Monday Money – Important Dates

What are the important dates in your household?

  • When is your partner’s birthdays?
  • When is your wedding anniversary?
  • When is your mother’s and mother-in-laws birthdays?
  • When is your father’s and father-in-laws birthdays?
  • When is mother’s and father’s day?

There is planning that goes into these days, some of the planning may happen months, weeks or days before the event, of course there are some that happen on the day! This is so vitally important for the successful running of the event.

Try answering some of these questions:

  • How often do you get a phone bill?
  • What date does your phone bill start and end?
  • How often do you get a power bill?
  • Do you know roughly how much they are?
  • When is your car registration due? (Month)
  • When is your drivers licence due?
  • What is your insurance bill total and how often do you pay it at what rate?
  • Is there a penalty for paying the insurance this way?
  • Do you have private medical cover?
  • When is this due and how much is it?
  • When are the rates due and how much are they?
  • What rate of interest is your home loan?
  • What is your credit card interest and limit?
  • If you have a personal loan, what is the interest rate and how much do you owe?
  • What is the balance of your bank account?

So by comparison, how did you do? Like most people I would say that you got all the dates in the first lot of questions but only managed some of the answers in the second lot. Does this make the second lot of answers any less important than the first, or is it that we have clearly a different set of priorities and values.

From my perspective I changed the values, or moved them up on the priorities list. I now equally value the importance of each set of questions and answers. The results of which are that I am far more in tune with my financial well being along with the other aspects of my life that are important. It isn’t wrong to value these important aspects of our lives. As couples we share and celebrate birthdays and weddings but yet we don’t celebrate our financial successes along the way.

Getting to know your financial well being should not be an unpleasant experience, rather it should be a chance to look at how well you are doing. I hear you groan as you read this, we aren’t doing well, we struggle every week, we have no money, we argue, we can’t afford, etc. However I am sure that if you stop and analyse your situation closely you are doing ok, with room for adjustments that will in the long run assist you with your financial health.

Where to start is always the hard part, for different people the answer is going to vary. I am not trying to state the obvious here, but from experience most people only ever think about starting, they don’t position themselves to start, and if they do, chicken out at the last minute. Getting started is the challenge! I asked a group of 15 people if they knew what interest they were receiving on their savings account. No one could answer, please go away and find out, the next day, still no one knew, another day passed and 1 person had found out. On their $1500 in their account they received 0.05%. When asked if they could have done better, they didn’t know. At the time there were accounts with interest rates at 4.5%, a significant difference (90 times!). So after finding this out, of the 15 people, no one else checked on their interest rates, and none of them went and changed anything. A random sample, but I would say probably very likely to be the same numbers of you reading this information. What you find out will not necessarily make you change your behaviour.

If making money on what you have in your savings account doesn’t spur you into action, would knowing what it costs you on your various loans and credit cards perhaps make a difference? Again I think not as the banks survive on our inaction to make changes to the way we bank. They are there to make money for the shareholders, they run a business and are very successful at getting money from the customer. If you make a mistake, you get charged, the reverse happens and you get an apology, try apologising to the bank and see how far you get! So, how much are you paying in interest to the bank on your loans, home loan around 6% at the moment, personal loan around 10% and your credit card, about 18% to 22%. When there is an interest rate reduction by the Reserve Bank, it is passed on sometimes months after the event. With an increase, the rate rise is passed on immediately. If banks react so quickly there is a good reason, to make money. We should be doing exactly the same, checking and changing with the times so that we can maximise our savings or investments.

I have covered 2 aspects that for me have been critical in getting a better handle on my financial health. I started to plan ways of covering all the expenses, whilst also developing a plan for reducing the debt, both go hand in hand. Does your household have a budget and do you manage to stick with it? There are a number of really good online planners available, one of the simplest is available at: http://www.understandingmoney.gov.au/content/consumer/tools/planner/ it is very simple to use, fill in the fields and it does the calculations for you. If you can use Excel then it is even easier to use and understand.

What is the financial health of your household?

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