Are your finances in need of a spring clean? Well this week is MoneySmart Week in Australia. We give you some inspiration to get in and tidy up those loose ends with your money and also your credit file – with our 7 ways you can be smarter with your money.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

MoneySmart Week is being held 2-8 September in Australia. It has some major Ambassadors, including our Governor-General Her Excellency Ms Quentin Bryce AC CVO and money commentator Paul Clitheroe.

MoneySmart Week is an independent, not-for-profit national initiative promoting the importance of financial literacy. The MoneySmart week website explains the importance of financial literacy:

MoneySmart Week 2012 includes:

• A call to action for all Australians to take the next step in their financial health: ‘Do a Money Health Check’.
• A National Awards program to recognise outstanding achievements in financial literacy.
• Promotion of existing money management programs, tools and resources.
• A range of special activities and events in workplaces and the community.

Why is financial literacy important?

Financial literacy is about understanding money and finances and being able to confidently apply that knowledge to make effective financial decisions. It affects quality of life, opportunities we can pursue, our sense of security and the overall economic health of our society.

To find out more about financial literacy, visit www.financialliteracy.gov.au

Do you consider yourself smart with your money? Many of us do I am sure, but are we always completely on top of everything? You can check how you rate by taking part in the Money Health Check – an online questionnaire to test how savvy you are with your personal finances. We would encourage everyone to get in and do the Health Check or at the very least, dust the cobwebs off those financial documents and make sure everything is in order.

We have devised some reminders for getting your finances together:

7 ways to be smarter with money this spring

1. Make a money ‘map’ to ensure you are aware of what you have, what you don’t and what you owe. This is the best way to be clear you are living within your means. By doing up a money map, you will have the benefit of knowing where you can squirrel away extra cash to help pay off any debts faster – you may have never known you had that extra money available without creating a budget.

For help with putting together a money plan ASIC’s MoneySmart website has a great budget planner. The Victorian Government’s Money Help website also has some great tips.

2. Make debt reduction a priority. Any extra cash that comes your way would be well used by reducing debt – especially those debts where the interest rate is high.

3. If you are able to, put extra onto your home loan. Increasing your mortgage repayments even slightly, can see you cut years off your home loan

4. Make sure every bill will be paid on time. This can come down to organisation as much as funds. With new credit laws on the horizon meaning lenders will be recording bills that aren’t paid on time as “late payment notations, it is advisable to get into the habit of paying your bills well before the due date every time to ensure you don’t miss one, and threaten your credit file health and ability to obtain credit  in the future.

Bills missed past 60 days will mean your credit file is defaulted and you will face 5 years of bad credit – so it is absolutely essential to get repayment schedules right.

5. Assess your insurances – are they the best plans for your needs? Are they accurate and up to date?

6. Check your credit file – take advantage of your free annual credit report. A free copy of your credit report can be obtained from one or more of Australia’s credit reporting agencies – Veda Advantage, Dun & Bradstreet, and Tasmanian Collection Services (if in Tassie). Your free report will be mailed to you within 10 working days.

When you get your credit report back, here are some things to check for:
-Check your name is correct
-Check your date of birth is correct
-Check your driver’s licence number matches up
(If any of those things are not correct – you may be vulnerable to identity theft or mistakes on your credit report).
-Check your address history is correct
(If there is an address you don’t recognise on your credit report – this could also mean you may have been a victim of identity theft, or mistakes have been made in credit reporting where credit has been issued to your credit file incorrectly).

-Also assess each credit entry and make sure it is correct.
Are all the credit enquiries initiated by you? This is one of the first signs of an identity theft attempt.

If you have a default – should it be there? Is it yours? Is it fair? If a default is deemed unlawful, it may be required to be removed by your Creditor.

There are a number of reasons why a default could be unlawful – including errors, mistaken identity and incorrect details as well as unfair listings and listings where an incorrect amount of notice has been provided to the client.

For help with ordering your free credit report, and also repairing bad credit which shouldn’t be there, or if you just want to see whether you qualify for credit repair – contact a MyCRA Credit Advisor on 1300 667 218 or visit our main site www.mycra.com.au for more information.

7. If you’re throwing out any old papers – make sure you shred them. Your financial security is paramount, and the amount of personal information on many of our financial documents could be enough for a fraudster to go about trying to steal our identity. Unfortunately there have been cases of crooks sifting through rubbish to find this kind of information in order to piece together enough to go about requesting replacement copies of your identification. This gives them a ticket into your life – your bank accounts, your tax and potentially your credit rating. Fraudsters have been known to take out loans in the name of their victims – leaving them with debt and a damaged credit file.

The process of fixing bad credit after identity theft can be complicated. In some cases it has taken years to put right. So buy a good shredder, and cross-shred every piece of identifiable information before you throw it away.

Why spring is a good time to take stock of your money…

It’s tax time. If you are due a refund – you will then know the way to make the best use of your return. Likewise if you are expecting a tax bill – you will know where you might be able to skimp to come up with the extra money you will need.
It’s almost Christmas time. If you want to budget well for Christmas – you can start now.
• It’s transfer time. If you know you will changing jobs; moving interstate or downsizing jobs you can budget for any extra expenses that will ensue.
• It’s almost holiday time. If you want a holiday after Christmas, or you want to take time off with the kids in the New Year you can budget this in as well.

For the same reasons above you may also need to BORROW money and this is why checking your credit file and alleviating any inconsistencies is important well before you may need  to apply for credit.

Basically it is ‘finance time’ and if you can allocate space in the spring time every year that you can dedicate to making sure your finances are as they should be – then you will be on your way to being savvy with your “everyday money” every day of the year.

This information is intended for general purposes only and should not constitute financial advice nor replace seeking help from a professional financial adviser.

Image 2: smokedsalmon/ www.FreeDigitalPhotos.net

Image 3: David Castillo Dominici/ www.FreeDigitalPhotos.net