7 Resolutions For Financial Success in 2021

Table of Contents
    Add a header to begin generating the table of contents

    Officially the year 2021! We're confident that many of you are eagerly anticipating a new year brimming with limitless opportunities after the year. You may have started thinking about your goals for 2021 at the beginning of the year, particularly those that pertain to improving your financial situation. You could even be determined to figure out how to make your New Year's resolutions a reality.

    Of course, you've been in this situation before. You begin the year with the greatest financial intentions, whether to organise your finances, start investing, or finally save enough money for a down payment on a home. But life always manages to get in the way of your well-intentioned objective.

    How precisely can you ensure that 2021 will be different, then?

    The solution is straightforward: combine your goals with a thorough financial plan that takes into account every aspect of your financial life before spelling out exactly how to attain your goals. You won't ever have to question whether a financial decision is appropriate if you have a financial plan and access to professional counsel. Consider it as having a personal mentor to assist you in achieving your New Year's resolutions for this year and each year moving forward.

    Here are just a few places where you could benefit from having a financial plan as guidance:

    Grow Your Wealth

    Most people's top priorities for their New Year's resolutions will probably be savings-related goals of some form. Everyone wants to do more with their money, whether it be something straightforward like increasing your savings or something more involved like thinking about investing. Even with the best of intentions, as the year goes on, it becomes more and harder to accomplish this aim.

    Who can blame you for periodically withdrawing money from your savings account when so many unforeseen expenses could occur throughout the year?

    Despite your best intentions, going over budget here or depleting your savings account there will really do more harm than good to your financial objectives. Your savings account was established with a specific objective in mind, and the only way to attain that goal is to support your savings account as it continues to grow.

    There are a few ways you can do this

    The first step is to sit down and create specific, achievable financial goals. Keeping these objectives in mind when you are tempted to withdraw from your savings account will help you resist the urge. If you frequently let attraction win, you can also think about establishing a forced savings account. You might also consider investing if you want to go further with your financial objectives. Investments are crucial to increasing wealth and realising your ideal financial future.

    It might be time to consult an investing expert about whether any funds you now have sitting in cash could be used more effectively now that interest rates are at an all-time low in Australia.

    Consider Rent Vs. Home Ownership

    Unexpectedly, housing has a significant impact on your financial situation. Given this, it is understandable that you might spend a lot of time and effort contemplating your current living circumstances. There's probably something you'd like to change in 2021, whether you're renting or paying off a mortgage at the moment.

    Renters have until 2021 to decide whether they want to stay in their current rental arrangement going forwards. Consider comparing the cost of renting to the payments on a mortgage now if, like many average families, you dream of buying your own house. In light of your present financial situation, you can also consider whether applying for a home loan is the correct course of action.

    Australia's RBA lowered interest rates in 2020, resulting in super-low interest rate mortgages that were passed on to consumers. Many people were finally able to move from renting to buying a home as a result of this. You might make the decision to do the same in 2021.

    Making the most of your mortgage should be your top priority in 2021, especially if you're a homeowner. You might be thinking, "Debt is debt," and we understand. But there are several ways you may organise your home loan debt to benefit from various tactics, like debt recycling, to ensure you're repaying your loan while also spending every spare dollar to increase your wealth.

    In order to take advantage of the RBA's interest rate reductions, you might also talk to your bank or financial advisor about restructuring your current house loan. By doing this, you could be able to save money that you could use to further your other financial objectives.

    Make 2021 the year that you convert your bad debt into good debt, which actively contributes to the achievement of your financial objectives.

    Cut Down On Expenses

    2021 is a great chance to get a complete picture of all of your spending, whether it's that expensive gym membership you didn't have time to utilise or too many Netflix accounts in your home. You still have a magazine subscription but haven't opened it in months.

    Or do you spend a lot of money on various music streaming services even though you only utilise one? You'll be far more able to avoid those hidden charges that previously escaped your attention by sitting down to figure out exactly what expenses your hard-earned money is going towards.

