Tax yourself!

At this time of year, everyone is talking about, or thinking about tax. So I thought I’d write about it. But, before you roll your eyes … this is not an article about your obligations to the Australian Tax Office – it’s an innovative savings strategy.

By Julie Nipperess

Woman using a calculator for computing her billing

Are you sitting at home with a calculator, working out what you owe to the ATO this year? Or alternatively, dreaming perhaps, of a nice fat refund?

Most people are. The Financial Year has ended and the new one has well and truly begun, and it’s usually around this time that personal finances come into the spotlight.

It’s a really good time to consider your budget, and your financial goals for both the short and long term.

So let me ask you while we’re on the subject of tax… have you ever thought about ‘taxing yourself’?

I’m serious. It can be a great way to save money, and if you ‘tax yourself’ every time your salary hits your bank account, you won’t even notice!

Woman withdrawing money form the machine

In case of emergency, break into your savings

If the year 2020 and the chaos caused by the coronavirus has taught us anything, it’s the value of having a little money tucked away in case of emergencies.

And the perfect way to make sure you do put money away is to set up a transfer into a separate account – the same day your pay hits your bank.

Another way to look at this is to ‘pay yourself’ first. Then it’s done. And the money starts to accumulate. After you’ve paid yourself, then you pay your bills and living expenses, and what’s left over is spending money.

Woman looking at a list with a laptop beside

Attention sole traders and business owners!

This is a great strategy for anyone wanting to save. But it’s particularly important for sole traders, or small business owners who can often make the mistake of mixing their personal and business finances.

As most business owners know – a business will take all the resources you have – whether time, effort or money. And while the business might also make a nice regular profit, and deliver an income, it is important not to overlook the practice of saving. For times like now.

Old man looking at his planner and a piece of paper with Time for taxes written on it

The impact of Covid-19

None of us is immune from Covid-19 – and I mean both the health impact and the financial impact. Unemployment is continuing to rise as businesses struggle, despite JobKeeper.

The future is still uncertain. Australia will recover in time, but there’s a lot to suggest that the way we work, live and play will have changed when we eventually emerge from the pandemic and resulting recession.

Man saving coins in the bottle while writing

Life is unpredictable

Covid-19 has definitely shown us that circumstances can change – in an instant. Life is unpredictable. It’s impossible to know what the future holds. That’s why it’s so important to be financially prepared.

Being financially prepared essentially means two things:
1. To have a ‘rainy day’ or emergency savings fund, and
2. To have adequate insurance in place to protect your assets, your income and your health.

Happy woman using her laptop

Start saving as soon as you can

Most financial professionals agree that your emergency fund should ideally have enough funds to cover you for three months of no income. And for sure, that will take some time to save, but there’s no better time to start than … as soon as possible! Just put a little away each payday and over time, the balance will grow.

Saving takes discipline, but it really is worth it. Many people around the nation are relying on JobKeeper and JobSeeker right now, and while these have been a lifeline, they’re not overwhelmingly generous. Nor are they meant to be.

But people who don’t have savings they can fall back onto may very well end up in debt as a result of coronavirus, because they will need to resort to options like taking out overdrafts, or personal loans, or loading up credit cards to make ends meet. And that’s a situation I don’t wish on anyone because when you’re already financially strapped, debt simply compounds the problem.

Some people may have accessed their super too, which might offer an immediate buffer, but will affect them long-term.

If we can help you with any aspect of your finances right now, whether it’s budgeting for a lower income, or starting a savings plan, or understanding what your investments are doing, talk to us. We’re here to help.


This is general advice and should not be treated as personal advice.
Julie Nipperess is an authorised representative of Step Up Financial Group Pty Ltd ASFL No: 512509.

Need more information? Get in touch with Step Up Financial

    • 107 Moulder Street,
      Orange, NSW 2800

      PO Box 2499
      Orange, NSW 2800

    • (02) 6362 5445