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10 New Year’s Financial Resolutions

Expert Nick Bruining offers his top money tips for 2019
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Are you worried about your finances in 2019?

Nick Bruining, one of Australia’s most-respected financial planners, says now is the right time to think about your money issues. Here are Nick’s 10 New Year’s financial resolutions.

1. MAKE AUTOMATIC PAYMENTS

The real trick to making our New Year’s financial resolutions stick is to get onto them now and to automate the process. Log into your online banking and click the little link marked scheduled payments to set them up. Time them just after pay day so that the money will be there and you won’t cop a failed transaction fee.

2. PUMP UP YOUR KIDS’ RETIREMENT FUND

You can give your offspring or grandkids a retirement head-start as they’re starting their working lives.  If you contribute $1000 to their superannuation fund, they may well qualify for a $500 bonus under the Federal Government super co-contribution scheme. The scheme that matches contributions at 50¢ in the dollar up to $1000 of extra contributions.  Workers earning up to $37,697 generally qualify for the full bonus. Above $37,697 co-contributions slowly phase out until they step when income hits $52,697.

3. LOOK AT THE PENSION LOAN SCHEME

If you’re over 65 1/2 and a bit short on cash, you should wrap your head around the Federal Government’s version of a reverse mortgage – the Pension Loan Scheme. The scheme is being pimped-up by the Government in preparation for a July 1 relaunch. The new scheme will allow a senior who owns his or her own home to get paid up to 150 per cent of the full age pension. Based on today’s rates, that would mean a single person will be able to access up to $1374 a fortnight and couples, a combined $2762. Like a reverse mortgage, the debt plus interest (at 5.25 per cent) is repaid when you move.

4. USE APPS TO TRACK YOUR SPENDING

Download an app like Pocketbook or TrackMySpend to automatically track where your money goes. Pocketbook can even connect to your bank account and will automatically categorise your spending into areas like groceries, fuel and entertainment, based on the type of business where you used a card to pay for it. You can set alerts and budgets which will
go off when you look like exceeding the limits.

5. SORT OUT YOUR LIFE INSURANCE

It’s time to get your life insurance sorted. As the year rolls on, we’ll all have a birthday and
if you have life insurance, that means higher premiums. Life insurance is great when you have obligations and nothing to fall back on. As we get older, the picture changes. By the time we hit 50, premiums will be increasing by about 10 per cent per year. As we get older, the picture changes. Increases in super and reduced debt means you can reduce the level of cover and save on premiums.

6. FIND YOUR LOST SUPER

Remember that part-time job you did 10 years ago over summer?
If you were over 18 and earned more than $450 pre-tax in any calendar month, the boss was obliged to pay 9.5 per cent of that amount to super. If it’s lost, you can find
it using the my.gov.au lost superannuation service.

7. REDUCE YOUR CREDIT CARD LIMIT

If you’re perpetually maxing out your credit cards, as the debt comes down, reduce
the credit limit. In the perfect world, you’ll be that organised that the card will become what it should be, temporary credit to get you to the end of the month. If you start to work to that goal by reducing limits as you go along, you’ll not only feel great, you’ll be saving a fortune – a card that has $10,000 consistently owing throughout the year is costing you close to $2000 in interest.

5. SORT OUT YOUR LIFE INSURANCE It’s time to get your life insurance sorted. As the year rolls on, we’ll all have a birthday and if you have life insurance, that means higher premiums. Life insurance is great when you have obligations and nothing to fall back on. As we get older, the picture changes. By the time we hit 50, premiums will be increasing by about 10 per cent per year. As we get older, the picture changes. Increases in super and reduced debt means you can reduce the level of cover and save on premiums. 6. FIND YOUR LOST SUPER Remember that part-time job you did 10 years ago over summer? If you were over 18 and earned more than $450 pre-tax in any calendar month, the boss was obliged to pay 9.5 per cent of that amount to super. If it’s lost, you can find it using the my.gov.au lost superannuation service. 7. REDUCE YOUR CREDIT CARD LIMIT If you’re perpetually maxing out your credit cards, as the debt comes down, reduce the credit limit. In the perfect world, you’ll be that organised that the card will become what it should be, temporary credit to get you to the end of the month. If you start to work to that goal by reducing limits as you go along, you’ll not only feel great, you’ll be saving a fortune – a card that has $10,000 consistently owing throughout the year is costing you close to $2000 in interest. 8. USE YOUR SUPER TO SMASH DEBT If you’re over 57 then you might start to wipe out what’s left on your mortgage while rates are still low, using your super. Using a transition-to-retirement account-based pension, you can access up to 10 per cent of your super and use it to smash debts. Under 60, some tax might be payable but over 60, it is tax-free. 9. USE CONCESSION CARDS Many of us are finding things a bit tough and pressure can be relieved by accessing Centrelink-issued concession cards which can save you thousands. Those on income support payments will have these cards anyway but the low-income healthcare card is a little-known beauty. It’s available to any single who can prove their income averaged less than $4448 over an 8-week period. For couples, the threshold is $7680 and for each dependent child, add $272. Once you hold the card, income can increase by up to 25 per cent before you lose it. 10. THINK ABOUT SPOUSE SPLITTING If there’s an imbalance in the amounts in super between you and your partner, then even things up by using a nifty trick called spouse splitting. This can be handy if there is an age difference because money withdrawn from super is tax-free once you are over 60. Also, money inside super for someone under pension age is not counted by Centrelink. It means one of you could claim an age pension with the money “hidden” inside super. You can split a maximum of

8. USE YOUR SUPER TO SMASH DEBT

If you’re over 57 then you might start to wipe out what’s left on your mortgage while rates are still low, using your super. Using a transition-to-retirement account-based pension, you can access
up to 10 per cent of your super and use it to smash debts. Under 60, some tax might be payable but over 60, it is tax-free.

9. USE CONCESSION CARDS

Many of us are finding things a bit tough and pressure can be relieved by accessing Centrelink-issued concession cards which can save you thousands. Those on income support payments will have these cards anyway but the low-income healthcare card is a little-known beauty. It’s available to any single who can prove their income averaged less than $4448 over an 8-week period. For couples, the threshold is $7680 and for each dependent child, add $272. Once you hold the card, income can increase by up to 25 per cent before you lose it.

10. THINK ABOUT SPOUSE SPLITTING

If there’s an imbalance in the amounts in super between you and your partner, then even things up by using a nifty trick called spouse splitting. This can be handy if there is an age difference because money withdrawn from super is tax-free once you are over 60. Also, money inside super for someone under pension age is not counted by Centrelink. It means one of you could claim an age pension with the money “hidden” inside super. You can split a maximum of 85 per cent of the previous year’s concession contribution but not an existing balance.

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