Complete this simple quiz in order to know where your money goes and how to better your understand your financial status. By assessing your finances and having a budget, it can help you identify waste, get on the ‘same page’ as your partner and potentially help you to do more with your money.
Explore your spending habits and bring greater awareness to what is happening with your money.
Identify ways to better organise your money, expenses and financial goals
Explore practical ways you could identify waste, save money and protect your credit rating.
Read each question carefully and answer YES or NO as indicated.
| Did you have a budget written up for the last 12 months? | |
| Did you consistently monitor your spending over the last year? | |
| Did you have money leftover at the end of each pay period? | |
| In the last six months, have you actively looked for better deals or opportunities to save money? | |
| In the last year, were you and your partner on the same page about money matters? | |
| Do you have clear financial goals for the next 12 months? | |
| Were you able to save money and not dip into it? | |
| Do you know exactly how much personal debt you have? | |
| Have you reviewed your insurance policies this past year? | |
| Do you know your credit rating? | |
| Did you have emergency savings or a contingency fund? | |
| Did you consistently pay your bills on time? |
A budget is an itemised summary of your income and expenses. Writing a budget can help you make decisions about how and when to spend your money. When you see the breakdown of your income and expenses on paper, it may make it easier for you to make financial decisions and identify savings opportunities. Remember to put your budget somewhere you will see it often, and review and update it regularly throughout the new year.
This coming year, if you take five minutes out of your day once a fortnight to read your bank statements, you'll be able to review your spending and identify bad habits. Online banking makes this process easy - just log in, check your transactions, and update your budget accordingly. To make sure you don’t forget to do this, you can set a reminder on your phone to check your statements regularly.
It may have felt that you didn’t have much control over your living expenses. However, you might have more control than you think. Expenses can be broadly placed into two categories: discretionary and nondiscretionary. Nondiscretionary expenses include things like personal loans, mortgage repayments, insurance, and power, gas, internet, and mobile phone bills. Discretionary expenses include things like entertainment, coffee, eating out, smoking, drinking, and subscriptions such as Netflix and gym memberships. If you found that you had very little surplus money at the end of a pay period, it might be time to look for better deals on nondiscretionary items, and to take a second look at your discretionary spending. Once you have found ways to save money, take action and update your budget.
Every six months, conduct an audit of your living expenses and see if you can identify opportunities to save money. Compare expenses such as home loans, car loans, insurances, internet and mobile phone plans, and gym memberships to make sure you're getting the best value for your money. Remember, interest rates and plans constantly change and there are always companies that will want your business.
Many couples avoid the topic of money as it can lead to conflict. However, not talking about money may mean that you miss opportunities to grow your wealth. One way to avoid conflict is to speak with a neutral third party, such as a financial planner. A good place to start is to identify what is most important to you both. For example, discuss topics such as retirement, home ownership, travel, investment, and having kids.
Having financial goals can provide direction, a sense of purpose, and help you make money decisions on a day-to-day basis. Start by writing a list of things you would like to do with your money. Include big-ticket things like paying off your mortgage or investing in property, as well as lifestyle things such as eating out or going on holiday. Next, sort the list in order of importance to you. If you have a partner, write a list together or compare your lists afterwards.
Start by reviewing your budget and tracking your spending habits. Look through your bank statements and see if a pattern emerges when you withdraw money from your savings account. You may be under-budgeting each month, which is why you're forced to dip into your savings. Adjust your budget and your savings goals accordingly. If you dip into your savings due to a lack of self-control, it may be worth speaking to a financial adviser about setting up an investment that forces you to save.
How many credit cards do you have and what are the balances of each? What is the total of all your personal debt (excluding your mortgage?) Once you have this information, you will be in a better position to identify ways to pay off your debt. Review your debt regularly to ensure you're not going backwards or stuck in an interest-only position.
Sometimes, changing insurance providers or altering your insurance policies is an opportunity to save money. However, be very careful about any changes you make as this may impact your cover. It's a good idea to speak with an insurance broker or financial planner before you make a change to ensure you fully understand the risks and rewards involved.
Knowing your credit rating helps you plan for the future, especially if you're considering investing or looking to refinance in the years to come.
Talk with a financial planner to identify how much you can afford to put away in an emergency fund (and how much you need). It may be a good idea to place your safety buffer in an investment that does most of the work for you, such as an offset account.
Your credit score is calculated by a credit bureau. It's often used by lenders to help decide whether to approve you for new credit cards, personal loans, home loans, and so on. If you pay bills late, this may impact your credit score. Think about ways to ensure you pay your bills on time, for example by setting up automatic payments or direct debits.
