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5 ways to save money in the new financial year

A women with red hair holds with a piggy bank to save money.
The new financial year is a great way to budget and save money. (Source: Getty)

It’s the beginning of the new financial year and the good news is that, unlike the beginning of the new year, these resolutions are far easier to achieve than eating better or going to the gym.

There are some easy ways to get your money working harder, from researching what items you buy can be claimed as a tax deduction in your industry to how making extra superannuation contributions can reduce the amount of tax you pay.

There are plenty of quick changes you can make right now to really supercharge your next tax return at the end of the financial year.

Here’s how.

Work out what can claim as a tax deduction

Did you know that the jacket you bought to keep warm while you work outside, or that bag you use to carry your laptop to the office could be a tax deduction?

While it depends on your industry, there are many things you are buying all the time that could be claimed when it’s time to do your tax return.

The trouble is many of us leave it too late to keep track of our purchases or keep the receipts. So, what can be done right now to ensure you don’t miss out?

Head to the ATO website and check exactly what you can claim for your industry. There are details on the different things that can be claimed so be sure to check it out now so you can track what you buy and keep the receipts.

Teachers can claim the cost of sunglasses, flight attendants can claim the cost of some skincare products and tradies can claim sunscreen and plenty of other products.

So, find out what applies to you and, when you buy it, make a note and keep that receipt because it will all add up over the year.

Scan or snap your receipts to file digitally

The days of keeping paper receipts in a dusty shoebox should be long gone. A photo or scan of your receipt is acceptable and it’s an easy way to grab those details and store them for the end of the financial year.

The ATO has an app that will scan and sort your receipts on the go, or ask the retailer you have bought from in store if they can email or text you the receipts when you make your purchase. Otherwise take a quick snap with your smartphone and file it for the end of the financial year.

Make extra superannuation payments

Making extra contributions to your superannuation is an easy and effective way to supercharge your balance.

You can make extra payments towards your super fund of up to $27,500 each year (this is called salary sacrificing or salary packaging) on top of the superannuation that your employer is required to pay.

Any salary sacrifice will be taxed at 15 per cent, which is generally lower than most of the marginal tax rates.

Put simply, you will pay less tax while boosting your savings for retirement. It's a win, win.

Time to make a budget

If the idea of making a budget makes you want to put your head in the sand like an ostrich, the good news is that budgeting has never been easier to set up.

Whether you want to get your spreadsheet on or use an app on your phone to do the hard work, the main point is that you should have a clear picture of what’s coming in and going out every month.

First, do a full audit of everything you spend money on each month that is essential. Essential costs are rent or mortgage repayments, energy bills, petrol, insurances, groceries, education fees and any other loan repayments.

Then, look at the non-essential but nice-to-haves - this might be eating out, subscriptions to streaming tv, buying clothes, beauty appointments, holidays or other lifestyle expenses.

Once you have the second list, it’s time to be honest and get ruthless about what you can cut from this spend.

When it comes to deciding what to cut and what to keep, it helps to be realistic too, if you love buying coffee everyday, giving it up will probably make you miserable so look for something else that can go.

From subscriptions to fast fashion, there is going to be something you can cut instead that you might not miss anyway.

Grow your money

With the rising cost of living, it may feel like it’s too hard to save money but, in a difficult economic climate, saving money has never been more important.

As a general rule, it’s a good idea to have enough savings in an “emergency” fund to see you through for three to six months.

To do this takes some effort, but the good news is technology can make it easier and quicker. Most banks offer a budgeting option to track spending or there are free apps online that can help you get a helicopter view of your finances easily.

To get your savings going, here are some quick tips:

  • Automate payments to your savings account as soon as you are paid. If you never see the money in your pay packet, it’s unlikely you will miss it and you can’t spend it.

  • Be clear about how much you need to save, it’s much easier when you have a goal to reach towards.

  • If you get a pay rise, bank the difference between your old salary and the new before you get used to the extra money.

  • Shop around for a better deal. From energy bills to health insurance, insurance to the internet it’s possible to save hundreds, or even thousands, of dollars by asking for a better deal or switching to another provider.

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