Financial New Year’s resolutions: New year, new super saving strategy

07 January 2021

Before we consign 2020 to being nothing more than a memory whilst opening the door to 2021, it’s time to turn our attention to a time-honoured tradition: The New Year’s resolution. Whether you’re committed to being more sustainable in the future or you’d like to cultivate a new hobby, think about also making a financial New Year’s resolution.


Not only is it a sound fiscal plan to be thinking ahead now, but it will also save you from scrambling to make additional concessional contributions before the end of the financial year (EOFY) on 30 June.

Sure, it may seem like a more subdued journey of self-improvement than starting up a home composting operation or kickstarting your high-endurance fitness routine, but it’s just as crucial to preparing for the future, and the advantages are likely to accumulate for years to come.

It’s time to count down to your new super saving strategy!

As the sands of 2020 wash away, get ready for a better super saving strategy in 2021.

Make a budget to maximise your savings

Saving more in 2021 may be possible if you follow these simple steps.

Assess your income

Too many people lock themselves into a saving and spending strategy without paying attention to how their income may fluctuate over time. Granted, 2020 was, in many ways, a more challenging year than most. Still, if your income rose at all during this time, you may be able to save more now than you had been previously.

This could also be the case if you or other members of your household, such as your spouse, experienced any temporary employment difficulties that have since been rectified. For example, you may have decreased your salary sacrificing amount to compensate for handling a greater proportion of the monthly expenses whilst your spouse was in between jobs. If they have gone back to work, have you re-established your concessional contributions? If not, it might be time to readjust.

Monitor your spending

Do you really know how much you spend and where your money goes? For many people, the honest answer is no.

Tally up your average monthly fees and bills to determine which expenses might be non-negotiable. Then, take a look at the gap between your monthly income and these necessary expenditures. Here’s where you’re likely to have the greatest amount of flexibility.

Review your bank statements or other records to determine where the rest of your money went.

Plan for super savings

Sure, you can wait until EOFY to make your concessional contributions, but why would you? Fixing your budget to incorporate regular contributions throughout the year has two main benefits:

  • First of all, it eliminates any need for a last-minute rush to connect with your super fund during a busy and hectic time.
  • Secondly, if you save throughout the year, you’re able to work towards your goal at a steady pace instead of simply hoping that you wind up with a little extra money as July approaches. If that’s your strategy, it can look more tempting to splurge on unnecessary expenses throughout the year, leaving you with little left over to save for your future.

Making small changes to your monthly budget now can have a big impact on your super savings over time.

Simple strategies for increasing your concessional contributions

The yearly cap for general concessional contributions is set at $25,000. To make sure that you actually contribute as much to your super as you’re able, there are some straightforward techniques you can employ.

Focus on lowering recurring spending

Adjusting your budget to reduce discretionary spending — like ordering takeaway every day of the week — is a good first step, but you may be able to lower your standing monthly expenses, too.

For example, take a look at your subscriptions. Many Australians signed up for additional streaming services this year. In fact, according to data from Roy Morgan, there were more than 878,000 subscriptions initiated in the country over just three months this year. If you signed up for Stan, and you already had Netflix, do you still use both? Do you have multiple streaming subscriptions for the same service in one household? Maybe you could consolidate with a family plan.

Another opportunity for trimming recurring expenses is to look closely at your transport situation going into 2021. If you’re a two-car household, scaling back to one vehicle could save you money while also benefiting the planet.

Funnel your savings straight into salary sacrificing

Once you’ve uncovered potential monthly savings, transfer them straight into your super. Your salary sacrificing amount doesn’t have to be enormous to be meaningful. In fact, according to the most recent weekly earnings report available from the Australian Bureau of Statistics, in May 2020, the average adult who was employed full time sacrificed $48.30 that month.

By increasing your salary sacrifice amount as you reduce your monthly spending, you’ll start saving before you even have a chance to miss the extra cash. If you have the newfound money on hand, you might be tempted to think of a variety of frivolous things you could spend it on.

Start your financial New Year’s resolution with Local Government Super

At LGS, we’re ready to do the math and figure out how making small, regular changes to your super contributions can produce a big change over the long term. This is especially true if you start saving early, since compounding interest can have a more pronounced impact given a greater time span. Check out our calculator to start crunching the numbers today, or you can also speak to one of our financial planners.

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The information on this website is of a general nature only and does not take into account your personal objectives, situation or needs. You should consider obtaining professional financial, taxation and or legal advice tailored to your personal circumstances prior to making any financial decision.