HOW TO PREPARE FOR THE END OF FINANCIAL YEAR

May 25, 2023

The beginning of the financial year brings the arrival of new opportunities. While New Year’s resolutions are made in January, the best time for planning when it comes to your finances is July & August.

There are numerous reasons why property should be in your financial plans this year. It is one of the safest asset classes that can help you generate a second income stream, especially in this tight rental market. So while the supply level is low and demand is rising, now is a good time to start planning! 

St Trinity is here to assist you in making the most of this new financial year, by maximizing your property goals! 

Whether you’re looking for an investment property or your first home, we have you covered!

Setting up a financial goal

If this is the first time you’re thinking about setting up your financial plan, it’s a good idea to start with your financial goals. 

Consider using the SMART method for setting up realistic goals. When defining a goal, remember that SMART stands for Specific, Measurable, Attainable, Relevant, and Timebound. 

It may be difficult to set your goals at first, but a good way to start is to categorize them into 3 groups: short-term, medium-term, and long-term. This is very important, especially when you are making a long-term plan. 

For example,

  • A short-term goal might be saving up for a quick vacation in the next 6 months.
  • Medium-term goals might include saving a 20% deposit for a property, saving for a wedding, or preparing your finances to start a family.
  • A long-term goal might be buying a property investment for a secure financial future.

Buying your first home as part of your financial plan

If you’re planning to buy your first home, here are several things that you should consider in your financial planning. 

Check your credit score

Your credit history and score will help the lender determine the type of borrower you are. Therefore, your chances of getting your loan application approved by a lender increase with your credit score. Borrowers with lower credit scores tend to receive higher interest rates. 

Check your superannuation

Even though you might not have given it much thought, your superannuation can be an exciting aspect to consider while making plans for the upcoming financial year. 

This will come in handy when you purchase your first home, as you can use a portion of your super savings toward your home deposit under the First Home Super Saver Scheme (FHSS). 

Aim to reduce debt

Did you know that debt is one of the largest obstacles to saving money? According to Suncorp’s report, debt is the most common problem faced by Australians.  

The best approach to managing your debt is to make a list of all your current owings, including Afterpay and PayPal, along with the balance due. After that, prioritize your debts and decide which ones to pay off first. Starting with the debts with the greatest interest rates and fees is the best start when paying off your debt (personal loans & credit cards).

Switching from a credit card to a debit card is another option to get out of debt since it encourages you to spend only what you have while avoiding the interest and fees associated with credit cards.

More saving tips are here! 

Adding an investment property to your financial plan

When investing in the property market is a part of your financial plan, it is essential to comprehend the genuine cost of the property. One aspect of the cost of owning an investment property is the interest expense. However, additional costs like rates, maintenance, property management, and strata must also be taken into account.

Understand your current financial situation

Similar to buying any big assets; you need to know how much you can comfortably borrow. That means your first step is a financial health check. You might want to consult a bank or mortgage broker in this step or check the budget balance yourselves.

At St Trinity, we can assist you in deciding which direction you should take based on your borrowing potential, short and long-term property investment goals and how involved you want to be in managing the property.

Understand the benefits you could get by investing in property

INVESTMENT PROPERTY TAX BENEFITS

One benefit of investing in property is that there are several specialized tax deductions you can choose to claim, which include;

  • Fees for repairs and maintenance
  • Interest charges on your home loans; some upfront costs, such as establishment fees, stamp duty, and Lender’s Mortgage Insurance (LMI)
  • Home insurance
  • Strata fees

OTHER BENEFITS

  • Secures an early retirement
  • Supplement your super with property
  • Pay off your mortgage sooner & reduce your debt
  • Have financial freedom by increasing your passive income

The benefits of an investment property far outweigh the costs associated with them, as you’re likely to make a higher return from the investment in the long run.

Map out your investment strategy

Similar to other types of investments, you need to set up a smart strategy from the beginning. This will minimize the risks and help you stick to the plan. 

Don’t know where to start? Our investment property strategy experts are here to help you every step in your property journey!

Now, the last step – Evaluate your financial planning goals

After setting a financial goal, it should always be reviewed. You should make time to reflect on your successes and failures. Consider what is possible and give yourself time to consider why. 

Using this data, you can assess the amount of money spent on achieving those goals and identify gaps in your planning strategy.

By going through these processes, you can determine which goals are realistic and which will take longer to achieve.

The final word

It’s always important to get a good head start, So to start you off on the right track our team is here to help! 

Talk to St Trinity about purchasing an apartment today on (02) 9099 3412, or Enquire below and let us help you make the best decision possible.

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