Easter is the perfect time to review your "nest egg".
So it’s coming up to Easter time which means you can look forward to gorging on chocolate, having a few days off work and reviewing your finances. Wait … what?
Yes, you read correctly. Aside from the beginning of the year, and mid-year around tax time, it’s not a bad idea to review your finances quarterly. So Easter and spring are actually perfect times to give yourself a financial health check.
While the thought of doing this may make you want to hide under the doona, Deborah Southon, director of Fox Symes and Associates, who provide budgeting and debt solutions, says you’ll feel less stressed in the long run by taking active control of your money matters.
“If people don’t regularly review what they have in savings and debts, it can be bad if unexpected things happen like the fridge blows up or their partner gets sick and is off work for three months,” she says. “You could suddenly realise you don’t have enough funds.”
To stay on track consider these six review tips.
1. Go through your bank statements
If you’ve been going crazy at the shops, staring your statements in the face may be a frightening prospect - but it has to be done! You need to be across how much you spend and owe so you can identify spending patterns and work out if, and in what areas, you need to cut back.
2. Pay down your debts - now
If you have money owing on a credit card pay off as much as you can during your financial check-ups, particularly if you’re facing Armageddon with multiple cards. “Cut up the ones with the highest interest rate and pay them down ASAP,” advises Deborah. “Live strictly with one credit card or none at all. Get a low interest rate card and whatever you do, don’t just pay off the minimum.”
3. Negotiate cheaper rates with service providers
It’s always worth haggling a few times a year. You might be surprised at the discounts you can bag if providers suspect you may be shopping around. Ask your phone and internet provider if there’s an option to go on a cheaper plan. The same goes for your bank and your home loan rate.
4. Review your budget
If you really want to save it’s a good idea to set yourself a budget for things like groceries, going out and clothes. Then at review time check your statements to see if you’ve stuck to the plan or not. “Budgeting is a fantastic idea,” Deborah says. “If people want to buy a property, go on trips or send their kids to private schools, it can all be achieved through budgeting. You can work out a fabulous budget, but unless you are committed to it, it’s not going to work.” Check out an online budgeting tool like the one at ASIC’s MoneySmart, or a budgeting app.
5. Compare insurance policies
If your health insurance policy is something you filled out hurriedly in your lunch break a decade ago, it's probably time to do a quick check. For instance, you may be surprised to discover you’re paying for extras such as pregnancy cover when you have no intentions of having a child! To look for cheaper policies go to a comparison finder such as www.comparethemarket.com.au.
6. Check your super balance
According to Westpac, there is roughly $18 billion of lost Aussie super floating about. What’s more, two in five Australians have no idea whether any of this belongs to them or not. This is hardly surprising. For many people, superannuation is about as interesting as a trip to the dentist. However, if you notice your super has done zip in the last few years, it’s time to discuss with your fund manager whether you should move it into a higher performing class or investigate other funds. If you have multiple funds, roll them into one so you’re not paying multiple fees.
So, if you’ve got a little time up your sleeve, take a break from the eggs and get cracking on your review. Happy Easter!