15 Mar Managing Your Finances After Uni And In The New Year
Earning a salary and managing your personal finances can be slightly overwhelming for some newly minted uni graduates. Finding your first job in the employment market, negotiating your wages and planning for your future wealth are all areas that can seem intimidating in the New Year.
If you decide to start your own small business, instead of looking for a job with an existing company, this stress is simply amplified. Now you need to deal with budgeting and cash flows, as well as accounting, wages for employees, taxes, GST, paying suppliers and a host of other finances and planning issues.
Regardless of your job and whether you now earn a salary by working for someone else or you have sidestepped the employment market by starting your own small business, planning for your future wealth is vital to your ongoing financial security. So let’s take a look at some of the financial options that are available to you now that you are earning a decent salary.
Paying off your HECS
Unless your annual salary is more than the $54,869 threshold, you won’t need to repay this debt. Once you reach this threshold however, you will automatically start to repay this debt. The repayments start at 4.0% of your income above the initial threshold, rising to 8.0% if you earn $101,900 or above. You will need to include these repayments in your financial planning, but only when the automatic payments commence.
Even if you are running a small business, you still need to put aside some of your wages for a rainy day. Having access to cash is important and gives you greater flexibility than having to borrow money for unexpected expenses, travel or a new car for example. Try to save at least 10% of your net salary every month, as this is a great way to start building wealth for your future.
Another option for your finances in the New Year is to invest in the share market. You can do this yourself by using an online broker or by regularly investing part of your monthly salary in a managed fund. Share markets go up and down, but they are generally a safe bet over the long term and can help you to build even more wealth for your future.
Yet another option is to purchase a property, whether for yourself or as an investment. As your primary residence, you will benefit from capital gains over time and as an investment, you may benefit from a number of tax incentives. This might be something to consider in a few years, as you might be better focusing on saving part of your personal salary, before entering into the real estate market.
It is always advisable to consult an accounting firm when your taxes are due each year. This ensures that you receive as large a tax return as possible. This is important if you are earning a salary, but it is vital if you own your own small business. As a business owner, you will need to have a thorough understanding of your personal and business finances, and an accounting company will keep you on track each quarter.
Building wealth for your future and planning your personal finances are essential parts of entering the employment market and earning your first salary. You can make this transition easier if you consult a financial planner who can advise you of the best strategies to build your wealth.
If you are also a new small business owner, all of the above are still true, but now you will benefit from an accounting firm who can help you with budgeting, bookkeeping, cash flow forecasting, strategic planning and even business start-ups.
For help with your personal finances in the New Year or with small business planning, call Conrad Carlile on 07 3871 1522 or complete our online enquiry form.