01 Jul 2010

Financial Fitness” in 30 Days”

With mortgage interest rates tipped to continue rising over the next 12 months now is the perfect time to commence a personal ‘financial fitness campaign’.

Credit reporting agency Dun & Bradstreet has produced a 30-day guide to financial fitness, which outlines a clear, practical and potentially enjoyable journey towards financial freedom.


Check your credit report

Your credit report is examined each time you apply for credit. Viewing it enables you to confirm your information is correct and address any discrepancies. A free credit report can be ordered through Dun & Bradstreet at http://dnbcreditreport.com.au


Discover what you are worth

Examine your assets and liabilities to determine your net worth, for example look at how much is your home worth and what you have left owing on your home loan.


Track your expenses

Cash flow is about effective management of your in-comings and out-goings. Start tracking your payments and expenses. Monitor every dollar you spend for a month and observe any unnecessary splurging.


Know your money personality

Everyone values money differently. Knowing your money personality will help you identify your financial strengths and weaknesses. To discover your money personality visit http://www.sorted.org.nz/calculators/personality-profiler/


Map out your financial goals

Make your financial goals real by documenting them. Prioritise them, include the approximate cost and group them into three categories: short-term, mid-term, long-term.


Make a budget

A budget is essential to maximise your financial position and ensure you are on track with goals. A budget needs to be flexible. Review it regularly. Use a Budget Planner


Update your filing system

Regularly cleaning out your filing system is essential to staying organised. Consider whether any of your documents can be better managed online.


Create a bill paying system

Setting up a bill paying system (Bpay or funds transfer) with your bank ensures bills don’t get missed resulting in additional late fees, paying interest and end up affecting your credit report.


Keep an emergency fund

Take a look at your insurance coverage and make sure it is adequate and that your policies are up to date and cover everything.

DAY 10

Check your insurance coverage

Take a look at your insurance coverage and make sure it is adequate and that your policies are up to date and cover everything.

DAY 11

Streamline your accounts

Save on bank fees by reducing the number of active accounts or combining several accounts into one.

DAY 12

Live within your means

Know how much you can afford to spend and stick to that limit. Reduce the number of purchases you make on credit.

DAY 13

Pay off your credit card

Clear the balance of your credit card each month to avoid unnecessary interest charges.

DAY 14

Take advantage of discounts and pricing cycles

Be aware of pricing rotations, such as the petrol cycle, and buy when the price is low. Save money by shopping at discount outlets or waiting for the sales.

DAY 15

Make your money work for you

Consider the type of account your money is sitting in, particularly for emergency funds and savings accounts. If you deposit regularly and rarely make withdrawals, ensure your funds are in a high interest account.

DAY 16

Prepare for annual expenses

Prevent bill shock by being prepared. If lump-sum payments cause you concern set-up and regularly contribute to a bank account specifically for these expenses or use pay-by-the-month.

DAY 17

Use spare cash wisely

Don’t splurge on something unnecessary. Consider putting it in your high interest savings account or investing it.

DAY 18

Check your super fund

Make sure you are contributing to the best superannuation fund for your needs and are getting the best return.

DAY 19

Find unclaimed super

The Australian Taxation Office offers a free super fund lookup service.

DAY 20

Top up your super

Consider investing in your super. Find out if you are eligible to take advantage of the government’s co-contribution scheme.

DAY 21

Consolidate your debts

Debt consolidation means one loan and one monthly repayment. It will save you money as this type of loan usually has a lower interest rate than credit cards. Read more on what is Debt Consolidation

DAY 22

Check your loans

Consider increasing your loan repayments, especially your mortgage. Even $20 or $50 more each month could make a significant difference over the course of your home loan.

DAY 23

Assess your credit cards

Improve your financial fitness by transferring the balance of your cards to one account – the one that offers the best transfer interest rates.

DAY 24

Prepare for the festive season

The cost is more manageable if you regularly contribute to a high interest account throughout the year. Also, shop in advance and make use of lay-by services when purchasing presents.

DAY 25

Get ready for tax time

If you’re unsure of what claims you can make it is best to ask for professional advice.

DAY 26

Earn more money

If you find that your expenses are constantly higher than your income it may be time to increase your salary. Discuss a pay rise with your boss, consider a part time job or turn your hobby into a source of income.

DAY 27

Create a master directory

Keep track of your accounts by compiling a master directory. Include all details of your financial assets. This will enable you to keep track of your financial accounts and be invaluable to your loved ones should anything happen to you. Be sure to advise someone of its existence and keep it safe from identity thieves.

DAY 28

Update your will

Make sure your will is in order. You can update it using a will-kit however, if you have dependents or a complex financial situation, it’s best to obtain legal advice.

DAY 29

Seek professional advice

The money you pay for advice may save you money in the long run or help you on the path to financial freedom.

DAY 30

Do an annual check-up

Set a date to make sure everything is up-to-date and working effectively. Ideally, this review should take place before the end of the financial year so you can make any necessary adjustments at tax time.

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