Money
The mid-year money check-up: smart ways to stay financially fit
Halfway through the financial year is the perfect time to stop, stretch and check how your wealth is tracking. Here’s your friendly nudge to give your money a once-over.
By Bron Maxabella
The financial year can slip away faster than a tax refund during a weekend shopping spree. One minute you’re promising to “get organised next year,” the next you’re elbow-deep in crumpled receipts, wondering what happened. So, how about we make this year different?
Midway through the financial year is your sweet spot for making small, meaningful money tweaks. You’re far enough in to see how things are tracking but still have plenty of time to fix what’s not.
“Mid-year is the ideal moment to pause and take stock of your finances. You’ve got enough information to see what’s working, but you still have time to make meaningful changes before the end of the financial year,” advises Julie Slapp director of growth and customer solutions at AMP Super. “A quick check-in now can save you a lot of scrambling later.”
Here’s your seven-step mid-year financial check-up to get back in control and on track for EOFY.
1. Check in with your spending and saving
No judgement zone here, just a gentle suggestion to take a peek at where your money’s been wandering off to.
Log into your banking app and check your last three months of spending. You’ll quickly spot any sneaky subscriptions or impulse buys pretending to be “essentials.”
Read this too: How to stop impulse buying your way into debt
If your savings account is looking a bit too quiet, consider setting up an automatic transfer that happens right after payday. The less you have to think about saving, the more likely it is to actually happen.
You can also use this time to do a quick overview of what you’re paying for utilities, subscriptions and other ongoing bills. Don’t keep paying a loyalty tax when the best offers are saved for new customers. For instance, you can quickly check how your energy costs compare to others in the market at a comparison site like Compare Club.
2. Give your super some attention
Many Australians have their super funds on autopilot. AMP research shows almost half of Australians are disengaged (44%) and a surprising 27% admit they’ve never engaged with their super provider.
“If you’re not keeping an eye on your super, you could be missing contributions, paying unnecessary fees or be in an investment option that doesn’t suit your stage of life. Just a few minutes of attention a few times a year can make a massive difference down the track,” says Julie.
That wouldn’t happen to a Citro reader, right? We’re all over our super and here’s what we’re looking for:
Check your employee contributions: Log into your fund and make sure your employer contributions are landing where they should. If you’ve changed jobs recently, confirm you haven’t accidentally opened another account (multiple accounts = multiple fees).
Use unused carry-forward cap space: if in previous years you didn’t use your full concessional cap – and your total super balance at 30 June of the previous year was under $500,000 – you may be able to use unused cap space from up to five years prior. If you’ve got unused caps and can afford to up your super contribution each month, now is a good time to start.
Consider spousal contributions or splitting: If your partner has a lower super balance or is on track to a low income this financial year, contributing after-tax to their super (or using contribution splitting) can be a smart move. More on this at the ATO here.
Check your investment options: it’s worth checking that your investment option still fits your goals. If you’re feeling less risky in your 60s than your fund thinks you are, it might be time to rebalance. More on this here: Invest, nest or rest: 3 money styles to de-risk retirement income
3. Take a look at your debt
Debt when you’re older needs particularly careful handling. It can still work for you, but only if you’re clear about what it’s costing and why you’re carrying it.
Start by checking the interest rate on your mortgage, investment loans or credit cards. If you’re still paying more than you need to, it’s worth talking to your lender or a broker about refinancing, especially as you move closer to retirement.
“Many people assume refinancing is only for first-home buyers or younger borrowers, but it can be just as powerful later in life. Reviewing your home loan can reduce your interest rate, free up cash flow and help you enter retirement on stronger footing,” Julie says.
For many people, this is the decade to focus on reducing or clearing what’s left of the mortgage, or at least locking in a manageable repayment plan that won’t stretch your retirement income. If you’re using credit to fill income gaps, step back and check whether your budget, investments, or super drawdowns can be adjusted instead.
4. Tune up your insurance
When was the last time you checked your cover? Life changes and policies don’t update themselves. Wouldn’t that be nice?
Review your home, contents, car, health, pet and life insurance. Are your sums insured still right? Any double-ups? If your car’s lost value or the kids have moved out, you might be able to save a chunk without losing peace of mind.
Read this too: Insurance: smart protection or money down the drain?
A quick phone call or online comparison can make a surprising difference to your bottom line. Compare your health insurance policy with others in the market at Compare Club.
5. Check your tax-smart moves early
EOFY isn’t the only time to think about tax. Getting organised now means you can still take advantage of smart strategies before it’s too late. If you’re self-employed, review your expenses and receipts, and consider whether extra super contributions or charitable donations make sense this year.
Even employees can benefit from a mid-year review, if you’ve had a pay rise or started a side hustle, you might need to tweak your tax withholding to avoid a nasty surprise at the end of the financial year.
Read this too: 8 smart ways to supercharge your super before 30 June each year
Everyone can definitely benefit from checking you’ve got a good receipt-keeping system in place. It will save you hours of hunting come tax time and make it easier to claim every dollar you’re entitled to. While you’re there, ensure you’re correctly tracking your work-from-home hours as well. Note the ATO’s working from home deduction record keeping checklist here.
6. Revisit your goals (and make new ones)
Money goals aren’t just a number on a spreadsheet. Maybe you’re saving for a big trip, helping your adult kids with uni or the grandkids through school, or finally planning the home renovation of your dreams.
Now’s the time to check your progress and ask: is my money still working toward what matters to me? Adjust your goals if your priorities have shifted.
7. Sort out your general life admin
While you’re in the zone, take 10 extra minutes to check your will, power of attorney, beneficiary nominations on insurance and your binding or non-binding death-benefit nomination for your super. Not the most scintillating task, but ultimately one of the kindest things you can do for the people you love.
Feature image: iStock/Inside Creative House
Tell us in the comments below: Do you have regular money check-ups throughout the financial year?
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