    It's time to move forward and pick what you can afford to cut back on to help you develop your wealth in the upcoming year after a complete understanding of your costs and financial situation. Uncertain about where to begin?

    A financial plan can be useful because it acts as a personalised road map that outlines a workable strategy for achieving your short-, medium-, and long-term financial objectives. This implies that you'll have a useful manual to give you confidence in any expense-related decision you make.

    Sort Your Super

    You're probably thinking that making a New Year's resolution around superannuation is unusual.

    However, it is one of the most crucial investments you could ever make, as 2020 may have emphasised for some of you who relied on your super balance to get you through hard times and is frequently forgotten in the bustling pace of life. Not certain of the technicalities of your super account or simply curious as to whether you could accomplish more? Make 2021 the year that you organise your super.

    When it comes to their super, many regular families frequently commit the following mistakes:

    • They might not be aware of leaving their super in an underperforming fund since they have many super accounts and are not paying attention.
    • Remaining a client of a fund that levies exorbitant fees
    • Not making sure their insurance covers their current situation

    Fortunately, all of these errors are simply fixable with a little bit of care and love. You can determine whether your super is performing well or if it would be time to consider switching to another fund by carefully examining your existing super fees and performance before comparing them to other funds.

    Or, 2021 is the ideal year to get assistance from a qualified super advisor if you want to ensure that your super is optimised for your unique financial position but lack the time.

    Whatever your objective, simply keep in mind that you must move to make the most of this crucial investment.

    Get Practical About Retirement

    Many people still view retirement as a kind of ethereal ideal that they'll ultimately reach. Retirement isn't dubbed the "golden years" for nothing, whether it is travelling to a different exotic site every month or simply escaping from the daily grind to spend more time with the people and things you love.

    However, the reality is that retirement demands careful planning and structuring if you want to be able to make your ambitions a reality in the future.

    Perhaps you've been saving money for retirement without truly understanding if it would be enough to sustain the manner of life you wish to lead when you retire. Or perhaps you truly believe that your superannuation income will support you throughout your entire retirement. But as costs grow and life expectancy increases, you start to question if you're doing enough.

    Determining how to reach your ideal retirement can be overwhelming if you don't have the right help and direction. Because of this, the beginning of a new year is a great chance to get assistance with creating a retirement plan.

    You'll be able to understand precisely what steps you'll need to take to move from where you are now to where you want to be with a retirement plan in place.

    Simply said, if you have a customised retirement plan for you, you won't ever have to question if you're contributing enough. And to us, that sounds like the ideal resolve for the new year.

    Secure Your Financial Future

    In 2020, a lot of people's financial plans were disturbed, and for some, their financial futures were totally altered.

    This further illustrated the need of financial security for the mental and emotional well of your family.

    What would happen if you or your partner suddenly lost your salary? What would happen if one of your loved ones was ill or hurt? What would that mean for the security and comfort of your family?

    If you consider any of these difficulties, the year 2021 might be the ideal moment to make sure you and your family are prepared for anything life throws at you. In the worst-case situation, personal insurance can assist protect your family's financial future.

    With so many personal insurance options to choose from, you can rest easy knowing that you and your family will be covered at every stage of your life journey. These options can be tailored to your unique financial situation.

    If you have a personal insurance policy in place, you'll be able to ring in 2021 knowing that you and your family are prepared to face whatever the future offers.

    Turn Ideas Into Action

    Making resolutions for the new year might be exciting, but it's easy to lose focus and fail to plan out exactly how you'll keep them. Setting goals is crucial, but you won't get very far without a solid financial plan explaining how to achieve them.

    The greatest strategy for ensuring you're on track to achieve your financial goals in the future is combining a comprehensive financial plan with professional counsel. With a team of competent financial counsellors at your disposal, you'll always be on track to accomplish your 2021 resolutions and those of every year after.

