What should I do with my newfound money?

A sum of money that can last one person a lifetime might last another just a few years, months, or even weeks. If you made significant savings last year during COVID-19, or have been lucky enough to receive a pay increase, here are some tips that will help ensure your newfound money is put to work to benefit your financial position long term.



The reputable Australian Institute of Family Studies conducted a survey between May and June 2020 and asked respondents to identify the financial impact of COVID-19 towards household incomes.

The survey’s key findings found that many Australian families readjusted their daily expenses, created budget plans, and decreased their spending habits, due to a higher level of caution, despite those whose household income had not changed.

Due to this change in financial habits and enforced lockdown, new Treasury figures have estimated that Australian’s have stockpiled over $200bn in savings the past year.

Whilst we are seeing a surge in property sales there are many other ways you can use this new-found money to enhance your financial position.



Compound earnings over a long period of time are a great way to benefit your financial standing and build your personal balance sheet. Keeping your super account active with regular additional contributions is a great way to invest your saving growth.



Reviewing your investment strategy to suit your stage of life could be an appropriate way to utilise your saved money depending on your situation. High-risk growth assets with potentially higher returns may not be suitable to your situation anymore, particularly if you are heading towards retirement. Less-risky, slow growth assets will help protect your capital from investment volatility and are a sure way to steadily grow your investments.



Receiving a pay increase is a rewarding time and a clear recognition from your employer that your effort and skill has been acknowledged – as well as giving you the opportunity to enjoy the extra money in your bank each month. Be mindful about the increase in marginal tax rates with your pay-increase, otherwise you could end up paying 45% of tax from your pay increase (if you are in the highest marginal tax rate).


We recommend you portion up your pay increase and allocate it to some – or all – of the following options:


  • Pay down credit card debt. This is expensive non tax-deductible debt.
  • Pay down your home loan. A little extra per month will save you thousands of dollars in interest in the long term.
  • Additional savings. Put some aside for a rainy day, a good cash buffer is advisable for those unplanned events.
  • Salary Sacrifice in Super. You can send some of your pre-tax income over to super.  This strategy can be used to build up super while at the same time bring you down to a lower tax bracket.  There are complex strategies around superannuation, and we suggest you seek advice.
  • ENJOY IT. Always allocate a portion of your pay increase to enjoy.  As important as it is to save for the future, you must also leave a little bit to enjoy today.



Receiving an inheritance can present as an overwhelming road to navigate. A capital lump sum of significant cash inheritance can spark a spending frenzy within an individual, however the essential strategy to manage an inheritance is to slow down.

Newfound capital does not have to be spent instantly; it is imperative that a carefully considered set of action steps is initiated to protect, enjoy and potentially grow the asset.  It is not a race – hasten slowly.

Various strategies can be deployed to ensure the safety of your cash inheritance.  These strategies range from debt-elimination or debt-transformation to ensure sufficient income is generated from your investments.

From attending to your most pressing financial goals, to funding your short-term goals such as paying off debt, it is essential to choose the appropriate debt to pay off first that will enhance your long-term goals.

Capital Gains Tax is important to consider as particular assets could potentially have embedded CGT liabilities that require additional attention before their sale or disposal. This means inheriting a home as an asset may not be as easy to sell, without avoiding CGT.


As always:  play your plan, and plan your play!!


If you would like financial advice on how best to leverage your newfound money, then contact us for a complimentary consultation today.

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