Wednesday 5 July 2006 06 LAWFUEL – With the new financial year upon …

Wednesday 5 July 2006 06 LAWFUEL – With the new financial year upon us, the Australian Securities and Investments Commission (ASIC) is urging people to think about their finances and take a few small steps to improve their financial situation. ‘As of July 1, many people will find they have more money in the hand from cuts in personal income tax rates and the changes to the family tax benefit’, said Ms Delia Rickard, Acting Executive Director of Consumer Protection. ‘ASIC is encouraging consumers to make the most of any tax gains and consider how they can benefit most financially. ‘Putting this extra money, no matter how small the amount, to good use before you’ve spent it can make a big difference to your financial position over the long term. ‘ASIC’s consumer website, FIDO, contains a range of tools and calculators to help you better understand the impact of the financial decisions you make. ‘It really doesn’t take much for your financial position to improve. Here are some options to consider in putting your tax gains to good use’, Ms Rickard said. • Make extra contributions into your super – you can use the money from your tax gains to make extra contributions and boost your super balance. You’re never too young to start saving for your retirement, and doing this now means you won’t miss what you don’t see. You can also make a contribution into your spouse’s superannuation. Depending on your income, you might also receive a government co-contribution. • Combine your super funds – take the opportunity to combine your super from previous jobs into one fund so it can grow without paying multiple fees. Of course, you should first check first that you won’t face large exit fees or lose valuable benefits, such as insurance. ASIC’s super calculator can help you better compare the impact of your choices on your final super benefit. For example, Alex, aged 20 puts just $10 extra per week after tax into super. That adds another $72,000 to Alex’s super by retirement.1 Visit FIDO, ASIC’s website for consumers and investors for financial tips
www.fido.gov.au
• Increase your loan repayments – another good use for any extra cash is to increase your loan repayments, whether it’s your home loan, credit cards or other loans you may have.
1 Assuming Alex earns $50,000pa (ie just less than average weekly earnings), starts with nothing in the account, chooses a growth investment strategy, stays in a lower cost fund and retires at 60. Alex will also be eligible for a government co-contribution.
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and safety checks,
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A small increase in credit card repayments, or an extra repayment a year on your home loan, can save thousands in interest and reduce the term of your loan. Check out FIDO’s credit card calculator which helps you manage your credit cards and other loans. • Start saving now, no matter how little – one of the easiest ways to save is to have the money taken directly out of your pay and paid into a high interest savings account. Use FIDO’s compound interest calculator to see how your savings can grow. • Do your budget – when doing your tax return, spend some time thinking about how much income you received over the year, and whether you are you happy with where that money went. If you’d like more control over your day-to-day finances, do your budget to find where you might have some spare cash. FIDO’s budget planner does the maths for you. • Starting to invest – if you’re thinking of investing during 2006/07, make sure you understand the risks involved in any investment you are considering, what you’re willing to invest and what you’re willing to lose if things go wrong. Check out FIDO’s risk/return calculator to check whether the return you are offered on a particular investment is reasonable. More savings and investment tips are available by visiting FIDO at www.fido.gov.au or calling ASIC’s Infoline on 1300 300 630. You can also get a free copy of ASIC’s Your Money booklet, which is full of practical tips for easing financial strain and making the most of your money. Happy New Financial Year! For further information contact: Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769

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