    Do you want to discover what is the best?

    All you have to do to get started is contact a financial advisor today.

    Your Complete Financial Guide to Redundancy

    Being laid off or living in constant worry of a lack of available workers can be extremely stressful situations.

    As a result of the loss of your job or the likelihood that you will lose your job, you may find that you are suddenly confronted with worries about how the change in your financial status will affect you, stress about the process of looking for a new job, or even doubts about whether you should continue working.

    The term "redundancy" refers to a type of dismissal that is initiated by the employer and is synonymous with "the termination of employment," as stated by HR Advance. It gives the impression that the employee did not have a choice in the matter of whether or not their job will be terminated. In contrast to dismissals based on fault, such as being fired, redundancy is typically the result of reasons outside of the organisation, such as changes in the economy, improvements in business efficiency, or developments in technology.

    In other words, there are a variety of potential causes for you to be experiencing redundancy, the majority of which are completely outside your ability to influence.

    On the other hand, here at Klear Pictures, we are aware of how upsetting and personal the experience of being laid off can be. It's easy to get overwhelmed when you start to think about how being laid off may affect your capacity to maintain your current standard of living, but it's important to try to be positive.

    Because of this, we simply wanted to point out the need of taking a moment to calm down and inhale deeply before proceeding.

    You don't have to take on the difficulty of this endeavour by yourself if you don't want to.

    We are here to assist you in regaining control of your financial situation so that you may go with your life.

    Because of this, we have made the decision to offer this advise on what to do if you have recently lost your job or if you anticipate losing your job in the near future. This guide covers the following subjects, and it includes recommendations from our illustrious staff of financial advisors:

    • What happens when you lose your job
    • How to figure out your severance pay
    • Redundancy's influence on taxation
    • An eight-step strategy of action to prevent layoffs

    You do not have to surrender your dreams of reaching success and securing your financial future simply because you are afraid of losing your job. This guidebook is the greatest location to begin regaining the route to the prosperous financial future you deserve because it contains all the information you need.

    Alternately, if you require guidance about redundancy and ongoing financial support that is specifically targeted to your financial circumstances, our team of expert financial advisors is available to help. They can provide you with advice that is specifically adapted to your financial situation.

    What happens if I am laid off?

    A legal redundancy is the only type of redundancy that is allowed to take place when your organisation no longer needs someone to do the duties that you are now responsible for. This type of redundancy is frequently referred to as a "genuine" redundancy. As we have established, this may occur for a variety of reasons, the vast majority of which are not personal. Some examples of these causes include a change in the direction that the company is heading, unfavourable external economic conditions, or even the insolvency of the company itself. Because the function you provide is no longer required, there is no longer any requirement for you to be a part of this organisation.

    It's also possible that your employer will decide to split up your function's tasks and hand them off to other employees, which will result in redundancies.

    calculator-pen-bill

    Remember that the reason you were fired has nothing to do with how well you performed on the job, and that fact alone should not make you feel less qualified to carry out the responsibilities associated with your position.

    If you believe that you were wrongfully fired while being told that you were being made redundant, which may have happened if the position you previously held at your place of employment is still open, the website for Fair Work contains additional information on the remedies that are available to you in this situation.

    After discussing the likely causes of redundancy, the next step is to investigate the benefits that your company is required to provide you with in the event that you are terminated from your position.

    The National Employment Standards (NES) mandate your employer to make the following minimum payments if you are laid off:

    • For any unused annual leave you may still have
    • The length of service and pay for the notice period, which can last between one and five weeks, are determined by your age.
    • The real redundancy may be worth up to 16 weeks of salary, depending on how long you had previously held your position.

    It is important to note that whether or not you are entitled for redundancy pay depends on the nature of your previous employment as well as the amount of time you spent working for the company in question.

