Whether you’re curious about how superannuation works or figuring out how to start saving, the truth is that financial wellness isn’t always intuitive. The more you know, the easier your relationship with money will be. CommBank personal finance expert Jess Irvine helps with straightforward answers to common questions.
Do I need super (and how do I choose a fund)?
Employers are required by law to put 11.5 per cent (in FY24/25) of your ordinary time earnings (in most cases your base salary) straight into a special account overseen by a super fund. You get to choose which fund looks after your money as well as how that money is invested. Jump on the federal government’s YourSuper website and look for a low-fee, well-performing fund.
Is buy now, pay later bad?
“Buy now, pay later” products are a relatively new invention, allowing you to purchase upfront and pay in instalments. It’s true that you don’t pay interest but be wary of fees you may incur if you struggle to keep up with your repayments. Think really hard about whether you can truly afford what you’re buying and consider saving up for what you need instead.
Should I get my own private health insurance once I age out of Mum and Dad’s?
If you’re single and your taxable income for FY24/25 is more than $93,000 and you don’t take out an appropriate level of private patient hospital cover, you’ll be charged the Medicare levy surcharge after you lodge your tax return. If you earn less, consider what a private policy would get you above what’s freely available. Also, be aware that after the age of 31, if you don’t take out and maintain an eligible policy, you will be charged an extra amount on your coverage if you later decide to take it out. Search “lifetime health cover loading” to learn more.
I’m spending everything I earn—how do I even start saving?
Don’t think of restraining your spending as going without. Think of it as purchasing back a bit of your future time and energy. This means you won’t have to work to pay for things you want and need, because you saved money when you were younger and let the magic of compounding returns—when your money makes money—do a lot of the heavy lifting for you.
Should I invest or save the little extra I can set aside?
Investing can be a way to grow your money over time but it’s best undertaken with a long-term mindset, to ensure you can ride out potential volatility in returns from year to year. Before you invest, think about whether you have any high interest debts you could pay off first. Do you have a savings buffer for emergencies? Are you saving for something, such as a holiday or home deposit, that means you might need your money back soon? If so, consider whether a high-interest savings account may be more suitable.
How do I balance saving for travel with other financial goals?
It’s okay to spend money on experiences that bring you joy and expand your mind. In my experience, travel is even more fun when you have time to anticipate your upcoming trip. So start planning early—not only will you likely score better deals on flights and bookings, you’ll also gain the satisfaction that you’ve saved hard to enjoy your experience. Bon voyage!
“Don’t think of restraining your spending as going without. Think of it as purchasing back a bit of your future time and energy.”
How do I reduce my everyday costs?
The cost of living is making it harder for many Aussies to save, particularly those who also face the challenge of a tough rental market. Start keeping a money diary to find out where your big costs are. The Money Plan section of the CommBank app offers insights into your spending. Cut back on your usage where possible, always shop around for the best price on new products, wait for sales periods and take advantage of cashback offers, such as CommBank Yello offers available to eligible customers. Just tap CBA Yello in the CommBank app to find out more.
What do you wish you’d known when you were younger?
I wish I had known not to wait until you’re in a relationship to start investing and planning for your financial future. Be independent and know that it’s never too early (or too late) to start saving and investing to grow your wealth. I often think that if I had listened to my own advice about saving at a much younger age, I could be retired by now. In the long run, money buys you freedom to choose how to live your life—and the earlier you start holding onto it, the better.