Good riddance winter, with your one-after-the-other cold, mould and reality  shows Channel Ten has oversold.

If the change of season/programming has you all inspired to embark on a  spring clean, then don't forget that all-important financial house.

Here's a handy money-health checklist, inspired by the Australian Securities  and Investments Commission's efforts for this week's MoneySmart Week.


I write often about the importance of actually having a target if you want to  hit one. Think about it: how much money have you earnt over your working life,  and what do you have to show for it? If the answer is "not much" you're likely  focusing too much on ''here and now'' rather than ''somewhere else and later''.  To resist the consumer temptations thrown at us every day, you need a tangible,  ultimately achievable reason - so get dreaming.


A little extra goes a long way - unless you simply adjust to spending it.  First, are you getting all the benefits you're entitled to? Think family tax  benefits and Centrelink payments, and giveaways for lower earners such as  the  superannuation co-contribution. Ensure you are earning what you are worth  (ladies, I am especially talking to you).

The other key part of your personal balance sheet is what you spend. Just  like striking the delicate balance that is calories in, energy out, if money out  exceeds money in your finances will spiral out of control and become unhealthy.  And in this case it's your debt that may bloat.

Do you know where your money goes? ASIC says only 54 per cent of us do.  Noting it or signing up for the regulator's TrackMySpend smartphone app can  yield all sorts of surprises. A relatively painless place to start ''trimming  the fat'' is to get a good deal on so-called fixed costs such as  utilities.


Give some thought to whether your overall money equation is getting better or  worse.

Sure, throwing extra money at loans does wonders to clear them early, but  there are also easier ways - like getting a better home-loan deal while keeping  your repayments the same.

For example, move a $300,000 loan from a big bank charging 6.8 per cent to  one of the 5.8 per cent lenders and maintain your former repayments and you'll  save $54,219 and nearly 4½ years. You should be accelerating personal loan  payments, too.

With credit cards, transfer any outstanding balance to a card offering no or  low interest  for a period. Our sister publication Smart Investor  magazine has just named ANZ's First Visa Card, which charges 2.9 per cent for 12  months, as the best value.

The best way to attack your debts from a mathematical perspective is from  highest to lowest interest - and set a time target (with the aid of a site like to keep motivation up.


I mentioned the financial-fitness equation earlier; if you are managing a  money surplus, are your savings or investments growing? And does that mean you  have a cash stash that you could access in an emergency?

A caveat here: if you still have debt, repaying it is one of the smartest  possible financial moves (and house any emergency funds in or alongside a loan  too).

You earn an effective return equal to your interest rate - which could be 20  per cent or even higher on a credit card - and this is tax- and risk-free.  Otherwise, you need well-diversified investments.


Jump on the tremendous super calculator at to project the  potential size of your super fund at retirement.

You need an amount large enough to generate annual income of two thirds of  your final salary; a rough and ready lump-sum guide is 20 times that salary.

If you're nowhere close, look at clever ways to redress this, such as   before-tax salary sacrificing;  but just be aware the new limit for concessional  contributions (which includes your employer's) is $25,000 a year.

Before we leave the subject of the future, it's vital to also check that you  and your family are protected with adequate insurance and that you have  up-to-date wills in place.

At you can input your details into a questionnaire, which  will then give you feedback about your progress and make suggestions.

Of the 4000 Aussies who have taken the test so far, the most common failings  were missing a tax return, having no income-protection insurance and foregoing  available income. How will your finances fare?

Nicole Pedersen-McKinnon is the editor of  Follow her on Twitter @NicolePedMcK.

Written by NicoleSmith,
Tuesday September 4, 2012

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