This guide is about you and your money. It’s about putting in place some simple money management strategies that will set you up to succeed financially. We encourage you to use these resources to understand your choices and know where to go to get good information and advice so you can make informed choices.
Being on top of your finances is an important part of reaching your financial and other personal and professional goals. It can also help reduce stress and anxiety, improve relationships and allow you to focus on what’s important to you.
If you apply the same discipline to your finances that you do to your job, you’ll set yourself up financially and give yourself the best chance of living the life you want to live.
Getting on top of your finances doesn’t have to be hard or complicated. This site and the MoneySmart website provide a source of reliable, impartial information, useful tools and other resources to guide you along your path.
No matter what stage of life you are at, setting goals gives you a purpose, something to work towards.
Think about what you want to achieve financially in the short, medium and long term. Write a brief description of these goals and a timeframe for achieving them. The MoneySmart savings goal calculator can help you work out how much you will need to save, over what period of time, to reach each goal.
We recommend you re-assess and update your goals each year.
A budget helps you work out where your money is going, giving you the ability to exercise control and make decisions about how to achieve the goals you set. The budget calculator on this website can help you do this.
When you know what you spend your money on you’ll see how much you have to save towards your goals, or what you could cut down on to achieve what’s really important to you.
Review your budget regularly to ensure you are still on track.
It’s important to keep your debts under control. If you have any high interest debt, such as credit cards or personal loans:
Life doesn’t always go according to plan so it’s a good idea to have cash savings you can draw on in an emergency. Emergency funds could be held in a high-interest savings account or mortgage offset account.
A good rule of thumb is to have around 3-6 months’ worth of living expenses in accessible cash. An easy way to build these savings is to have part of your pay transferred directly into a high-interest savings account.
If you’re serious about saving, it needs to be in a separate bank account.
Comparison websites may help give you an idea of what rates are being offered in the market.
There are ways to legally reduce the tax you pay but be wary of tax avoidance schemes. The Australian Taxation Office (ATO) has guides for ADF members that tell you what income must be declared and what deductions are allowable. Go to the ATO for more information.
You can lodge your tax return for free through myGov by 31 October each year or get an extension through a registered tax agent, accountant or the ATO.
The professional accounting bodies will be able to help you find a suitable accountant if you do not have one already.
Chartered Accountants Australia & New Zealand or phone: 1300 137 322
Certified Practising Accountants (CPA) Australia or phone: 1300 73 73 73
Salary packaging is a way of structuring your income to buy everyday items such as laptops and vehicles, or make additional contribution to your super out of your pre-tax salary. Some items are more cost effective than others and salary packaging does not suit everyone’s circumstances so compare the costs of purchasing the item through a salary sacrifice arrangement carefully.
If you have any questions about your current salary packaging contact:
Superannuation is a compulsory retirement savings initiative for Australian workers. It’s important to understand how your super works, what options you have for managing it and how it fits into your retirement planning. Even if retirement is a long way off, engaging with your super early, could mean you have hundreds of thousands of dollars extra when you eventually stop work.
Deciding whether to make personal contributions and choosing how those contributions are invested are examples of decisions you can make now.
Good financial management includes protecting the things that are most important to you. Make sure your cover for things like your car, home and contents, is up to date and that insured values are current.
Before renewing an insurance policy, shop around to make sure you are still getting value for money. Many insurers will give you a discount if you have more than one policy with them, but you still need to make sure that even with the discount, you are getting a good deal.
When comparing policies, take note of what is and isn’t included, insurance cover is not cheap if it doesn’t cover you for the things you want covered.
You have automatic death and invalidity cover as a member of the ADF either through ADF Cover, MSBS or DFRDB (depending on your membership). For information on your current death and invalidity cover read the guide here or visit the CSC website.
If you decide that you need extra cover you can source it privately. Be aware that most life insurance policies will not cover you for war-like activities.
The Defence Home Ownership Assistance Scheme (DHOAS) is a scheme that helps ADF members own their own home. If you have a period of full-time service greater than 4 years, you may be eligible for assistance through the scheme.
The assistance consists of a subsidy paid directly into your qualifying home loan monthly. The longer your service, the higher your potential subsidy.
It’s still important to compare what DHOAS may offer you and the cost of obtaining a loan outside of the scheme.
All investments carry risk, some more than others. Higher potential rewards usually mean higher risks. You may need to take on some risk in order to achieve long-term goals.
Investments should match your investment timeframe. Income assets are usually better suited to short-term goals. Growth assets are usually better suited to long-term goals.
Scammers have become very sophisticated over the years and unfortunately there is a wide variety of ways you can be scammed. For tips on how to avoid scams, go to MoneySmart or the ACCC’s Scamwatch website.
Having a valid will is the best way to protect your loved ones. We suggest you:
Store a copy of your will in a safe place (DMFS stores wills of permanent members and some reserves) and ensure your executor and next of kin know where it is.
Decide whether you should give someone a power of attorney or revoke an old one.
If you are still in the service and going overseas, Defence Legal can help you prepare a PoA, otherwise seek independent legal advice from an appropriately qualified lawyer.
Please note: Only ever give someone a power of attorney if you completely trust them with your money and property because they will have the power to deal with your property and assets, use it or sell it as if they were you. If in doubt seek legal advice.
There are a number of places you can go to access free, impartial, financial education and information. Start by accessing the information available on this website.