The start of a new financial year is a perfect time to take stock and do a financial health check. IAS directors Jo and Doug Brassett give you their top tips for getting on track.

It’s at this time of year, as we prepare our business and personal taxes, that most of us see more clearly where the gaps in our financial planning lie. As you assess your position from last year, ask yourself some key questions, make a list of what’s missing, and set goals to action these items sooner than later in the new financial year.

Take stock of your finances

In order to improve your financial situation you need to understand the lay of the land. The first step is checking on the current status of all of your assets, debt, income and cash flow, so that you can identify any problem areas and evaluate what else you may need to put in place. Financial goals aren’t static and are likely to change year-on-year. You may find an old investment is no longer serving your goals or that you want to take advantage of new opportunities and market conditions, such as the current low-interest rate environment.

Jo’s tip: “Pick one day and spend a couple of hours sorting out all of the above—write a list or use Excel to keep all of your information in one spot. Is it time to re-evaluate your debt to asset ratio? Is it a good time to re-invest or pay off more debt?”

Make an achievable budget

Taking stock of how your finances and expenses shaped up last year can help you create a realistic budget that you can stick to this year. If you’re having trouble creating and keeping to a budget, downloading one of the many available money-tracking apps and recording all you spend into it for at least a month can help you see where your cash is actually going. Then, use an online budget calculator to create a budget with the data you’ve gathered.

Two great money management app’s to download are:

How is your super looking?

A 2014 study by researchers at the University of Melbourne and Towers Watson found that a significant number of Australians are not likely to achieve adequate retirement incomes, even when all sources of savings are considered. Are you happy with where your superannuation is at for your age and plans in retirement? Do you need to be sacrificing more from your salary or making extra contributions if you are self-employed? Remember that super payments from your pre-tax salary reduce your assessable income, meaning that you pay less tax.  

Doug’s tip: “Check your maximum contribution for your age for this year and pay an extra amount monthly so you are set up in years to come. A little bit of planning now can be worth a lot when you need it most at retirement.”

Is your filing system working for you?

There’s nothing like trying to organise paperwork for tax time to show you if you have kept an efficient record-keeping system. If not, set up one now that you can easily stick to each week. Create a spreadsheet to record and add up your deductions and make folders in which you can store your receipts or scan and store them electronically (being sure to back up of course).  

Jo’s tip: “I love a list, however, recently I moved into a new technology world and downloaded Xero on my iphone. I now have my accounts set up on this application. It helps me to stick to my plan and be organised.”

Do you have adequate insurance?

Not only are income protection insurance, health insurance and life insurance essential for protecting the long-term financial health of you and your family, but they also come with tax benefits. If you haven’t put in place these essentials it’s a good time to get advice on what you need most and some of the best options available for your circumstances.  

Doug’s tip: “IAS has an insurance comparator of all insurers and therefore if you have had your insurance for a number of years, it is now the time to evaluate cost and benefits.”

Do you have a savings buffer?

It’s easy to put savings last on the list but a financial life jacket is important. Six months worth of expenses in a separate savings account is what is generally recommended to protect yourself in the event of any unforeseen emergencies.  

Jo’s tip: “Dad taught me years ago that there are two types of people in this world, those that “save first and spend second” and those that “spend first and save what’s left”. Which one do you think you are? Is your savings strategy working for you?

Are you happy with your investments?

Stop and take stock of how your investments performed this year and what your medium and long-term goals are. Are you happy with where you’re? Or do you need to create a new long-term strategy? Always diversify your investments – don’t put all your eggs in one basket!


A recent nationwide survey of almost 5,000 Australians conducted for financial services specialist BT by professional services firm Ernst & Young, charted the state of the nation’s financial health and found that:

  • 41% could meet monthly expenses but a third worried about being able to do so
  • 56% of people say they are unable to save as much as they would like to
  • One-third do not believe they will have a financially secure retirement
  • 48% of respondents said they rarely or never make contributions to a super plan
  • Almost 1 in 5 would not be able to find between $500 and $1000 if they needed it in an emergency
  • 35% have developed a sound plan to help them achieve their goals.

For more information or advice call us on (02) 8268 2900 for an obligation-free chat.

SOURCES Measuring accuracy of retirement savings. Melbourne Institute of Applied Economic and Social Research. Melbourne Institute Working Paper No. 5/14. March 2014. BT Australian Financial Health Index Reveals Households Under Strain. 17 February 2013.