11th Jul 2016
FONT SIZE: A+ A-
10 things to do for your financial health this year
10 things to do for your financial health this year

The start of the financial year is a great time to hit reset on your money goals so you can ensure that 2016/17 keeps you in the black.

In part, that means doing a stocktake on the past year, clearing out any financial clutter and preparing for the unknown.

These tips, prepared by RateCity.com.au, may help you get ahead in 2016/17.

1. Set a fresh budget
Start by collating your accounts and working out exactly how much you spent last year, what you spent it on and how you may be able to do better this year. The rule of thumb of saving five or 10 per cent more than you did last year could mean an extra holiday this year. It may be as simple as leaving the budget untouched for most essential expenses, but reducing discretionary spending. Apps like PocketBook can be handy for budgeting and Microsoft Excel has good functionality for keeping spending and savings goals aligned. 

2. Check your entitlements
Once you know how much you want to spend and save this year, it’s worth making sure you’re getting all of the income and discounts you’re entitled to. The obvious one is the age pension, which is available to eligible over-65-year-olds, subject to income and asset tests. But many seniors find a lot of value in the Age Pension’s related entitlements, such as the energy supplement, which adds up to about than $21 a fortnight for couples, and the Commonwealth Seniors Health Card, which entitles recipients to thousands of dollars in discounts each year. 

3. Do a fee audit
Fees can account for an alarming proportion of the household budget, which makes little sense when there are so many lenders competing for your business with low or no fees. Last year, Australians spent $4.33 billion on fees that were largely avoidable. Switching to a no-fee credit card and/or housing loan is an easy way to save yourself hundreds of dollars a year.

4. Make sure your super/investments are where they should be
The structure of super and other investments can get complicated, so it’s worth putting in a call to your fund or adviser early in the financial year to make sure your investments are where they should be for your age group, your risk tolerance and for tax purposes.

5. Get the estate sorted (again if you need to)
A lot can change in a year and if your circumstances have, you may want to revisit your will and estate planning to ensure the right boxes are ticked. This is especially applicable if you’ve had any new marriages or babies in the family, asset changes, health scares or a loved one has passed away.

6. Pay down bad debt
While your financial motivation is high, it could be worthwhile setting a plan around how you’re going to knock off any debt that’s hanging around. Setting a timeframe and plan around what you could sacrifice to pay down debt is a useful start.

7. See how your savings are tracking
If you have money in term deposits, you may have noticed you’re not getting as much bang for your buck as you once were. With interest rates at record lows, savers are among the first to suffer. However, there are still some high-yielding savings and term deposit accounts around, at least half a dozen of which are rewarding savers with more than one per cent more than the official interest rate. It could be worth switching.

8. Ask whether your insurance is in order
Health insurers often kick off the new year with offers to entice new customers who may not have considered them in the past. If your health insurance doesn’t tick the boxes, it may be worth collecting a few quotes from competitors to make sure your needs are covered. The same goes for life insurance, car insurance and home and contents insurance.

9. Create a plan for the unplanned
Life has a tendency to catch us by surprise and it’s not unusual for our financial health to suffer when it does. It may be worth having a separate account or savings stream or even a shoebox you add to regularly to cover you in the case of the unexpected.

10. Reward yourself
There’s no point in exercising discipline if there’s no pay off. If you had a good year last year, why not start the new year with a short trip away or a gift for yourself – then aim to do the same next year if you hit your goals. Here’s to a financially healthy 2016/17!

Kate Cowling is the Personal Finance Editor at RateCity.com.au.





    COMMENTS

    To make a comment, please register or login

    12th Jul 2016
    10:58am
    All the above tips are ones that should be used WAY BEFOREHAND retirement, as well as during your golden years.

    12th Jul 2016
    11:50am
    Reward yourself?

    Your reward is to have made budget or better.

    Having the additional MONEY is the reward.

    Your don't then consume it - dopey!!!
    tactful
    12th Jul 2016
    4:06pm
    If we are retired, stick to our budget and have some money put aside, then of course we should reward ourselves with a little spoiling.

    Reasons you sound like a grumpy old person who does not know how to use the english language correctly. Your don't then consume it???

    Why not consume what you have saved, it is yours after all or are you one of those who insists on leaving something for the family. Well if your family hasn't got their finances in order too bad they should see a professional budget planner.

    Parents do not OWE their children anything and if there is anything left once we have gone, then the family can share this, but I will not be going without just to leave something for them.

    My partner and me have worked darn hard to accumulate what we have and we intend to enjoy it to the fullest. Our family has been taught how to budget etc and they are all doing OK thank you.

    Our family's wish for us is to enjoy our retirement and spend our hard earned nest egg, if there is anything left when we are both gone they see this as a bonus.

    It is a shame more families don't think the same way, expecting their parent's to do without so they can have an inheritance.
    Anonymous
    13th Jul 2016
    11:11am
    Tactful (not) - consumption is the problem and why most people have no money and never train their children accordingly.

    Making money takes some skill and effort - spending it is easy - anyone can do it. The majority of people spend their whole lives giving themselves consumption rewards and about the best car to buy instead of the skills to learn how to make, keep, manage and grow their money.

    Our enjoyment is spending some - but the REWARD is constantly growing our assets.

    If you then teach your kids the same from an early age they can become wealthy in their own right – and they don’t need any inheritance. They understand the pointlessness of brands and useless consumption that is constantly chased by the masses.

    When you leave them a healthy inheritance they are already highly competent with managing money and are trained to deploy it for further increasing their own family's business interests and assets – or collaborating with their siblings to the same end.

    So, I just have a different philosophy about money compared to you. Parents who understand money grow their own assets throughout their lives whilst spending sensibly along the way. Their children then become the recipients of that wealth and become more wealthy accordingly - teach their children the same - and the cycle perpetuates.

    Making money usually takes a great amount of time and effort – as does training your family in these matters so you can trust them to manage any inheritance they should gain. You can either take a dog-eat-dog attitude to your wealth and leave your children little educationally or monetary-wise, or collaborate and teach them over many years with the aim of enhancing their ability to make and keep it, including an inheritance. Our philosophy is to collaborate and empower our children to hopefully be more wealthy and smarter with money and opportunities than we were.

    For us we believe we OWE it to our kids to continually educate them to be good money managers so they hopefully accumulate more assets than we did in their own right – but just as importantly - for us not to squander what has taken us many years of effort to accumulate - so they and their children, and their children’s children, can benefit accordingly.
    Anonymous
    13th Jul 2016
    12:49pm
    BTW tactful - on your point of correct grammar...

    You wrote... 'My partner and ME have worked...'

    Correct grammar is 'My partner and I have worked...'

    You have to be so careful when you throw grammatical stones - eh!


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles