Financial health check

The start of the financial year is a great opportunity to do a financial health check. Set things in order, re-group and look back to ensure your finances are on track, and of course to re-balance and plan for the year ahead.

Best practice around reviewing your finances begins with a calculation of your net worth. Save this somewhere so it's easily accessible next year, and you'll have a simple and effective way to measure your progress against a set goal. Include all of your assets (property, cash etc.) and liabilities to calculate a final figure.

Next, pick a couple of items from your financial portfolio, whether they be credit card or mortgage, superannuation accounts or insurance policies etc, and do some research to find out whether you're getting the best possible deal. Interest rates, fees and risk profiles should be checked at least every few years for each of your accounts. Just as compound interest can be enormously effective over time, so too higher fees and costs can result in far less wealth at the end of your investment period.

Spend some time getting to know your investments. How much is in your super? How is it invested? Are you on target to achieve your final goal? What difference could you make by re-balancing certain investments? Ask questions and seek clear and relevant answers as if you're looking after the world's most important retirement nest egg …because you are!

Then depending on your stage of life:

20's and 30's
  • Consider maximising the effects of compound interest and perhaps even saving a little tax by salary sacrificing a small amount - perhaps $20 - $50 a week - into your super. A little now adds up to a lot later. Be wary not to exceed contributions caps though.
  • Check that your investments are allocated correctly to match your risk profile and the fact that you have several decades to ride out any market turbulence.
  • Analyse your insurance needs and check you have the correct levels of cover. You possibly have people that rely on you to provide for them. Make sure you, and they, are suitably protected.
From 40 to 60 years old
  • It's time to start knocking down that bad debt, so make that a priority for the next few years and track your success using your net worth document.
  • Insurance is vital at this stage of life as you'll likely have dependants and major responsibilities, such as a mortgage. Check you are insured to the right level.
  • Consider what you can do at work, or outside of work, in order to improve your earning potential.
  • Analyse your superannuation and figure out whether you need to begin maximising contributions, but don't exceed contributions caps as additional tax will then apply.
  • Depending on your comfort with risk and your time left in the market, your portfolio's risk/growth exposure should be periodically fine-tuned.
Pre-retirees and retirees
  • How long will your retirement wealth last? How are your investments performing? This is perhaps the most important period of life to ensure your portfolio and retirement income stream are suited to your lifestyle.
  • Is your estate protected? Organise a will and enduring power of attorney if you haven't already done so.
  • Put some money aside to enjoy yourself whether it be for travel, a hobby, a course or simply a night out to dinner every so often. You have earned it.
Planning for the best

To revisit your financial plan and ensure you're on track to achieving your goals, or to put new plans in place for the year ahead, speak to our financial planning team.

If this seems overwhelming right now and you don't have time, make an appointment with our Financial Advisers and we'll help you review your position. For an appointment call 03 8850 3333 or email obrien@obbc.com.au.


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Ivanhoe VIC 3079

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03 8850 3333

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