It seems we are always trying to find new ways to save money. No doubt you would have heard advice like ‘start a budget’ or ‘don’t overspend on unnecessary items’. But these concepts can be vague and mean different things to different people.
The team at Bridges Lake Macquarie came together to brainstorm their seven top tips guaranteed to bring you success.
Pay yourself first
To avoid the financial over indulgence we can all be guilty of, set aside money before you have the temptation to spend it. Make it a habit to regularly set aside a portion of your income and before you know it, a tidy sum will have accumulated that can be directed into strategic investment options.
Invest for growth
Over the longer term, investments like shares tend to give a better overall return than cash investments, but they are generally more volatile and can test your personal fortitude for risk. Choose investments that have a risk exposure that you are comfortable with.
Too good to be true
If it sounds too good to be true, it probably is. Steer clear of tax-driven investments with unrealistically high stated returns as they may be more dangerous than they seem. It is not worth risking your hard-earned money to take shortcuts.
Invest tax effectively
Money invested in Australian shares or managed Australian share funds could earn you imputation or franking credits. Depending on your marginal tax rate, these may reduce your income tax paid on any dividends or can potentially come straight back to you as tax refunds. Making investments here may be better suited to you as it offers a bonus at tax time.
Make the most of your super
Super is the most tax-effective form of retirement savings for most people. Check with your employer about the possibility of undertaking a salary sacrifice strategy – make additional super contributions directly from your pre-tax salary. Therefore, your super will increase and, because of the concessional rate of tax that applies to super, you will pay less in tax.
Spread your risk
Don’t pool all your (investment) eggs in one basket. Spread the areas in which you are spending your money; mix it up with some shares and property, fixed interest and cash. This diversified approach offers some protection in case one investment begins to decline in value.
Bridges has been providing financial advice since 1985, so we know what we are talking about. Often it pays to hear the advice of industry professionals, and an objective third party who you can be sure has your best interests at heart. Contact the team at Bridges Lake Macquarie today for an obligation free initial consultation and find out how we can help you develop a financial strategy specifically for you.
These are just a few tips to get you started. For further financial advice, please don’t hesitate to contact us!
Bridges Financial Services Pty Limited (Bridges). ABN 60 003 474 977. ASX Participant. AFSL No 240837. This is general advice only and does not take into account your objectives, financial situation and needs. Before acting on this advice, you should consult a financial planner.