Start 2021 with a financial checkup

Start 2021 with a financial checkup

New year, new you, new focus on financial health. Here are a few ways you could look into getting your finances in order in 2021, or in the years to come.

Compare your income to your expenses

Haven’t made a household budget? This could be a good place to start.

Add up how much money you’re taking home on a regular basis, both from your job and from any side projects you may have on the boil. Look at your income per month, and per year.

Then, look at all of your regular expenses – bills, ongoing charges, rent, mortgage payments and more. Again, look at these both per year and per month.

When you compare your monthly income to your monthly expenses, ideally look to see a positive number on the income side at the end. If you’re spending more than you’re earning, you’re putting your finances at risk.

Check to see if there are any recurring expenses in your household budget that you could reduce or cut out altogether to help relieve your budget a little.

Compare insurance cover

Do you have insurance policies in place to help protect your home and contents, your car, or your health? You may be able to get a similar level of coverage while paying less – all you have to do is compare a few different insurance offers.

Keep in mind that some insurances are required in certain financial situations. For example, your car likely requires Compulsory Third Party (CTP) insurance, and if you have a home loan, you may be required to hold a home insurance policy to meet your mortgage lender’s eligibility requirements.

In other cases, you may consider insurance to be an optional expense. If you choose not to take out insurance, you may also want to consider keeping some money aside in case of emergencies.

How’s your super?

It’s easy to forget about your superannuation – after all, you’re not likely to see a benefit from it until you retire, so why would you think too hard about it today?

However, the choices you make about your super today can affect your retirement in the future. If the money in your super fund gets eaten up by fees, or doesn’t earn the returns you were expecting, you may find that you’re more reliant on an age pension when you leave the workforce.

If you haven’t done so already, it’s often worth looking into consolidating multiple super funds into a single account, so you can minimise the fees you’re paying, and reduce your risk of ending up with lost super. You can also compare super funds to look for an option that best suits your needs and financial situation.

Managing debts

Do you have a home loan or a car loan? How about a personal loan or a credit card with an outstanding balance? While some debt may be useful in the right circumstances to help achieve your goals, there’s a risk that too much debt could end up being a drain on your budget and put you into financial stress.

Consider whether you can afford to make extra repayments towards your debts to help clear them sooner, reducing the total interest you’ll pay. One option could be to consolidate multiple small debts into a single loan, so there’s just one interest charge and one payment to manage. Keep in mind that you could still end up paying more total interest on your debts if you consolidate them into a loan with a longer term, even if the interest rate is lower.

You may also be able to refinance certain debts, such as switching your home loan to another lender with a lower interest rate. For credit cards with outstanding balances, you may be able to switch to a balance transfer credit card with a 0 per cent interest offer to quickly clear your outstanding balance before it has a chance to build up interest charges. Just keep in mind that you’ll be charged interest at the full revert rate once the interest-free offer expires.

Seek more advice

While these general tips can be helpful, they may not all apply to your specific circumstances. To get a better idea of what you can do with your money in the new year, consider making an appointment with a financial adviser and/or a mortgage broker. These professionals can look at your finances and make recommendations that are specific to your circumstances, helping you manage your money with new confidence in 2021 and beyond.

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Fact Checked -

This article was reviewed by Personal Finance Editor Georgia Brown before it was published as part of RateCity's Fact Check process.



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Learn more about bank accounts

How can I find bank accounts in my name?

To find ‘live’ bank accounts in your name, you’ll have to ask individual lenders, which involves contacting them one by one and proving your identity each time. To find ‘unclaimed’ bank accounts (those that have been inactive for at least seven years), you can use this website.

How do I open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

How can I wire money to a bank account?

You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

Can I have a PayPal account without a bank account?

You don’t need a bank account to send or receive money through PayPal. However, you do need a bank account if you want to withdraw money from your PayPal account.

How can I close an ANZ Bank account from overseas?

There are two ways you can close your ANZ Bank account from overseas:

  • Call +64 4 472 7123 (toll charges apply)
  • Send a bank mail request via ANZ internet banking

How do I close a bank account?

Closing a bank account is one of those tasks that’s easy to put in the too-hard basket. There are quite a few steps involved, some which may require you to hang on the phone for a while.  

Here’s a handy checklist of items to tick off, so the job gets done quicker. If you don’t do your banking online, the following steps can also be done at a branch.   

  • Cancel any scheduled or recurring payments
  • Update your direct debit details (such as loan repayments) with creditors
  • Export your payee address book (to keep a record of saved third-party bank account details)
  • Transfer the balance of your account (to the new bank account)
  • Close your account online, or by calling the bank or visiting a branch

Can you find your bank account number online?

If your bank offers online services, you should be able to find your bank account number online by logging into your account on your bank’s website and checking your details there.

Keep in mind that each type of account you have with a bank comes with a unique account number. This means if you have a bank account as well as a savings account, for example, your bank account number and your savings account number will be different.

If you don’t have access to your bank account online or can’t login, you should be able to find your account number on a mailed bank statement, if you have one.

Alternatively, you can call your bank’s customer service number or visit a branch to retrieve your account number.

How do I open a bank account for a baby?

If you’ve just welcome a new baby into the world, congratulations. Opening a bank account for your child can be a wonderful first gift.

Before you can open your child an account, you’ll need to have a birth certificate or passport for your baby.

As the parent or guardian, you’ll also be listed as a joint holder on the account. This means you’ll need to have proof of your identification and address (a driver’s licence, passport, birth certificate or Medicare Card).

Many banks and credit unions offer baby banks accounts. Usually, you can apply online; otherwise you can head into a local branch or office with your documents.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.

Can I find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.

Can you open another account at the same bank?

Yes, you can open another account at the same bank if you already have an account there, but some banks place a limit on how many specific accounts you can open.

Generally, though, it is possible to have more than one everyday account, one personal account and one joint account, or have different types of accounts – such as a transaction account and a savings account.

Keep in mind that some bank accounts come with fees, so you could be charged twice for having two types of the same account at the same bank.

Also, if you have more than one high-interest transaction account at the same bank, only one account will be able to earn the highest rate of interest.

Can foreigners open bank accounts in Australia?

Many Australian lenders allow foreigners to open bank accounts in Australia. Often, this can be done before you arrive in the country – with no Australian address required. When you get to Australia, you can pick up your debit card, using your passport as identification.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.