How to audit all your personal finances

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors
, updated on November 25th, 2021       

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Do you often ask yourself, “where does all my money go?” If you’re on a good salary and consider yourself “well off,” your personal finances can still be out of whack. You could be spending too much on goods and services you don’t need; or make savings in critical areas. If the job seems too big, don’t fear: we have a step-by-step guide to show you how to do an audit of your finances.

Get your credit report

To know where you stand with banks and lenders, you should get a copy of your credit report. This will come in useful later, if you decide to consolidate debts or take out new credit cards (we’ll explain in detail later on in the post.) Your credit report lists your last seven years of credit applications and defaults.

Defaults are failures to pay a bill or loan repayment after 60 days. You should get your credit report because it will show you if a bank or utility company has given you a strike on it by mistake. Credit reporting companies only tell you what’s on there; they have no power to fix mistakes. This will also show you your habits when it comes to paying back debts in full or on time.

Look at current income and expenditure

Now you know your history, it’s time to look at the present. Figure out where your money goes using an itemised list. Your bank statement is a good place to start.

If you have a poor record of paying debts back, focus on shifting more income toward servicing debt. At any rate, you should create a budget around major product or service areas. Utilities, transport, food, grooming, luxuries, going out, and so on. If you are spending too much on luxuries, rein it in. If you spend more on Uber than an equivalent car loan each month, it might be worth considering buying a car. If you don’t use all your calls or data per month, see if you can get a cheaper phone plan. Death by a thousand cuts is the best strategy when you want to kill debt.

Consolidate or reduce debt

According to the Organisation for Economic Co-operation and Development, Australians have the highest ratio of debt to income in the world, at a whopping 212%! If you have high amounts of debt from credit cards, personal loans and other loans, talk to a financial professional about consolidating your debts into one loan. This puts you on top by paying off one loan instead of several at varying interest rates. If you aren’t in dire shape, you can make a start by transferring a credit card balance to a credit card with a 0% balance transfer rate. This gives you time to pay off your balance without incurring more debt (provided you don’t spend more on the card!)

Budget and save

Once you’ve made all these changes, create a budget – and stick to it! This is the hardest part of your financial audit. Once you have made the changes, you can break free from debt and start saving your money!

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