EOFY 2017: How to Prepare Your Finances
How time flies! The End of Financial Year is upon us once again. With June 30 looming, it’s a good idea to get your finances in order. You don’t need to wait until the final weeks of June to get into gear; there are things you can do now to reduce the stress towards the end of the month.
But where should you start, and what preparations should you make for next financial year?
1. Review all necessary receipts and documentation
Gather all your receipts from this year that could be tax deductible so that you won’t be running around like a headless chook a day before the deadline. If you can’t find the necessary receipts, you’ll still have time to obtain a copy. Being organised can reduce a whole heap of stress over the next few weeks.
A tax professional can also help you maximise your deductions to benefit your situation, so it’s always helpful to seek advice to save the most you can.
2. Review your financial position
Assess any debt you may have, both ‘good’ and ‘bad.’ Gather your credit card details, personal loans and other debts and have a go at paying them off before the deadline. If they seem overwhelming, one possible strategy you could look into is consolidating them into one manageable account to reduce the amount you owe. Try to avoid taking on any new debt until you get on top of what you already owe.
If you have a mortgage, increasing the size and frequency of repayments can be beneficial towards reducing the interest payments made over the life of the loan.
3. Manage your investments
If you have investments that you are thinking of selling, the timing can have significant impact on the tax you pay. This is because any capital gains you receive on an investment becomes taxable income, which can bump you up into a higher tax bracket depending on how big the gain is. However, if you are thinking of selling a non-performing investment before June 30, you might be able to use the capital loss to reduce tax on any other gains you make.
4. Prepay your expenses
If you push forward all work-related and other expenses for next financial year, you may be able to claim them against your income for this financial year. If you have an investment property, you may be able to prepay council rates and strata levies. The same goes for work tools – if you acquire them now, you could be entitled to an immediate deduction.
5. Set things in motion for next financial year
By making small commitments to paying off debt and saving more, you can make a dramatic impact on your future finances and emotional wellbeing. Creating a plan and sticking to it is the first step. Consider setting up an automatic, regular transfer into a high-interest savings account and don’t put off budgeting. Continue to tackle your debt throughout the year.
At Select, we make finance a simple and rewarding process. If you would like to find out more about your options this End of Financial Year or review your current finances, give us a call on (08) 9417 3399.