You’re earning good money, but are you keeping it? Many Aussie tradies work hard for every dollar but fall into expensive traps that sabotage their financial future. Here are five mistakes that could be costing you thousands.
The “tax write-off” trap
Just because something is tax-deductible doesn’t make it a good deal. If you spend $10,000 on new tools or a fancy ute upgrade because “it’s a write-off,” you’re still out of pocket $6,500-$7,000 after tax. Smart tradies only buy what they genuinely need to earn more money, not just to reduce their tax bill. Your accountant can help you understand the real cost versus the benefit of business purchases.
Upgrading the ute every two years
A reliable work vehicle is essential, but constantly trading up to the latest model is wealth destruction. Between depreciation, loan interest, and higher insurance, you could be burning $15,000+ per year. A well-maintained ute can easily last 10 years. That money saved and invested in super or property could set you up for early retirement, especially important when your body might not hold up for a full working life.
Skipping Super because you’re a sole trader
When you’re an employee, super happens automatically. As a sole trader or subcontractor, you need to pay yourself super—but many don’t. Starting at 25 and contributing just $200 a week to super could mean an extra $500,000+ by retirement at age 65. Your body won’t be climbing ladders or lifting heavy materials forever. Super is your future income when physical work slows down or stops altogether.
No Income Protection insurance
One workplace injury or health issue could end your earning capacity overnight. Yet many tradies skip income protection insurance to save money. If you can’t work, how will you pay your mortgage, feed your family, or cover bills? This insurance is as essential as insuring your tools or ute, as your ability to earn an income is your most valuable asset.
Buy-Now-Pay-Later for Everything
Afterpay and Zip make it too easy to buy new boots, tools, or even groceries across multiple payments. Before you know it, you’ve got five or six BNPL debts running simultaneously, each taking a chunk from every pay. These add up fast and leave you scrambling when unexpected expenses hit, whether that’s needing to replace tools, car registration, or having a slow work month. If you can’t afford to buy it outright today, you probably can’t afford the repayments either.
The trades offer incredible earning potential, but only if you’re smart with your money. Avoid these traps and you’ll be set up for life, not just living pay to pay, despite a great income.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
