There are ways to beat the harshest Budget in 17 years. Here are the six powerful but simple ways that will best contain the pain!
A trifecta of new taxes and welfare warfare – that’s what we’ll all have to contend with if Treasurer Joe Hockey gets his way. New debt, doctor and fuel taxes are proposed, and an unprecedented benefits crackdown will see single-income families on $65,000 lose $1700 next tax year and $6000 a year by 2016/17.  Here are the six powerful but simple ways that, with the aid of my tools and calculators, I have determined will best contain the pain.
1. Maximise your moolah now
Do what you can to bring income forward into this better benefits and cheaper tax year. Bonuses, commissions, overtime… get all that you can before the new tax year starts on July 1, to take advantage of the more generous conditions. Also hold off on any deductible expenses (for example, nurses can claim uniforms). These two strategies are gold if they’ll keep you in a lower tax bracket next financial year – so below the taxable income thresholds of $18,201, $37,001, $80,001, or $180,001 (2013/14) – and qualifying for benefits.
2. Clean financial house
Today a re-mortgage frees up $3132 a year for the average Aussie – or $261 a month. These figures assume a $322,900 average mortgage that is refinanced (or renegotiated) from the big bank 5.91% average to the cheapest rate today: 4.54%. This alone could cancel the effect of the new taxes. Sign up for new you-beaut deals on your other financial products too – or get your existing providers to match them – and you’ll pocket a pretty extra penny. Go to www.ratecity.com.au for today’s best deals.
3. Supe up your super
If you or your spouse has earned less than $13,800 this tax year and you make an after-tax super contribution of $3000 for them before June 30, you can earn a tax rebate of up to $540. (Note the dependent spouse tax offset is on the potential chopping block from July 1.) If you are in some kind of employment but are on track to earn less than $48,516 this tax year, make an after-tax super contribution of $1000 by June 30 and you’ll get a super ‘co-contribution’ of up to $500 from the government. Granted this is locked in your super fund until you reach ‘preservation age’ – between 55 and 60 – but extra money is extra money. And remember we women, particularly if we have children, are headed for huge financial disadvantage in retirement if we don’t act.
4. Claim free cash
There’s $19 billion in lost super, bank accounts, insurances and inheritances – from super alone, there’s an estimated $2592 for every Aussie (Westpac figures based on population and total amount of lost super; 47% of Australians are estimated to have a lost account). Check if you’ve lost money at www.ato.gov.au (search for Super Seeker).
5. Get your tax refund in each pay
If you get a tax refund at the end of every year, consider filing a PAYG withholding variation with the Tax Office to take out a lesser amount each pay. Don’t give the government an interest-free loan on top of everything else they’re taking! You can find the form at www.ato.gov.au (it’s a bit of a doozy but could be so worth it).
6. Streamline your spend
No matter how thrifty, we could all cut our costs. Here are some ways you might not have considered:
– Fight fuel hikes: Fill up when it’s cheapest in your area, now typically Thursdays; get your car serviced regularly; keep your tyres pumped up; unload your car after each trip; try not to use the air conditioning unless you are travelling at over 80kms/hr, when the extra drag on your car starts to cost more in fuel.
– Cut grocery costs: Plan your meals for the week so you don’t waste money on expensive perishables and shop late at night when they may be discounted for quick sale; buy a deep freeze and go bulk; avoid supermarket ploys to make you spend more (like multi-buys and targeted loyalty specials); cook recipes from current publications that will use in-season produce; make big curries, casseroles or soups on the weekend and freeze in portion sizes to remove takeaway temptation during the busy week.
– Get free gym membership: The ‘pop-up’ gym phenomenon gripping the UK, where you use your environment to work out (think playground, office, lounge room), makes even better sense in our less-inclement country. Google it and save a fortune.
Nicole Pedersen-McKinnon is the founder of www.themoneymentorway.com and gives regular money advice on Channels 7, 9 and 10. She can also be found on Twitter by searching @NicolePedMcK.
What tips can you add to ‘beat the budget’?
