Top tips to improve your financial fitness

Put your cash through its paces with these tips from financial advisor Helen Baker.

For many of us, 2020 has been a year for focusing on our health. But it’s not just our physical well-being we’re worried about. With change at every turn, it’s also been a time for monitoring our “financial health”.

There’s a great deal of uncertainty arising from COVID-19, says Helen Baker, a licenced financial advisor and author of On Your Own Two Feet – steady steps to women’s financial independence.

We’re grappling with a global pandemic, recession, surging unemployment, and uncertainty about when – and if – things will return to normal. But there are steps you can take to keep your finances, as strong as possible.

It’s more important than ever to start the new year on the right foot, adapt to our changed reality and making our money do some of the heavy lifting for us, Baker says. Follow these steps to keep your bank balance as fighting fit as possible.

Set your goals.

As with any fitness program the key to success is all about taking manageable steps to set yourself up for long-term results. None of those short term fixes! Whether it’s a new house, car or are planning for that overseas holidays you want to take next year, it helps you set tangible goals that you can work towards. What are your dreams? Baker asks. Knowing what you’re aiming for will allow you to focus.

Target key areas.

Next, take an inventory of all your expenses and break them into sections. How much budgeting do you need to do for bills? What about holidays? What is left for savings and investments? Just like you would use different weights on different areas of your body, break down how much you want to spend Baker says, and allocate the heavy lifting to the important areas.

Maintain the good habits.

Most of us have altered our spending habits over the past few months. So if you found that you’ve actually been saving money, aim to keep up the good work, post-lockdown and pandemic. Run through your list to see which ones you can continue to keep, such as cooking at home rather than buying food for lunch every day, Baker suggests.

Beef up your super.

Superannuation is an important safety net for us all once we’re no longer working. And there are benefits to stashing any surplus cash into your super now, Baker says. Firstly, there are generous tax incentives for making additional contributions. There’s also the ‘carry forward’ rule that effectively allows you to catch up on periods when your income and hence super contributions may have been lessened, such as losing your job or going on to JobKeeper, or JobSeeker.

Prepare for the unexpected.

Protect what you’ve built with the right insurances private health insurance, general insurance and personal insurances, Baker advises. Make sure you have enough insurance for you and your partner or else you may find yourself in some trouble. It’s also important to be mindful of any insurance through super you might have, especially if you’re planning on consolidating your funds. Do not roll over your superannuation until you have fixed the insurance levels you need, because you may not get covered elsewhere Baker adds. Once it’s rolled over, you’ve lost it! Consider it added to the to-do list!

Give your piggy bank a health check.

When it comes to saving for the future, every bit counts.

Review your household bills.

You could be getting cheaper insurance utilities and other services just by shopping around, Baker says. Review your subscriptions – I’d put money in the fact that you’re paying for at least one subscription you no longer use.

Claim your work from WFH expenses.

If you’re new to working from home you may be surprised by what you can deduct. Don’t forget to claim your working from home expenses, adds Baker. An accountant can be a worthwhile investment.

Double Up.

Consider enlisting a shopping buddy that you can go halves with on bulk items. Sharing bulk purchases with your sister or friend or mum can halve your overall spend and reduced wastage, Baker suggests.

This article was originally published in WHO magazine September 2020