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End of financial year health check
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13 June 2007 
 
With the end of the 2006/ 2007 financial year in sight, the Institute of Chartered Accountants in Australia is launching its ‘Financially Fit’ series, advising Australians to take this time to review and assess their finances.  
 
The Institute’s Manager for Financial Planning and Superannuation, Hugh Elvy said that Australians must take responsibility for their long term ‘financial fitness’ the same as they would for their physical health and fitness. 
 
“When financial goals are realistic they are generally always achievable, but they need to be flexible to take into account new circumstances. While the tax cuts announced in the budget may not seem significant, when considered in light of potential further interest rate rises and higher fuel costs, even $10 a week can have an impact over the longer term - be that saving it or using it to reduce debt.” Mr Elvy said. 
 
“A financial situation is always affected by more than just major life changes such as buying a house or having children, it is also impacted by the economy and there needs to be a “buffer” in every budget to account for this,” he said. 
 
“The end of financial year prompts people to consider their income to complete their tax return, but Australians should take this opportunity to also consider their overall financial situation. Just as regular exercise is essential to staying healthy, maintaining a realistic financial plan as part of a weekly or daily budget is the only way to becoming financially fit long term.” 
 
Institute ‘Financially Fit’ checklist:

  • Review budget - detail how much you earn and spend
  • Question expenses - have they changed due to external sources and are they needed?
  • Review goals - what do you want to achieve - pay the bills on time, kids education, retire etc?
  • Risk management - assess what can impact the achievement of your goals and review insurance
  • Review savings - save first, spend later, assess savings plan and ensure it will help reach your goals
  • Review estate planning - ensure your family’s financial needs are catered for in all circumstances
Superannuation is one of the most effective saving vehicles and the end of the financial year is an ideal time to review and consider the Government’s co-contribution super scheme. For people who earn up to $28,000 and contribute up to $1000 to their super, after tax dollars, the Government will also contribute, in addition, up to $1,500. The benefits of this scheme cut out when individuals earn more than $58,000.  
 
“Superannuation is an opportunity, for people of all income levels and for those who made this contribution last year also received a bonus in this year’s Federal Budget with the government announcing it would double the amount the Government contributed in the 2005-2006 year. 
 
“With recent external factors impacting on the finances for many Australians including recent rate rises and increasing petrol prices, the end of financial year along with recent superannuation reforms make this the ideal opportunity for many to take control of their finances. A licensed financial adviser can provide the tailored and comprehensive advice to ensure that Australians are ‘Financially Fit’ now and in the future, ” Mr Elvy concluded.