Financial Health Check


Hands up all those who enjoy sitting down to update their finances and submit themselves to a new year financial health check? There aren’t a lot of you, are there?

OK. It’s time to stop avoiding this little financial task. Prepare yourself because I’m about to give you The-Just-Do-It Stare.

financial health check just do it image by Caleb Betts from Unsplash

That’s the Just-Do-It-Stare. Time to reset your financial planning with a financial health check.

If that isn’t enough to get you back on the job then i don’t know what is.

Why a Financial Health Check?

Looking around us at this seemingly fragile global state of affairs, it can be easy to decide that there’s not much you can do in the face of political uncertainty and what verges on financially strange times. However, this is simply not true.

There ARE things you can do to take control of your own position and to build a higher level of certainty into your financial future. Starting with a financial health check. Now it does not matter if you already completed this task when i raised it at the start of the calendar year – the following points are a checklist you should run through on a regular basis. If you have a financial planner then work through this list and make a time to sit with your planner and update them on your position. That’s one of the best ways of taking advantage of all those years of experience, training and knowledge inside your planner’s head.

And between you, it should be possible to reduce some of the uncertainty, worry and fear that we are all bombarded with every single day we turn on the television, the radio, the computer or when we pick up a newspaper.The world may look uncertain but the reality is that the future has ALWAYS been uncertain – it’s your job to grab hold of your life and make it better. So let’s get on with this financial health check, shall we?

Financial Health Check – Michael’s version

Here’s a (very) quick checklist for your financial health check:

  • Tax – the three-letter word…

    • Your group certificates will start to arrive shortly. Use that as a prompter to start getting your 2016 financial tax year paperwork in order.
    • Did you get all the deductions you should have? Have you sat down with your Accountant for a pro-active discussion on making this new financial year as tax-effective as possible?
    • Have a notepad ready and sharpen your pencil for the upcoming changes to superannuation and tax that will inevitably flow from the weekend’s election results. There’s little doubt that changes will happen with such a big swing against the major parties.
  • Savings

    • Did you save as much as you expected for the financial year? If not, why not? If yes – well done! Can you do even better this year?
    • Have you adjusted your budget for your 2016 money calendar? Do you know when your big bills will be coming in?
    • Do you have sufficient reserves to cope with the unexpected in this very fresh new year?
    • Decide on an amount you want to save, and make sure your accounts and transfers are set up correctly to make it as easy as possible to do on a regular basis.
  • Income

    • Is your income secure?
      • If you are employed, what are you doing to maximise your job and career opportunities?
      • Is it time to undertake extra study to increase your chances for promotion or pay rises?
    • Are you likely to receive any increases in income this year? Do you have plans for using what should be “extra” money? Remember, this extra money will be the most effective dollars you own – and don’t listen to those people who say “it’s not worth earning extra because you just pay more tax”. Sure, extra income may kick you into a higher tax bracket or just mean that you pay more tax but those last few dollars you earn are the most effective of all, and here’s why… Your regular income is taken up with tax and debt and living expenses – something that is fundamentally true no matter how much you earn. Most of us need that regular income in order to live and keep and maintain the assets and lifestyle we currently have. Most people struggle to save 10% of their regular incomes, so that means at least 90% of that regular income is being spent, and we have at most, 10c in the $1.00 available to spend on “extra” things that we may like. Yet earning an extra dollar above that figure and paying the maximum rate of tax would mean that you still have 50c of spending money in that shiny new dollar. In other words, the extra money you earn is five times more effective than your current regular income!
    • Are your expenses under control? For example:
      • Can you reduce any monthly expenses without giving up a benefit of some kind? Look around and you’ll be surprised how often you can achieve this.
      • If you have a monthly phone plan and are out of contract, perhaps you can move to a SIM only style plan and save some dollars?
      • If you pay your bills monthly and have sufficient cash in reserve, do you receive discounts for paying annually? With cash rates being so low, the monthly fees can often be much higher than the potential income you could earn if your money was kept in the bank. Not always – but it’s worth having a look.
      • Do you run to a budget? Even high income earners can benefit from a little bit of self-imposed austerity. If you haven’t tried it before, how about spending just one month working to a fixed budget for those little items like takeaway coffees / drinks / food or even your weekly food and entertainment costs?
      • If you have investment loans, are you saving up for any loan interest prepayments – especially those falling due at the end of the financial year?
      • If you have investment property – have you an established maintenance/upkeep plan and do you know when you are likely to incur some larger bills?
      • The government-run website MoneySmart includes some basic tools for budget planning, which can be found here.
  • Insurance

