Everyone loves a bargain, but as cost-of-living increases continue to put pressure on budgets, tracking down a freebie or two can also take some pressure off.

Getting things for free that you would otherwise have had to fork out for, also means you can save while still having some room to splash some cash around for the fun stuff.

Aside from the obvious cost savings of a freebie, it’s a clever way to test things out before you’ve committed to buying something that you may not want or need in the long run. It’s awful to spend money on something, only to find out that you’ve wasted your hard-earned cash. Not to mention the environmental benefits of using goods that might otherwise be going into landfill.

Score a freebie from the kindness of others

There are loads of ‘buy nothing’ groups and sites such as Nextdoor or Freecycle that have sprung up to give away things that people don’t want anymore including furniture, appliances, moving boxes and plants.

‘Buy nothing’ groups also sometimes organise clothing swaps. The clothes you don’t wear any more might be just what someone else is looking for. Keep your eye out for any in your area or even organise your own with a group of friends.

If you just need an item for a short period of time it might make sense to borrow it. Online libraries make it easy to exchange goods on a temporary basis at no cost. It’s a great choice if you just need something for a short space of time – like tools for a project or a tent to take off camping for the weekend. A site worth checking out is Melbourne’s  The Sharing Shed.

Maximising your rewards

Even if you are doing your best to not spend, there are times when you can’t avoid pulling out the credit card. However, your credit card can give you access to a host of freebies like hotel stays, flights, gift cards and appliances via rewards programs.

Just be conscious that finding the right credit card means considering interest and fees. No rewards program is worth paying a lot of interest or being stuck with expensive fees. And not all rewards programs are created equal, some are more generous than others so be sure to read the fine print.

Using your credit card for as much as possible of your eligible spending will help maximise the points you can earn, but just make sure you can manage the repayments on the card, so you are not incurring late fees.

You could also look at rewards programs with your favourite businesses. Many shops and restaurants offer special perks for members’ birthdays or for regular customers, offering freebies such as food, shipping, gift cards, merchandise and movie tickets.

Of course, there are other ways to score freebies from businesses, but they usually want something in return.

The gift of giving

Many businesses offer discounts, vouchers and free products or services in exchange for supplying reviews on sites like The Champagne Mile. As well as the attraction of free stuff there is also a feel-good factor that you are helping the businesses you are reviewing.

It’s also common for businesses to offer free trials to introduce you to their company or products, and this can be a fantastic way to try something for free for a brief period. Just be aware that you’ll need to give them your credit card to access these so it’s important to keep track of the cancellation date and cancel at the end of the trial to avoid incurring costs. Be careful though – scammers often dangle an enticing freebie to get you to give them your credit card details so verify any offer to make sure you are not being swindled.

Once you start seeking out freebies you’ll find a lot more – and you won’t just be getting free stuff, you’ll be freeing up savings for the important, big-ticket items.

The start of a new financial year is the perfect time to get your financial affairs in order. Whether it’s tidying up your paperwork, assessing your portfolio or dealing with outstanding issues, there are plenty of practical actions you can take.

Here are some strategies for starting the new financial year on the right foot.

Tidy up your paperwork

Dealing with the paperwork is the task most of us love to hate. But taking a day to trawl through the ‘To Do’ pile and the growing mountain of filing could be a good investment in yourself. What’s more, you might identify some savings.

Set your budget

A lot can happen in a year, so it makes sense to review your budget to ensure it still works towards your goals in the new year. This will help you track your changing expenses and ensure you’re not overspending. And if you haven’t got a working budget, now’s a great time to start. There are plenty of budgeting apps and tools available online that can help you get started.

Assess your portfolio

Another important step to take as you start the new financial year is to assess your investment portfolio.

Some important questions include:

• Why did you start investing and have your circumstances changed? For example, you may have started investing to receive a better return than your term deposits but now that term deposits rates have increased and share markets are challenged, should you revisit that goal?
• What is the investment performance? Is it in line with your expectation and the benchmark?
• Should you consider diversifying into different asset classes?
• Is dividend reinvestment the best option for you or should you take the dividend income into cash?
• Is your risk appetite still the same, or should you be aggressive or more conservative?

Check your insurance

Now is a good time to examine your insurances closely and to consider whether they match your needs and risks. It is also a good reminder to take note of policy renewal dates so that you can shop around to make sure you get the best price.

Understand Federal Budget changes

Keeping up to date with the commentary about Federal Budget initiatives may be useful.

The measures aimed at easing the cost of living will provide a boost to some. They include energy bill relief for concession card holders and energy saving incentives. Meanwhile those with chronic health conditions will benefit from a number of changes announced in the budget.

