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Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.
Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

WE'VE just passed the mid-way point of 2011, and the start of the new financial year offers an opportunity to give your personal finances a quick health check.

Taking a few minutes today to see how your money matters are faring could produce valuable savings through the rest of the year.

If you have a mortgage, take a look at the interest rate you’re paying to check that the loan is still competitive.

Some of our biggest banks have run extensive marketing campaigns over the last few months, advertising cuts in their rates. It’s a step in the right direction but comparison website RateCity says there are over 100 variable rate loans charging less than 7.0%. Many are offered by smaller lenders that don’t have deep marketing budgets – take a look at ratecity.com.au or mozo.com.au for details.

Exit fees can no longer be charged on loans taken out after 1 July, but you could still be asked to pay exit fees on your old loan. So if you do find a mortgage offering a better deal, don’t forget to weigh up the costs of refinancing against the rate savings. That said, switching a loan of $300,000 from a lender charging 7.1% to one charging 7.0% could see you pocket $5,700 in long term interest savings – a benefit that could eclipse any refinancing costs.

Don’t forget to take a look at your everyday account too. Australian households still pay around $500 each year on bank fees, and your everyday account could a key source of unwanted charges.

Plug the gap by switching to a new account. National Australia Bank, Citibank and Suncorp are among the institutions with fee-free offerings. Or ask your financial institution how you could avoid fees with your existing account.

Already in 2011 we’ve seen a worrying number of wild weather events. These have reinforced the importance of having home building insurance, but it has also pushed up premiums in many parts of the country.
Having cover for your home is critical, and rising premiums make it vital to shop around and look for ways to save on the cost of cover.

Organising your home insurance online can cut your premiums by 10% with insurers like GIO. Others, like the NRMA, offer multi-policy discounts of up to 12.5% if you hold more than one type of cover with the same company.
  
If you have private health cover, you may be able to save on these premiums too. Consumer group Choice recently surveyed a wide selection of policies, finding differences in annual premiums of more than $1,500 among top hospital cover. Take a look at the federal government’s comparison service at privatehealth.gov.au to see how your private cover compares on price.

The mid-year point is also a sensible time to review your household budget. If you’ve had a salary increase, aim to save the extra cash, which can easily be lost in regular spending.

These key steps won’t take long but the savings they can produce will make a real difference at a time when many of us are battling rising living expenses.

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

Topics:  clitheroe end of financial year mobbs money



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