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Sensible Money Savers

  • Amanda Varidel
  • Feb 23, 2015
  • 2 min read

If $1000 fell into your lap tomorrow, what would be the most sensible thing to do with it?


Here are our suggestions:


1. Pay off your credit card


If you’ve got $1000 to spare, and you’ve racked up debts on your credit cards, what are you waiting for? Pay that thing off quick-sticks before your original purchases double, or even triple in price.


2. Prepay some bills

Considering using the $1000 to prepay some bills. While it may sound a little odd, utility companies often offer decent discounts for paying bills well in advance. For example, a five per cent discount for paying two weeks early would otherwise take about 15 months or more to earn equivalent interest in the bank. Bank interest would also be subject to income tax and by pre-paying, you avoid expensive penalty fees for late payment.


3. Don’t earn much?

If you’re a low-income earner and have a spouse (or de facto), you are eligible to get a spouse super contribution offset of 18% if you make a contribution on their behalf to a complying super fund or retirement savings account. If you contributed $1000, this could offer a direct income tax saving of $180.


4. Peer into the future

For longer-term investors, especially higher-income earners, suggests giving Investment Life Bonds a thought. Withdrawals are free of capital gains tax after 10 years, they are a particularly good way for parents to save for their young child’s education.


5. Boost your retirement savings

It might be a way off yet, but an after-tax contribution of $1000 to your super could net you a government co-contribution of up to $500. Your income level will play a part in the kind of benefit you’ll receive.


6. Stop wasting energy dollars

Mr Miller also recommends organising an energy audit of your home, to find out “where you can make changes today that will drop your energy bills today, tomorrow and long into the future”. Good idea.


7. Get yourself a coffee machine

It might be a bit of a luxury purchase, but if you’re a three-plus-cups-a-day kind of person, and won’t consider instant as an option, then a coffee machine might be worth the investment. Pod machines will drop the cost of a cup of coffee from around $4 to under $1, so even if you’re only on two cups a day you’re going to easily save $2k a year.

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Stu Varidel AR 324007 and Your Choice Financial Planning Pty Ltd ABN 80124246877 trading as Heart Financial Advisers CAR 323623 are authorised representatives of Sentry Financial Services Pty Ltd ABN 30 113 531 034 & AFSL 286786.

Warning The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Heart Financial Advisers and Heart Mortgage Services nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.

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