The Budget also included support for families with cheaper childcare and a more flexible Paid Parental Leave scheme, and incentives for some types of new home building projects.

Review your superannuation

A review – at least annually – of your super account is vital to make sure that:

• Your investments and risk strategy are still right for you
• The fees are reasonable
• Any insurance policies held in your super account are appropriate
• Your employer contributions are being made
• Your death benefit nomination is relevant
• You don’t have multiple accounts incurring unnecessary fees

You might also consider a salary sacrifice strategy, where you ask your employer to make extra super contributions from your pre-tax salary. These additional contributions are taxed at 15 per cent within the super fund, plus an additional 15% if Division 293 tax applies to you (income over $250,000).

Meanwhile, it is not too late to top up your super balance for this financial year using either concessional contributions (from your pre-tax income) or non-concessional contributions (after-tax income). Don’t forget the caps on payments, which are $27,500 for concessional contributions and $110,000 for non-concessional.

It is a good idea to get some expert advice regarding your super contributions, we can assist with the best ways to manage your contributions.

So, set yourself up for a fresh start to the year with some simple strategies to help you achieve your financial goals.

If you are saving for a long-term goal like a home deposit, it can feel like you have to miss out on things such as travel to keep your savings on track. That’s not necessarily the case, it is possible to have a fantastic holiday without breaking the bank or derailing your savings plans.

Let’s face it, cost of living pressures are being felt everywhere in our day-to-day budgets but even more so when it comes to things like flights and accommodation. While airfares have fallen from the historic highs experienced in early 2023, they are still pretty pricy, and with booming demand for accommodation, comes equally high prices.

If you want to get away for a holiday but don’t want to break the budget, here are some ideas to help you keep costs down when you travel.

Plan ahead for the best deals

While it’s lovely to head out of town on a whim, being spontaneous can be expensive. The sweet spot for international travel according to Skyscanner’s data is 22 weeks in advance but be aware that it varies from city to city. For domestic travel it’s also best to be prepared as the best bargains can be had 21 weeks in advance.

Flights are often more expensive around school holidays and different destinations are pricy for both flights and accommodation during their peak travel times. For example, fares to Bali skyrocket during winter when Australians want to escape to tropical paradise, but if you head to Bali during the wet season from October to March you may be able to access to great deals, if you don’t mind a bit of rain.

Keeping accommodation costs down

Once you’ve got flights sorted it’s time to think about accommodation and if you think booking a place to stay for a holiday has gone up over the past few years – you would be correct! Airbnb has released figures showing the cost of short-term stays has gone up 35% in the past three years.

To keep costs down you might want to consider housesitting – either informally through friends or family, or through online services that enable hosts and guests to make arrangements. Aussie House Sitters claim to be “the largest, most trusted house-sitting website in Australia.”

Volunteering in Australia or abroad also provides access to free accommodation and the joy of knowing you are helping a worthwhile cause. Free Volunteering is one of several sites that offer opportunities ranging from teaching English overseas to helping out at a hobby farm or hostel in exchange for free board.

You might also consider a working holiday, with jobs ranging from picking fruit in Cairns or serving tables in Bondi to earn money while enjoying a bit of a change of scenery. Check out Working Holiday Jobs.

Hit the road for a budget holiday

You could also avoid airfares and accommodation altogether and head out on the road to explore your own backyard. Camping can be an inexpensive way to see the country and while the cost of all the equipment you need may be intimidating, embrace the sharing economy and check out sites where you can borrow a range of stuff from tents to stoves, or ask friends if you can borrow their gear.

Getting away in a campervan has never been more popular, but when customers only want a one-way rental, it provides opportunities for bargain hunters as rental firms will offer discounts for vans to be relocated from city to city. If it works in with your itinerary it can be an affordable way to get from “A” to “B”.

Finally, it’s easy to get carried away when you are on holiday and break the budget, so it’s a good idea to not only plan your break and develop a budget you are comfortable with but also check in from time to time during the trip, to see whether you need to tighten the belt a little or can afford to lash out on that great restaurant you just spotted.

With a bit of planning, you can come back with incredible memories AND a healthy bank balance!

The thought of retirement is an enticing one for many of us. Imagine throwing off the shackles of the workforce and being able to do whatever you want, whenever you want. But why wait until you are retired to do the things you love?

Retirement is a time when we finally have the space to do what we want to do with our lives, whether that’s travel, developing and learning new skills, taking up hobbies or just enjoying the company of those we care about.

