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EOFY Reset: How to Overhaul your Finances Before FY22

EOFY Reset: How to Overhaul your Finances Before FY22

With the end of financial year just around the corner, a lot of us are now reaching for our “financially savvy hat” and determined to maximise our tax returns. But while you’re busy digging up those old receipts, you may be forgetting about other simple ways to rustle up some extra savings this end of financial year. And the answer could be lying within your insurances and utilities.

The idea of a ‘financial overhaul’ may sound daunting, but we’ve listed a few simple items for you to check off when it comes to insurances and utilities this June that may help you save money down the track.

Consider Health Insurance

Medicare Levy Surcharge

Medicare Levy Surcharge (MLS) is a phrase we hear a lot at this time of year but what does it actually mean? If your taxable income is more than $90,000 a year (or $180,000 for families) and you don’t have private hospital cover then you’ll have to pay a minimum of $900 for the MLS[1]. 

So if you’re earning above the MLS income threshold and don’t have private hospital cover, you won’t be able to avoid the MLS this financial year. However, this June might be the perfect time to consider taking out cover to help reduce the risk of being slapped with extra tax next financial year.

Lifetime Health Cover (LHC) loading

If you don’t have hospital cover by 1st July following your 31st birthday, you’ll pay more for your hospital premiums if you do decide to take it out down the track due to Lifetime Health Cover (LHC) loading[2].

The longer you wait to take out cover, the more expensive it can become. So, if you turned 31 during the past year (or are about to) and don’t have private health insurance, now is the time to think about taking out hospital cover to avoid paying higher premiums later in life.

If you’re a policy holder, the end of financial year is a timely reminder to check you still have a suitable level of cover and are getting good value for money – if not, it’s a great time to shop around as some funds are offering deals and incentives to new customers such as several weeks free and waiving waiting periods.

Check if you can Claim your Income Protection Insurance Premiums

If you have income protection insurance, you may be surprised to know that you could be eligible to claim your premiums at tax time. The ATO states that the amount of tax deduction you can claim may depend upon, your taxable income, your tax rate, your premium price[3].

The tax deduction varies depending on your circumstances but it could mean a reduction compared to the original premium that you paid. Note, your income protection must be separate from your superannuation to make a claim.

Review Your Utilities

It may have been a while since you last reviewed your household bills to make sure you’re still getting a good deal. We get it though, who has the time to sit and compare our deal against a bunch of others!? It can however pay (literally) to shop around on the following bills lying around the house.

Energy Bills

With winter now well and truly upon us, it might be a good idea to check you’re still paying a good price for your energy plan if you want to try to avoid winter energy bill shock. If you’ve been working from home, remember you may be also entitled to claim on your energy bills, the same goes for internet costs.

Broadband

A lot of us are likely to be spending more time at home in the colder months streaming movies and shows or playing games online which can come at an expense. Check your broadband plan still meets your family’s browsing needs.

Home Loan

It’s a good idea to give your home loan a health check at least once a year to make sure the product is still suitable. The end of the financial year could be the perfect time to consider whether negotiating a new rate or switching home loan lenders is right for you.

Car Insurance

Whether you drive a bomb or a sports car, it’s important that you review your car insurance regularly to make sure it still suits your current needs and budget.

Now, that’s a lot to take in and you’re probably thinking it belongs in the ‘too hard basket.’ However, there are comparison services available like iSelect who can help with the legwork by comparing from their range of providers and products and helping you select an option*.

This could leave you more time to get back to more important things like booking in that mid-winter family escape (with the money you may end up saving!).

iSelect Disclaimer:

*iSelect does not compare all products in the market. The availability of products iSelect compare may change from time to time. Not all products made available from iSelect’s providers are compared by iSelect and due to commercial arrangements, area or availability, not all products compared by iSelect will be available to all customers. Some products and special offers may only be available from iSelect’s call centre or website. Click here to view iSelect’s range of providers.

Any advice provided by iSelect on this website is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice iSelect gives you, having regard to your personal situation, before acting on iSelect’s advice or purchasing any policy. You should consider iSelect’s Financial Services Guide which provides information about our services and your rights as a client of iSelect. iSelect receives a commission for each policy sold.


[1] Source: Medicare levy surcharge | Australian Taxation Office (ato.gov.au)

[2] Source: Lifetime health cover | Australian Taxation Office (ato.gov.au)

[3] Source: Income protection insurance | Australian Taxation Office (ato.gov.au)

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