The last two years have been tough for millions of Australians. In early 2021, APRA reported that superannuation funds received 4.9 million applications over the duration of the COVID-19 Early Release Scheme. At the time of the report, 98% of the applications had been paid – totalling around $36.4 billion.
For many people, this was an essential scheme that helped alleviate their financial hardship when they lost their jobs, or had their hours significantly cut.
Even if you didn’t withdraw money from your super, you might still have utilised savings or sold off some investments to help get you through. But now that we are starting to find our way out of the dramatic lockdowns and life is somewhat returning to normal, what can you do to boost your finances?
Assess your financial activity
First up, you need to assess your recent financial activity. You need to understand your current position to know where you should focus. Check your spending against your budget – have you cut back on some of your expenses? Or have you bought something unplanned?
Either way, this is a great opportunity to set yourself new budget goals. If you find that your day to day costs have increased, are there alternatives you could consider? Petrol is a good example here. With the price increasing almost every time you fill the tank, could you use public transport more often or pull out the push bike from the garage? Or if your utility bills are creeping up, maybe it’s time to review your supplier. Compare it against other companies in the market to make sure you have the best deal.
Review any debt
If you are now in a position where your debt is higher than you’d like, it’s worth contacting your creditors to discuss your personal situation. It doesn’t hurt to ask for a lower interest rate, and you might even find that some lenders are willing to negotiate specific plans that can help you pay off your debt more quickly than usual.
You could also ask them about changing your payment due date if you find that it’s out of sync with your pay cycle. Making the due date close to when your pay lands in your bank account can help you keep on top of repayments.
Mortgage rates are still incredibly low, so if you haven’t reviewed your current level of interest, now is the time. Speak with your bank or a finance broker to make sure you have the lowest rate available.
Regardless of whether you accessed your super or not, it is always worthwhile to try and boost its balance. So, once you’ve assessed your financial position and got a handle on your debt, it’s a good idea to look at your super too.
Setting up regular contributions can make a huge difference to your super balance when you allow it to accumulate over the years. The power of compounding interest means the younger you are, the greater the benefit extra contributions can make in the long run.
Even if it’s just $50 a fortnight, you could be tens of thousands of dollars better off by the time you retire.
If you can’t make regular contributions, you could still consider making one-off contributions. Maybe you could use a portion of your tax return or a financial windfall. Remember that there are annual contribution caps, so keep track of how much you deposit.
Finally, you should also consider consolidating your super… if you haven’t already. When you combine your accounts it reduces the amount you pay in fees and any associated insurance premiums. And of course, when all your super is in a single account, you maximise the compounding interest.
Speak to a financial adviser
We understand that everyone’s financial situation is different and here at First Financial we tailor our advice to suit your lifestyle. We have a unique client-first approach. We provide a truly personal experience by offering you a dedicated relationship manager, a single person to coordinate all your needs.
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