The problem with waiting until we are retired is we are postponing engaging in things that could be making us happy right now. Exploring what gives us joy now and developing those skills will make for a much easier transition as you wave goodbye to your working years.

Something to retire to

Retirement represents a big shift in the way we live our lives and it’s not uncommon for that adjustment to be a little challenging. For many, our jobs give us a profound sense of identity and define how we perceive ourselves, so our sense of self can suffer when we leave the workforce. There is also often a gap in our lives where work used to be.

That’s why rather than looking forward to retiring from something, ‘have something to retire to’ is a common piece of advice to encourage people to think about what they want their life to look like when they leave the workforce.

Think about what defines you now and satisfies you outside of work, and putting in place a plan of how that may play out in retirement can be a good idea.

Start today to do the things you love

While it can be hard to carve out time while you are still in the workforce, it’s possible to take small steps and set aside dedicated time each week or commit to activities that won’t take a lot of your time.

If you are keen to travel when you retire, consider signing up for a short course in the language of the country you are keen on visiting to get prepared for the trip of your dreams.

Or if you want to finally write that novel you’ve been mulling over for years, set aside a little time now to draft a framework and get a head start. Who knows by the time you retire you may be on your second novel!

Keen to do more exercise? Join a gym now and get into a routine – even if you only manage to get there a couple of times a week it’s a good start.

It takes a while to develop new habits and skills so starting to pick up the things you want to explore in retirement now sets you up for a smoother transition when you have more time to devote to these activities. Starting now also gives you a chance to try things out and see if they are something you want to commit time and energy to.

Fostering connections with those you care about

While spending time doing things you love makes for a happy and satisfying retirement, another important factor is being around people you enjoy being with.

Think about the people you enjoy spending time with and foster those friendships right now. Not only will it make for an easier transition when you retire, it will also bring you joy and the benefits of those relationships right now. There is always room in your life for making new friends too!

The best laid plans can change

It’s important to be open-minded in your plan of how you see your retirement unfolding. Remember that not everyone retires on their own terms. Some need to retire sooner than expected or in a different manner than expected due to ill health, caring for a family member or because of a decision or situation in the workplace.

On that basis it’s important to live well now – enjoy your present life and embrace the things that make you happy as you’ll also be setting yourself up to enjoy retirement – whether it’s just around the corner or still a way off.

As our superannuation balances grow larger, it makes more sense than ever to keep track of the many rules changes that have recently happened or are coming up soon.

Australians are investing more in super – almost $151 billion dollars in the year ending March 2023, an increase of 11.3%

Those extra contributions, plus the rebound in the financial markets, have resulted in super assets of around $3.5 trillion.

And it is being put to good use. We took out lump sum payments totalling $53.5 billion dollars during the 12 months and pension payments of $42.3 billion.

Quarterly rate of return

To keep your super on track for a comfortable retirement, check out these latest changes in case they affect you.

Super bonus for workers

For employees, the new financial year kicks off with an increase in the Superannuation Guarantee paid by employers. It is now 11% of eligible wages.

This rate will increase by 0.5% each year until it reaches 12% in 2025.

The Australian Tax Office will also be cracking down on employers who don’t pay on time or at all. From 1 July 2026, super must be paid at the same time as wages rather than at the end of each quarter.

The recent Federal Budget also provided funds to help the ATO enforce super payments and recover unpaid amounts.

Minimum pension drawdown increase

A COVID-19 measure to reduce the minimum drawdown required on super pensions will end on 1 July 2023.

Investors receiving super pensions and annuities must withdraw a minimum amount each year. The federal government reduced this amount by 50% over the last four financial years to help those wanting to protect their capital as the markets recovered from the chaos of the pandemic.

You can find out more by visiting the ATO’s minimum pension standards.

Transfer balance cap to be lifted

The maximum amount of capital that can be transferred to your super pension will increase to $1.9 million from 1 July 2023.

The transfer balance cap limits the total amount of super that can be transferred into a tax-free pension account. This is a lifetime limit.

The cap is indexed and began at $1.6 million when it was introduced in 2017. Increases in the cap are tied to CPI movements.

You can see your transfer balance account and cap information in your online ATO account.

Extra tax for large balances

Investors with super balances of $3 million or more will lose the benefit of super tax breaks on earnings. From 1 July 2025, taxes on future earnings will be 30% instead of 15% although they will continue to benefit from more generous tax breaks on earnings from the funds below the $3 million threshold.

This change is expected to apply to around 80,000 people.

Other recent changes

A number of changes announced in both Federal Budgets last year have also been slowly introduced over the past 12 months.

