Mr Taxman
Change the way you feel about taxes.
Get informed and discover what the taxman doesn't want you to know.
Sharing it with Australia, Mr Taxman is a regular Woman’s Day columist and TV finance commentator
  • click to visit Mr Taxman on Twitter
  • click to visit Mr Taxman on FaceBook
  • rss

How to make your money work smarter

Oct 26, 2010

You have worked hard for your money so the last thing you want is to have nothing to show for it in retirement.   With some dedication and planning, it is possible to make your money work smarter and help you achieve your savings goals quicker.

Count the pennies ...

... and the pounds will look after themselves.  Being diligent on your spending (and saving) patterns, via the good use of budgets, will make a huge difference to your savings at the end of the day.  Stop any impulse buying.

Pay now, re-draw later

Don't let your spare cash sit idle.  If you have a home loan then make extra payments.  You can re-draw the money later if you need it but whilst it is sitting there, it will save you money.  Making fortnightly payments also makes a huge difference.

Maximise your interest on savings

Money makes money.  If you have saved up a lump sum, look at interest comparison websites, such as Rate City and Mozo, and get a higher rate on your hard earned.  If you have got savings that you don’t want to touch then a term deposit might be the best account for you. 

Arrange direct debits

If there is no money in your bank account then you are least likely to spend it.  Don’t tempt yourself.  Arrange payments to come out of your account the day after you get paid.

Super size me!

Superannuation is the best tax effective investment vehicle for savings.  Whilst earnings are taxed at a maximum of 15% and capital gains up to 10%, they can be tax-free with the right investment strategy within a self-managed superannuation fund.  With limited access to super funds, you are also limiting your ability to spend.

Greater return means greater risk

This has to be one of the best lessons learnt from the GFC.    Some returns may be too good to be true so don't fall for the trap in trying to chase the big returns.  5% of something is always a lot better than 50% of nothing.  Do your research first. 

Buy online

The world is such a small place these days with the internet ... and cheaper too.  Online retailers do not have the same overheads as a lot of their competitors so there are bargains galore to be made.  Half an hour on the internet could save you thousands on some items. 

Invest in the kids name

Kids under 18 can earn up to $3,000 each year tax free ... so why pay up to 46.5% tax on your investment earnings if you can get away with paying the taxman nothing!  Partners on lower tax brackets should also have investments in their name rather than yours.

Eliminate non-deductible debt

You eventually need to pay for your house and car so why not start straight away paying it off as soon as possible.  Putting funds against your home loan at 7% is equivalent to earning up to 13% pre-tax.  And it is risk-free too!  

Tags: FamilyFinancial PlanningSuper

Author: Mr Taxman

Comments

Post a New Comment

Media Availability

Are you interested in booking Mr Taxman for a speaking engagement or requesting his viewpoints for an article?

comments-rhsLatest Comments

  • "Good Day Sir/Madam: Do you need an urgent loan to finance your business or in any purpose? We are certified,legitimate and international licensed Loan Factory we offer loans to Business..."

    By: bdsfn.com@gmail.com at Jun 22, 2017 11:52AM

    Post: Nothing negative about investing in Germany

  • "Hi there, I am non resident and just bought a property in Perth. Property price was $800k, Australian bank had lent me $200k against the property, and rest $600k I have loaned from my bank in UK..."

    By: Nick at Jun 16, 2017 12:00AM

    Post: Buying property as non-resident

  • "Hi there, I have an enquiry regarding CGT please. My son purchased a house nearly six years ago (6 years this December 2017) When he purchased he lived in it for 8 months but then he decided he..."

    By: maree at Jun 15, 2017 11:45PM

    Post: Little known ways to reduce capital gains tax on your investment property

  • "I have a similar situation. I live overseas but visit Australia and am an Australian resident for tax purposes. I am marrying an American who also lives overseas. I have a property in Australia so it..."

    By: Bron at Jun 14, 2017 7:32AM

    Post: Marriage

  • "I have recently got a job as a contract sales consultant and spend a lot of time on the road, but they don't offer a car allowance, I pay for all exspenses on a flat hourly rate."

    By: Sandy at Jun 13, 2017 10:26AM

    Post: Claiming car expenses