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Money Matters: June Edition

Did someone say the end it was the end of the year? Wow, its only June. Ohh o.k. I get, it it’s the end of the financial year. That’s right the time in which shortly we will receive those annual statements and think – “where is all that money they’re saying I made”? You know that thing called the group certificate, the one with all the big numbers. Whether its 4, 5 or 6 zeros and then you look at the bank account and unfortunately there is a zero, a decimal point and followed by 4, 5, or 6. Never mind, if your anything like our Moneysoftarians, you would have already pre-planned, organised your paperwork and knocking on your accountants / tax agents door come 3rd July – or maybe that was just me. Rest assured if you’re just getting organised we like simplifying life and taking the complex out of money, so have a read of Now that we have tax organised lets get on to a general financial update. This month was all about the bills (not the phone bills but more the parliamentary bills - remember that budget a couple months back?) Many have now become legislation come 1st July 2014. In a nutshell;
  • The 2% Budget Repair Levy received the approval for anyone earning over $180,000
  • Medicare Levy increases to 2% and
  • Super Guarantee (SGC – what your employer pays into your super account) increases to 9.5% - woo hoo!
  • There was also a raft of senior citizen and pension changes, which you should revert to for all changes that may affect your circumstances.
Outside of the broader regulation there are also some key legislation introductions beginning 1 July 2014 resulting from the FOFA (Future of Financial Advice) regulation, which began in 2012, and consecutive introductions every year till 2016. These regulations are there to protect financial advice recipients (Australians) and guide financial planners and advisers through the areas of Ongoing Advice Fees, Best Interest Duty and Conflicted Remuneration. For most of us that seek advice, things should be relatively unchanged other than a few extra pieces of paper in the mail form your financial adviser in the coming years. For new advice recipients expect further confusion and “red tape”. I guess there have to be laws for what seemed logical once upon a time! In other monthly news updates; Another rate stall for the RBA this month leaving interest rates unchanged. The dollar took a rise over the month and closed the financial year at US91.3 The job rate yet to be released as at the date of writing however expect a slight change from the trickle of the mining sector as it contracts. Caution: With the end of the financial year now closed off, its wise to “prepare” your taxes sooner rather than later – and know where you stand in the event of. Many taxpayers get caught out with bank interest and dividend income that may be subject to tax. Know your lodgment deadlines and ensure you don’t leave ATO debts outstanding; their interest is calculated daily and rate in the double digits. Tip: On the flip side preparing your taxes early means for those that are due a refund plan how you will use the money – forget spending, you have done enough of that in the last year. Think repaying debt and a simple method is to think poker; highest card(s) win. So look at your debts and pay off the one with the highest interest rate first, then work you’re way backwards to your principle mortgage.