    Redundancy pay is not available to the following people:

    • Employees who haven't been with their current workplace for more than a year
    • Temporary workers were typically employed for a certain activity, project, or season of the year.
    • Casual employees
    • Apprentices
    • Significantly misbehaving employees were fired.
    • Training contract term is the only time that trainees are engaged.
    • Due to the typical and anticipated turnover of labour, several employees were let go.

    How are my redundancy benefits determined?

    If you were actually let off the hook, the company that you work for could be able to compensate you in a variety of various ways.

    In spite of the fact that there are numerous components to a redundancy-related compensation, the payments are often broken down as follows:

    • A "real redundancy" payment is exempt from taxes up to a certain sum, which is established by the total period of time that you were employed by your previous company. At the conclusion of your employment, this will be reflected as a one-time payment in the form of a lump amount on your income statement or PAYG payment summary.
    • If termination of employment payment (ETP) exceeds your tax-free allowance, it will only be partially taxed.
    • Any additional money received from your employer in the form of residual payments will be taxed at your usual marginal rate.

    People who are younger than the preservation age will be the only ones eligible to receive the portion of their redundancy payout that is exempt from taxes. Because you do not qualify for a "genuine redundancy payment," your whole payout will be treated as an ETP and subject to lower taxes if you are 65 or older. This is due to the fact that you will not get a "real redundancy payment."

    A redundancy calculator is now available on the Fair Work website, and it is possible that you will find it helpful if you wish to learn more about the potential pay-out from your redundancy.

    Instead, our skilled group of financial advisors specialises in assisting customers who have been laid off in determining how much of a settlement they will likely receive and how they may use that amount to pave the way for a more prosperous future financially.

    Tax Implications

    Your redundancy payment, like many other elements of your financial life, is subject to several tax restrictions. As a result, estimating how much money you will actually receive may be more difficult than it seems at first glance because of these limits.

    Your "genuine redundancy" payment is exempt from taxes up to a specific point; but, after that point, it will be taxed based on two amounts: a baseline sum, and an annual sum for each year of service after that point.

    Because these two components are changed on an annual basis, they are consistently going through modifications. The base pay for the academic year 2019–2020 is $10,638, whilst the annual service compensation is $5,320. If you were let off after working for an employer for ten years and the year ended on June 30, 2020, your taxable income would be $63,838 (which is equal to $10,638 plus [5,320 x 10]) because of this.

    After you have achieved this amount, any more money that you have will be added to your ETP and taxed at the rate that applies to your marginal income the rest of the time. In a similar vein, any unused annual leave and long service leave that you were awarded as a result of your layoff will be taxed to you at a reduced rate of up to 32 percent. This will be the case even if the leave was granted to you after your layoff.

    It is regrettable that you may only take your ETP as a lump payment and that you cannot roll it into super, especially for those of you who might be considering doing so in order to avoid these tax effects. You have the option of contributing the entirety or a portion of your ETP towards your retirement savings as a post-tax or non-concessional payment. If you wish to understand your superannuation contribution cap limit and how making these contributions may effect your entire retirement plan, be sure to get the guidance of a financial professional before making any contributions.

    Steps to Financial Success
    1. Establish goals.
    2. Take stock of your current financial situation.
    3. Create a spending and savings plan.
    4. Establish an emergency savings fund.
    5. Invest diversely.
    6. Make sure you're covered.
    7. Establish a good credit history.
    8. Delete your debt.
    Define. Gather. Analyse. Develop. Implement.
    1. Step 1 - Defining and agreeing your financial objectives and goals. ...
    2. Step 2 – Gathering your financial and personal information. ...
    3. Step 3 – Analysing your financial and personal information. ...
    4. Step 4 – Development and presentation of the financial plan.

    Financial success looks a lot like financial wellness in 2020. Not being stressed about finances, having enough money set aside for unexpected expenses and being able to retire when you want to are key indicators of financial wellness, financial preparedness and now, financial success.

    Scroll to Top