Monday September 1 marks the start of spring, and it is also the start of Money Smart week. The week is an initiative to promote the importance of financial literacy, which is a topic close to our hearts at Value Beyond.
So if you’re thinking that the looming summer is time to get into shape physically, take the time to also get your finances into shape. Take advantage of the change in seasons to make a change in your finances.
This time of the year is also a good time to get your tax information together to have your tax return prepared.
Despite the ATO allowing extended lodgement deadlines, the advantage is that if you are due a refund, you can get the money back sooner rather than later. If you have a payable, then knowing how much that is with 6 months before payment is required, allows plenty of time to put the right amount of money aside and avoid a nasty last minute surprise.
One other advantage is being able to plan out any tax instalments that might be due over the next 12 months.
As the saying goes, knowledge is power.
Are You Money Smart?
Money is an integral part of our society, but how many of us actually know how to handle our money wisely?
Sadly, there is no proper financial education given during school years, which is the ideal time to be learning life long skills on how to earn, spend and wisely invest. This type of education would help us make our money work for us, instead of us working for it.
Of course, all is not lost when it comes to learning new skills like money management, no matter what your age!
The main areas in which we see people asking for, or needing, guidance are:
- Tax: Given the impost that tax can have on personal budgets and financial well-being, this is clearly an area of focus for Value Beyond. A large portion of the issues we resolve don’t solely focus on the amount of tax payable or refundable, but the timing of the cash flows to ensure that other areas of business or personal budgets are not adversely affected.
- Superannuation: For some, this can be the biggest, or second-biggest, asset (behind the family home), so it makes sense to know where you super is, how much you have, and what it is invested in to ensure the best returns and lowest fees. Take control of your retirement money!
- Debt: Knowing how much you owe across all debts, which have the highest interest rates and regularly reviewing either paying off debt or whether you can get a better deal on your debt, can all add up to big dollars saved.
- Spending: Are you spending your money on needs, or on wants? Do you have a budget and know how much you spend on each category of expenses? Sometimes this is a personal thing, particularly when it comes to hobbies or passions. However, it doesn’t take much effort to find ways to make some savings, and make your hard-earned dollars stretch further.
So, you want to know more about how to manage your money, but you don’t know where to start?
Start with this simple process – write down the full list of all your assets, and all of your debts, and put a dollar figure next to each item. This should be the market value of assets (be realistic), and the balances of your debts.
Then list out the amounts of your income and all of your expenses – be honest here!
With this all down on paper you now have:
- What you own
- What you owe
- Money coming in
- Money going out
Adding up assets and taking away liabilities gives you your current net worth.
Add income and take away expenses and you have your net income, or financial capacity. This is the ability to change your current financial position or achieve your goals.
Now you know where are positioned, and what your capacity is to change that position.
The most important tip? Everyone has to start somewhere, and where you currently are is as good a starting point as any!
For any questions or advice, contact us at Value Beyond to talk to us about your options and how we can help, or put you in touch with those who can.
Managing payment of your staff’s super
For employers who are required to pay superannuation for their employees, getting the amount and timing of payments right is imperative to avoiding additional costs and penalties.
Superannuation is payable to each employee’s superannuation fund within 28 days after the end of each quarter, and failure to pay by the deadline can have ramifications for claiming a deduction for superannuation contributions, as well as incur further charges.
The introduction of the new SuperStream data standard for superannuation payments has also brought in an extra complexity and legal requirement to report all contributions and payments electronically.
One way to meet all these requirements is for employers with 19 or fewer employees to use the ATO’s Superannuation Clearing House.
The benefits of the Superannuation Clearing House include:
- Make one secure electronic transaction which distributes the contributions to the employee’s nominated fund
- Reduces time and paperwork that would normally be involved in paying to numerous super funds
- Employee details are stored securely in the clearing house, meaning only contribution amounts need to be entered
- Payments through the Clearing House meet the super guarantee obligations, as well as the new SuperStream data standard
For more information on the Superannuation Clearing House to determine whether it is right for you, contact Value Beyond or find more information on the ATO website.
Further tools and information can be found at https://www.moneysmart.gov.au/ or http://moneysmartweek.org.au/.