    • When was the last time you checked your house and contents insurance?
      • Is the level of cover still appropriate? Do you know what your excess is? Do you know whether your personal possessions are covered if they are lost or stolen when away from the home – like when you are enjoying time at the beach or out-and-about?
    • Is your car insurance up-to-date in terms of value and the type of cover you have? It can sometimes be a helpful exercise to pull out the policy document and rediscover just what you are (and are not) paying for.
    • Is your income protection cover still appropriate, and have you checked to see that the money you are paying is buying you the cover that you think you have?
    • Hands up all those who are completely up-to-date with the insurance cover provided within their superannuation fund? OK – the two of you can read on – everyone else needs to pull out the latest statement and see where they are up to.
  • Debt

    • Are you managing your debt ok?
    • Have you worked out when different debts will finally be paid and when you can expect to get some of that regular repayment money directed to your bank account instead? Any plans for that fresh new savings amount?
    • Can you refinance your debt to better spread the repayment load or bring down the total costs you are likely to incur?
    • Are you focusing any debt-repayment efforts to the most efficient area?
  • Investment

    • Do you have a short / medium / long term savings and investment plan?
    • Does your investment follow a particular strategy – passive / active / speculative? Does that strategy need a shake-up for the fresh new year?
    • Are you on track for your future plans? Most people have some idea of where they want to go or what possibilities they could achieve – but very few have ever taken the time to come up with a sensitivity analysis to see what their bottom line is likely to be.
  • Tidy up your money affairs

    • Is your will up-to-date? Do you even know where it is?
    • If you do have a will, does the executor have a copy or know where yours is?
    • Have you checked with your spouse or dependents (whoever they may be) to see if they know what position you will be leaving them in in the event of your death or temporary or total disablement through sickness or accident?
    • If you own or are part of a business, do you know where you stand if other people within the business were to die or be disabled? Do you have a business will?
    • If you have children, have you given thought or made plans for their guardianship should something happen to you?
    • Is it appropriate to have someone hold a power of attorney to help deal with your money or financial affairs in the event that something should happen to you?
    • Are your savings or investments in the best ownership structure? Is there an ability to have your income or earnings occur in a more tax or cost efficient manner?
    • If you are in a (relatively) new relationship, are you aware of just when you may need to share some of your assets/income in the event of a breakup in that relationship?
    • Have you set out an overview of your accounts, debts, insurance and investments in such a way that you have a clear idea of where you are, and where you are likely to go?

If you’ve noticed that this list looks highly familiar then i thank you, as it means you are a regular reader and you’ve noticed that the content is virtually a repeat of my January tips. And so it should be. The basics of any financial health check don’t really change much. It’s more a case of getting that prompter out to help prod you into doing what you know you should be doing.

Where is your reward?

One thing that i will add here is to ask that you take an extra moment to lean back, close your eyes and decide on a reward for doing this financial health check. Being disciplined and working hard and going without for a better future are all well and good but at what stage do you reward yourself for a job well done? Maybe a holiday? Maybe just time off work for a home staycation, to reconnect with friends and family. Money by itself is worthless. The true value of money is the ability to achieve things you want to achieve – so add in a specific reward to help make this financial health check less of a task and more like the start of a grand adventure!

financial health check what is your reward image by Filios Sazeides from Unsplash

Reward yourself. Do your financial health check then plan for something non-financial. Something that really counts towards making your life better.

These are Michael’s 2016 New Financial Year financial health check tips. No advice – just some ideas and thoughts on areas that you should look at in order to make the 2016/2017 financial year better than the one just gone.



Great Disclaimer

Always remember that nothing in this post or on this site is to be interpreted to be personal financial advice. It is general advice only, and a poor version of that as it is really just my thoughts and impressions. Whether i know you or you know me or we are complete strangers, you should not interpret any of this content as being definitely appropriate to you – even if i use the term “you” and if i sound overly familiar! Just so you are up to date on current financial planning rules and laws – personal financial advice can only be provided after due investigation into your current position, objectives, attitudes and suitable research into appropriate alternatives. Any personal financial advice must be documented in a “Statement of Advice” that sets out all of these points, as well as any financial cost to you or benefit to the person providing the advice. So you can see why that wouldn’t be possible in a website post such as this.


I love the images from If you are bored online sometime then i would recommend a journey through these images. Used in this post are images from Caleb Betts and Filios Sazeides.






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