Fiancial Year Check-up

Well, it’s coming up to the end of the financial year (Australia). How did you fare? Are you in a better financial position than you were a year ago? What could you have done a bit better?

Questions, questions, questions!

I don’t know about you, but I am finding the years going quicker and quicker. I am so focussed on day to day living that the year has slipped away. As some of you might know (if you have read my other blogs) that come July I will download every transaction from mine and my wife’s bank account and analyse our spending. I then compare it to last year’s analysis. A bit nerdy I know, but I have found it surprising over the years to see how much we waste unintentionally.

One unintentional discovery I found is that as we become more financially secure we tended to loosen our focus on saving for our future endeavours and slipped into the instant gratification of having something immediately because the bank account looks okay. A handbag here and a power tool there. This is why I like to analyse our spending each year. It helps us to re-focus on our goals.

This yearly exercise is not about punishing ourselves for overspending either. It’s a soft reminder of our journey toward retirement and reaffirms our commitment to financial freedom.

For those who own small businesses, don’t get caught up in the EOFY (End Of Financial Year) Sales hype. If you don’t NEED it, you DON’T need it. No matter how much you SAVE.

The new financial year is also a great time to clean house, not only financially. I became some-what of a minimalist some years ago. I had a sense of liberation when I threw out my book collection. A colossal empire of books once read with the dim intension of a re-read in the imaginable future. I then moved on to clothes, DVD collection and anything that stood idle with the barest of attention. I scanned ALL our photos, cards, paid bills and even took photos of trophies before their demise. Why? Because us Aussies can sometimes be hoarders with good intentions that something might be needed in the future and to discard it would mean having to potentially spend money to re-gain it.

 It’s also a good time to review all your insurances and interest rates. Are you getting your money’s worth?

How about challenging yourself to save just five percent from your yearly spending. When 1 July comes around, download your transactions and put them in categories. Then keep tabs on your spending for the year, especially when you spend cash. You would be surprised just how much you can save by monitoring yourself.