if they’re still heading in the right direction. And given the sweeping impact COVID-19 has had on most Australians, it’s absolutely fair if they’ve gone off course in the interim.
Maybe you were saving up for a trip to Japan later in the year that’s now been changed to a domestic holiday instead? Perhaps the economic upheaval from COVID-19 has inspired you to build an emergency fund for the first time, or even made you re-double your efforts towards saving up for a first home?
Whatever your goal is, now’s the time to re-evaluate it and put your new strategy in place to achieve it. And part of that strategy should be working out where the right place to store your savings is.
If you’re not planning on touching your savings for a while it might be worth considering a term deposit which guarantees a fixed rate of interest over a set period of time (generally from 3 months to five years).
Otherwise if you like the idea of being able to access your savings in the case of an emergency, a savings account could be a better bet.
To give you a snapshot of some of the most competitive savings account rates around, here are the top ongoing savings account rates currently in our database:
|Interest rate||Monthly conditions|
|86 400 - Save Account||1.85% (Up to $300k)||Min. $1k deposit into an 86 400 savings or transaction account|
|BOQ - Fast Track Saver||1.85% (Up to $250k)||Min. $1k deposit into a linked BOQ transaction account|
|Up - Saver Account||1.85% (Up to $50k)||Min. 5 purchases with a linked Up debit card|
|ING - Savings Maximiser||1.80% (Up to $100k)||Min. $1k deposit into a linked ING transaction account plus 5 card purchases|
3. Review your budget
Similarly to your savings goals, being half way through the year means you probably have a good idea of whether your budget is on track… or veering slightly off course. Not to worry though, because it’s never too late to make a few adjustments.
There are plenty of ways to cut your spending and get your budget on track, from ditching one of your less successful New Year's Resolutions (looking at you yoga class I never go to) to cutting back the amount you spend on takeaway.
If you do need a little bit of help along the way though, check out these seven smartphone apps that will supercharge your tracking and saving (and keep you honest).
Need to start completely from scratch? Circumstances change, so plug in your updated income and expense details into a budget calculator to see how your financial picture has changed as well.
The number crunch: Finding ways to rebalance your budget doesn’t mean you have to adopt a life of complete frugality overnight. It can be as simple as spending in moderation. For example, love that $4 takeaway cappuccino each morning? Cutting back to having one every second day would save you $728 each year!
4. Prioritise and ditch your debt
When it comes to debt there’s absolutely no time to waste.
First things first, work out which of your debts have been causing you the most pain this year. There’s no point targeting your student loan debt which is growing at the rate of inflation (2.20%), when you’ve got car loan (e.g. 7.50% interest) or credit card (e.g. 18.50% interest) debt burning a bigger hole in your pocket.
Got multiple loans or credit cards to pay off? A debt consolidation loan could be the option for you, as you'll be able to package all that debt into a single loan with (hopefully) a much lower rate.
If ditching credit card debt is the focus, then it could be a good idea to find a 0% balance transfer deal which will allow you to focus on paying off your debt rather than just interest payments.
To give you an idea of some of the options out there, here are the five longest balance transfer credit card offers in the Mozo database:
|Balance transfer length||Conditions|
|Citi - Rewards (Balance Transfer Offer)||26 months||$149 annual fee and 1.50% balance transfer fee|
|ANZ - Low Rate||22 months||$58 annual fee and 1.50% balance transfer fee|
|HSBC - Platinum Credit Card||22 months||$129 annual fee|
|HSBC - Low Rate Credit Card||20 months||$99 annual fee and 2.00% balance transfer fee|
5. Maximise your tax refund
Completing a tax return is one of the first financial chores we undertake in the new financial year. But instead of rushing through it as quickly as possible, it may be worth taking some time to ensure that you’re either maximising your refund or minimising any tax you owe.
With millions of Australians working from home since March as a result of COVID-19, tax returns have been made a little bit more interesting than usual with the potential to claim everything from internet and phone expenses, office set ups and stationery.
That’s on top of any normal deductions you’re entitled to in your industry throughout the 2019-20 financial year, plus any other concessions you’re entitled to or outstanding obligations.
Just don’t forget that you may be required to provide proof for many claims you make, so make sure all your records and receipts are in order first.
Need a good place to stash your refund once it hits your bank account? Check out these 5 high interest savings accounts for your tax return.