Accountant’s New Year

We’re nearly there, the financial year ends on 30 June and it’s accountant’s New Year.  It’s also the trigger for many of us to start pulling together our financial records and get ready to lodge our annual income tax return.

While getting the annual tax return lodged can be a bit of a chore for most of us, I quite like it, and that’s not because I’m an accountant!  It’s also not because of the possibility that there might be a refund coming my way from the ATO – that bit doesn’t always come to fruition anyway….. The reason I like it is for the opportunity it provides – the opportunity for reflection.

You see, in the same way that New Year’s eve is an opportunity to party, down too many drinks, review the year which is drawing to a close and make resolutions for the one ahead, accountant’s new year provides the same opportunity – at least in a financial sense – but you can always choose whether you have a few drinks while you’re doing it!

With all your financial information in front of you like the annual payment summaries, income and expenses there’s no better chance to evaluate what you’ve achieved in a financial sense for the financial year which is drawing to a close.  So this accountant’s New Year when you go through the whole tax return process, take the extra time to ask yourself some of following questions:

• How much did I earn last financial year and where did it go?
• What did I manage to accumulate in savings and investments in the last 12 months?
• Did I pay off debts and by how much?
• Have I managed to acquire an asset or build equity in something I already owned?
• What’s the total of my financial achievements for the year?
• How does that compare to the amount of money I made last financial year and how do I rate my performance at managing my money?
• What small changes could I make to achieve a better financial result next year?

Some years going through this process can be rewarding and at other times it can be more confronting than say, a poke in the eye with a stick!  If nothing else, the process can certainly be an illuminating insight into where all your money actually goes – or doesn’t go…..It can also be a great time to sit back and reflect on what opportunities you have and to make small changes to improve on the result in the coming financial year.

One thing’s for certain, if you do the same things and make the same financial choices you did last financial year, you’ll probably get the same result.  Accountant’s New Year is a great time to take stock and write a new chapter in your life – with you as the author.  Sure, it might not be 50 Shades of Grey but accountant’s New Year at least provides the opportunity to develop your financial sub plot!

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By  Dean Johnson