Positive goal setting for the new financial year
The COVID-19 pandemic left many Australians in a tricky financial position. Millions of people watched their livelihoods crumple, finances get seriously stretched, relationships change, and spending habits shift dramatically as the economy took the full force of the pandemic. However, as we turn the corner on the new financial year, there is some good news. The Australian economy is recovering, with 3.1% growth reported in the December quarter.
If your finances, job, living situation or relationship took a bit of a hit during the pandemic, don’t stress because a bit of planning can help get you back on track and feeling more confident. The new financial year can be a great time to reassess your circumstances, whether it’s your living situation, budget or overall goals.
Here are some ideas that might help you to get different areas of your life back on track. Remember to do your own research before you embark on creating any financial, health or living-situation plans, and to speak to relevant professionals about your situation before making any decisions.
Here are a few thought-starters to get you going.
Setting health and fitness goals
During the height of the COVID-19 pandemic in Australia, many of us spent much more time at home – working from home, schooling from home and Zoom calls instead of face-to-face time, but what impact did this have on our health?
Health.gov.au released some guidelines and tips on the benefits of keeping fit while COVID restrictions were in place. Regular exercise was suggested to keep mental health in check, your weight under control and as a way to help alleviate stress and anxiety. If your health has slipped as a result of the pandemic or you’re suffering from additional stress, there are websites that provide some great tips on things you can do to get yourself back on track. It might be something as simple as investing in some free weights so you can exercise while at home, or caring for your mental health by setting small, achievable goals.
Setting relationship and family goals
Many couples reported relationship stress (and even relationship breakdowns) during the pandemic lockdowns. In fact, the ABS even did a special report on relationships during COVID -19. Back in March 2020, the government announced a safety net package of $1.1 billion to expand mental health and Telehealth services, as well as increasing domestic violence services as a response to relationship stress.
While you’re setting goals for the new financial year it may be worthwhile looking at your life holistically, including your relationships and how they might affect your general wellbeing and happiness. Consider setting small goals like improving communication in your family, spending more time on your mental health or committing to calling your family members more frequently. The CDC has a mini site where you can find tips on healthy ways to cope with stress. You’ll also find tips for dealing with grief and assisting children and teens.
Consider doing a deep-dive into your finances and aim to make improvements
Even if you had a budget before, you may wish to think about creating a new post-COVID-19 budget – especially if your financial position has changed. There are a few tips you can employ to make a start on understanding how you might improve your budgeting, and it’s important to get advice from a professional before you make any decisions that could impact you and your family.
For example, some of your expenses may have changed as a result of COVID-19. The NSW Government has announced additional funding for preschool in 2021, which is saving some families over $2,000 per child. If you are eligible for this, you might want to factor in how this impacts your planning for the financial year ahead.
Other expenses to put on your radar might include mortgage payments or rent, groceries, utility bills, insurance, transport, childcare, and credit cards or personal debts.
Once there is a clear view of outgoing expenses, look at where you might be able to cut back. You could consider setting new limits for daily living expenses that are realistic to stick to in your present circumstances.
Moneysmart has a great resource available on budget setting, but your accountant or financial adviser can also help you with the basics. If you’re already speaking with them around tax time, prepare any questions you may have and ask for their advice.
If you struggle with sticking to a budget, consider supporting your efforts with a budget app.
Consider the impact of additional payments you may have received
You may have received JobKeeper or JobSeeker payments during the pandemic, and these will need to be automatically included in your return as salary, wages or an allowance. If you’ve been working from home more as a result of COVID-19, the ATO’s temporary ‘short-cut’ method of working out expenses has also been extended until 30 June 2021. This means you have more time and capability to work with your tax professional to make sure that you claim everything you are eligible for.
Consider building an emergency fund
If a global pandemic has taught us anything, it’s that having a financial safety net can be extremely helpful in uncertain times – and there’s never a better time to start preparing for unexpected curve balls.
MoneySmart suggests that an emergency fund should contain at least three months’ worth of expenses – and Moneysmart suggests that one way to start saving a financial buffer is in a high-interest savings account, that’s separate from any daily use accounts so that it can’t be easily dipped into for daily expenses. There are many other money-saving methods to consider as well.
For example, an automatic transfer could be set up to go directly into an emergency fund so that it’s growing slowly and there for when it’s needed. Any extra cash may also get deposited into your emergency fund in order for it to grow more quickly.
Consider securing your financial documents
Good financial literacy might also include being organised – you’ll be glad you can easily get your hands on all your important documents in case of an emergency.
One idea is to have a secure, locked filing cabinet to store key documents such as insurance policies, tax returns, super statements, credit card statements and receipts. Another way would be to invest in a fireproof safe to store hard-to-replace documents such as a will.
Or even to double up and scan important documents to keep on a secure portable hard drive – or a digital filing system with strong, encrypted passwords and 2FA for added security.
Understanding where your documents are and keeping them secure can ensure availability of these items when you need them –it may even be worth leaving access details with a solicitor or person you trust. This way, your family members or trusted contacts know who to contact about your personal affairs if something was to go wrong. There are even government services such as NSW Gov Wills in NSW which allow you to store your will and other important documents (a fee may apply). Search “secure document storage” and your state or territory to see what options are available for you.
Get some direction!
COVID-19 may have thrown parts of your life into a spin, but the sooner you start taking control and setting personal and other goals, the more likely you’ll be able to carve out a secure and happy future. Consider the benefits of goal setting and planning around the start of the financial year and set yourself up for success in FY22!
16 Jun 2021