Budgeting For The Unexpected

by Shawn O’Grady
2 Minute(s) to read

Budgeting For The Unexpected

With Christmas over and terminal tax dates passed it is time to start thinking ahead NOT PUTTING YOUR HEAD IN THE SAND.

Every business and every person has known and unknown expenses, be it staff and needing to replace operating equipment, or if you are not in business the phone bill and your hot water system. We all tend to remember to put the wages and money for the phone bill to one side. But seldom do we budget for the larger one off expenses. It’s not like we don't expect it won’t happen at some point, it’s just we hope it won't happen this week. So what are our options? Finance, perhaps you just hope that you can get a temporary overdraft, UDC finance, or have enough on the credit card. While this is a valid option sometimes the interest rate or timing is not ideal, what do you do if it happens during the Christmas shutdown and the bank manager is on holiday (hopefully you’re not working as you have a deadline to meet). Alternatively, you can plan ahead and start putting some money into a savings account now. But how much do you need to have saved? Anything is better than nothing! But more realistically maybe work on how likely you will need funds. Every item has a useful life (or depreciation rate) you are unlikely to need to replace all your assets at once, but if you can save towards the larger assets without impacting on business working capital or your standard of living too much, then why not. If you need some assistance working through your budgeted purchases you might want to talk with a trusted financial advisor, or contact the citizens advice bureau. It should come as no surprise that the sooner you plan for an expense the easier it is to manage, so why not start now.

Update on the government’s proposed ring fencing of losses for rental properties, this has not been passed by government yet, will it?  We don’t know, let’s wait and see.

The Inland Revenue have announced that they will be assessing your tax if you are a normal salary and wage earner, be careful as you will not have an opportunity to claim legitimate expenses against your income.

 

HAVE WE GOT YOU THINKING?

 

Give us a call on (04) 563 6965 or email: dennis@taxman.co.nz or shawn@taxman.co.nz

Keep an eye out for July’s article!  

 

TAX DATES TO REMEMBER

  • 31st March 2019 - End of the Financial Year…..
  • Remember payday filing starts 1 April…..
  • 7th May. 2019 - Third Instalment of ProvisionalTax …
  • 7th May. 2019 - Bi/Six monthly GST Return for the period ending Mar 2019…