Belinda White, Fierce Girl Finance
Can you feel that Fierce Girls? The sun is shining, the weather’s getting warmer and spring is on our doorsteps. I can even see summer on the horizon. So it’s time to spring clean your money!
Now, I hate life admin with the heat of a thousand suns. I wish I had some amazing personal assistant – or what men like to call a ‘wife’ – who would call banks and Telco providers on my behalf, and sort out everything on my endless to-do list. Sadly, I have neither.
So, a couple of times a year, I try to batch my unpleasant life admin tasks, and approach them in an hour of power.
So, what do you do in this hour of power?
Find out how much you are worth
One basic thing I like to do is calculate my net wealth. This is simply your debts and assets added together to give you a number. Now if you have a mortgage, it’s very likely to be a negative number, but hey, we all have to start somewhere.
I have a detailed spreadsheet but honestly it’s too complicated for me, so mostly I use the handy Net Wealth calculator in my online banking (desktop version), or you can google a calculator. My tool automatically includes what I owe on my mortgage and then I plug in the equity in my home, my investment accounts and my super balance.
This gives you a sense of how you are tracking with your financial goals. It’s not really designed to make you feel amazing about it, but more about “have you made progress?”.
(Have my investments made progress in the last six to 12 months. Nope, they have gone down. But them’s, the breaks of the markets). It’s also a really good reason to go in and check your super balance! Which brings me to my next point.
Super Fierce y’all!
First of all, are you getting paid?
Did you know, your employer can put super payments on your payslip – like, “we’ve allocated this much money to your super” – but that does not mean they’ve paid it to your super fund. Crazy huh?
This is really important. Big organizations are generally pretty tight on these things, but especially for smaller and medium sized employers, you need to actually go into your super account and check the balance to see that you’ve been receiving payments.
And if you haven’t, then you need to take it up with your employer – and if you still get no love, then it becomes an issue for the Australian Taxation Office.
The second thing with super is obviously the fees, and that’s where your friends at Super Fierce have got your back.
If you plug in your details to the Super Fierce website, they will run the numbers and find out if you’re paying more fees on super than you need to. And they will also show you the potential savings on moving to a lower fee, super fund.
Spoiler alert: it’s usually A LOT of potential savings – like tens or hundreds of thousands over the life of your super.
And if you ask them, the Super Fierce gang will even do the hard work of moving your super to a cheaper option.
So that’s an easy win: low effort, high benefit. Definitely put that one on your spring cleaning list.
Just in case of emergency…
The other thing to do with your super is make sure that you are not paying too much for insurance that you don’t need. Or conversely, if you have enough insurance for your needs.
Now, there’s generally two types of insurance you get with your super without even asking: life insurance and Total and Permanent Disability (TPD). It’s generally useful, but because it’s the default option, it may not be exactly right for your needs. But you pay for it anyway.
Life insurance is there if you die and you need to help provide for other people, like a husband, wife or children. If you do have dependants, then it’s important to think about how much they would need. And is the amount you’re insured for actually enough?
If you have life insurance but no dependants, then it’s worth considering whether you need it. (I ditched my life insurance because I don’t have anyone to provide for, but I spend a lot on income protection in case I can’t work).
The thing about super is that because we’re not interacting with it every day, we might not see things we are paying for and thinking about whether they are right for us. If you aren’t sure, you can speak to your super fund and get more info.
The boring bills bust-a-thon
Last stop in the hour of power are the boring bills. This is where you take a look at your health insurance, phone plan, energy provider etc. and see if you can get a better deal.
For example, if you’ve been on a phone contract for a couple of years and you’ve come off the contract but still pay the same amount, you are likely paying too much (mine is $30 a month and I am still planning to find a cheaper one).
Obviously, in this inflationary world, bills are going up and up. So it’s now more important than ever to see if you can get a better deal. Jump onto one of those comparison sites and see if you can shave some costs off of your ongoing fixed expenses.
And while you’re there, comb your bank statements to see if you are paying for any monthly subscriptions you don’t need – things like apps and streaming services.
After all, those things that are ongoing monthly costs really add up. So shaving off a bit here and there can compound into big savings over time.
And then once your hour of power is over, you can roll into the new year feeling fresh AF with your finances!