In one major change, the minimum age was lowered for those able to invest some of the proceeds of the sale of their homes into super, known as a ‘downsizer contribution’.

From 1 January 2023, if you are aged 55 or older, you can now contribute to your super up to $300,000 (or $600,000 for a couple) from the sale of their home.

The home must be in Australia and owned by you for at least 10 years.

In another residential property initiative, a scheme that allows investors to use their super fund to save for their first home has been expanded.

The First Home Super Saver Scheme last year increased from $30,000 to $50,000.

The Scheme allows you to make contributions into your super then apply to release them when you want to purchase your first home, provided you meet the eligibility requirements.

Another significant reform for many has been the removal of the work test for those under 75, who can now make or receive personal super contributions and salary sacrificed contributions. (Although the ATO notes that you may still need to meet the work test to claim a personal super contribution deduction.)

Previously if you were under 75, you could only make or receive voluntary contributions to super if you worked at least 40 hours over a 30-day period.

A further change introduced last year was the removal of the $450 per month threshold for super contributions.

Employers must now pay the super guarantee to all employees regardless of their earnings however, employees who are under 18 still need to work more than 30 hours in a week to be eligible.

While caps have been lifted and programs expanded, at least one scheme has not changed. The Low Income Super Tax Offset (LISTO) threshold remains at $37,000. LISTO is a government payment to super funds of up to $500 to help low-income earners save for retirement.

If you earn $37,000 or less a year you may be eligible a LISTO payment. You don’t need to do anything other than to ensure your super fund has your tax file number.

Finally, a project that may pay off down the track, the Federal Budget included continued funding for a superannuation consumer advocate to help improve investors’ outcomes.

Expert advice is important to help navigate these changes over the coming year. Call us for more information.

The rising cost of living is grabbing all the attention right now as people struggle to pay the increasing prices. But in the meantime, our collective wealth has been growing steadily and is being transferred to the next generation at increasing rates.

In fact, the value of inheritances as well as gifts to family and friends has doubled over the past two decades.

A 2021 Productivity Commission report found that $120 billion was passed on in 2018 and that amount is expected to grow fourfold between now and 2050. In 2018, the value of the average inheritance was $125,000 while gifts averaged $8000 each.

So, there is a lot at stake and it means that estate planning – a strategy for dealing with your assets after you die – is vital to help fulfil your wishes and protect the interests of the people you care about.

One powerful tool in planning your estate is a testamentary trust, which only comes into effect after your death. It operates in a similar way to a discretionary family trust and your Will acts as the trust deed, providing instructions for the trust.

It allows you to control the distribution of your assets and provides a way of managing any tax implications for your beneficiaries. Testamentary trusts are often used to protect assets from unforeseen circumstances such as lawsuits, creditors and divorces and they can help to preserve a family’s wealth.

A testamentary trust can be useful for those with blended family relationships and children with complex needs. For example, a child with a disability who is unable to manage their own investments can be supported by the use of a trust. Testamentary trusts may also help to provide some certainty for parents that their young children will be provided for. They are also often used by philanthropists as a way of providing a legacy for a cause they support.

Choosing a trustee

If you are setting up a testamentary trust, you will need to appoint one or more trustees who will manage administration and distributions.

The trustee could be a family member (who may also be a beneficiary) or the role could be handed to an independent person or organisation.

Trustees should understand the tax situation of each of the beneficiaries to ensure that the timing and amount of distributions don’t inadvertently cause difficulties for them. Trustees must also lodge a tax return every year and maintain trust accounts and records.

As the ATO points out, for the trust to operate effectively, a high level of co-operation between family members may be important so that tax, financial and other information is shared.

The pros and cons

Whether or not you should set up a testamentary trust in your will depends on your own circumstances.

The positives include:

• The ability to control the distribution of income
• The possibility of some tax advantages for your beneficiaries
• A level of protection for your assets from lawsuits, family breakdowns and business difficulties
• A way of keep a family’s wealth intact into the future
• Support for vulnerable beneficiaries such as those with special needs or lacking financial experience and minors
• Can be used by anyone with assets to distribute, whatever the size of their estate

On the other hand, there are a number of considerations to be aware of such as:

• The complex paperwork and reporting required
• The cost to establish the trust and keep it running
• The possibility of disputes among beneficiaries or with the trustee over the future of the trust, distributions, and its administration

Testamentary trusts are a valuable strategy to help ensure your wishes are followed. They can shape your legacy, provide fairly for your loved ones and protect assets.

Call us if you would like to know more about establishing a testamentary trust and to see whether it is suitable for you.