This 5-Step Financial Health Check Helps Take Stock of Your Spending

Some of us are great with our money. Others not so much. A good financial health check is always a good idea.

You might be one of those who think we don’t need to. We know what’s going in, what’s coming out, and we possibly even have a colour-coded budgeting spreadsheet. Some of us even have it laminated.

Then there’s those of us who are not like this. We blame the economy, COVID, the spikes in electricity, the half-priced homewares at Kmart. I blame all of the above. Plus the unexpected parking fines.

Whatever the case, it’s difficult to know where you are financially when everything feels all over the place. This is why it’s a good idea for every mum to give herself a financial health check.

What the heck is a financial health check?

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Good question – what does this mean? What is a financial health check? And why do we need one?

We asked mortgage broker and founder of Clover Financial, Phoebe Blamey to explain.

As Phoebe tells us, a financial health check is a way to take stock of your finances. See where things are at and look at small moves to get on top of your money.

Check out: The Happy Money Journey - The Financial Bible for Mums

There are a few ways you can do a financial health check.

The old fashioned way – with a pen, a piece of paper and your bank app.
Many bank apps now have a tracker to show you what is going where. You can normally go into your internet banking and will see something like “spending” or spend or categories.
Or you can download your bank statements into an excel file and go through each item. This can normally be done via internet banking as well and you will need to select a date range and download as either a csv file or xls format.

Ready to give it a go?

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STEP 1: Let’s analyse your assets.

Your assets are what you own:

House
Car
Any toys you have (boats, motorbikes, camping equipment, bikes, etc)
Furniture
Superannuation
Stocks/Shares/Investment Accounts
Cash in bank accounts
Money hidden in the closet/dresser/veggie crisper

Make a list of your assets and what they’re worth.

STEP 2: Move onto your liabilities.

Your liabilities are what you owe. Again let’s make a list of what they are and how much you owe.

Home loan/s
Credit Card
Afterpay/Zip Pay
School fees
Car loan

STEP 3: Onto the maths.

Subtract your liabilities from your assets and voila, you have your net worth.

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Next dig down into your everyday earning, expenses and savings.

This is where we get into the nitty-gritty. It’s also where we often see where we can start cutting back by eliminating things we really don’t need.

STEP 4: What do you earn?

Gross income is your income before tax
Net income is your income after tax and any deductions like HELP debts etc

If you are self-employed, what are you paying yourself each week, fortnight or month? If it’s too hard, just go back over the last 3 months and take an average. Do the same if you are casual or contractor.

STEP 5: Let’s look at your debts and other fixed costs.

These are things like mortgage, rent, insurance – they stay the same every month. After that, add any credit card, AfterPay or ZipPay payments made regularly.

And now the fun part – the everyday expenses.

Groceries
Entertainment (days out with the kids, dinners, movies)
Morning coffees or cocktails at night
Sporting activity costs
Gym memberships
Clothing
Homewares (damn you Kmart!)
Fuel
Self-care (hair, eyebrows, nails, etc)
Anything else you spend money on each week

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As Phoebe explains,

Once you see where your spending is going, it’s easy to see what you might want to change. For a lot of people it’s eating out – and by that, I don’t mean beautiful romantic dinners and Sunday lunches with a big group of friends.

It is the small things, coffee here, sandwich there, drive through, uber eats and the mid morning muffin. Just know small changes can have really big results!”

Four super simple ways to reduce these little costs.

Pack a lunch every time you leave the house. Force yourself to STEP AWAY FROM THE DELICIOUS CAFE MEALS and eat what you bring instead.
Limit takeaway and Uber Eats to once a fortnight. Try doing a big cook-up on a Sunday instead and freeze meals to have on hand for those extra busy nights when takeaway seems like the easiest option.
Avoid impulse buys – seriously this is what I had to do to curve my Kmart addiction and it worked. I limit myself to a Kmart trip TWICE a month only. The same could go for trips to the centre aisles at ALDI!
Allocate yourself a budget every month for the different categories (groceries, fuel, entertainment, self-care) and stick to it. Make sure you also include a MISC category just in case something pops up during the month like a kid’s birthday party invitation or an emergency trip to Kmart!

Sample savings

If you eliminate your $5.00 work coffee, over a year you can save $1,300 a year (give or take).
If you eliminate your weekly trip to Kmart to buy a $2 card and come out with $60 worth of homewares, you can save an insane $3,120 over the year!
Reduce your family takeaway to once a month (rather than weekly) and you could be saving around $2,000 a year!

Crazy, right??

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Join The Happy Money Journey

To help you get there, Phoebe has some great offers for our Mum Central readers.

Check out her online Money Makeover course and get four lessons, access to instructional videos, a workbook and information pack and their WealthTracker App. We’ve got a great discount for the month of October and November too!

Simply use the code MUMCENTRALFREE at checkout and save nearly $100! (Regular $248 down to just $149).

Be sure to also check out The Happy Money Journey and receive a free copy of the workbook plus free postage. This financial bible is a step-by-step formula that breaks down how you spend, save and invest, and how those things build your future.