Kochie’s 5 Step Financial Fitness Challenge

Just like a good diet and regular exercise are vital to your personal wellbeing, your finances need regular attention to keep them performing at their best.

Lib and I have laid out a simply 5-step financial fitness challenge. Over the next week, we want to see how many things you can cross off the list.

By the time you’re done, we guarantee you’ll be feeling more in control about your financial situation. Sound good? Let’s get cracking.

1. Set up a budget

A solid budget is the cornerstone of your financial fitness.

Sit down and accurately list your monthly income in one column and expenses in the other. Don’t forget about irregular charges like electricity bills, and make sure to list your savings as an expense to keep yourself accountable.

After that’s done, subtract your expenses from your income and see what’s left. If you’re in the red, it’s time to start making changes.

2. Save more of your wage

Set up an automatic debit which kicks in on pay day and sweeps 10 per cent of your salary into a high interest savings account.

You’ll be amazed at how easily you will adjust your lifestyle to function on the remaining 90 per cent of your salary, and you’ll be equally amazed at quickly those regular 10 per cent contributions grow to something substantial through the magic of compounding.

Battle of the sexes… which gender is the best at investing? More at moneysaverHQ

3. Ditch bad debts

If you have bad debts like credit cards, now is the time to take control.

Stop simply paying the minimum and divert as much money as possible to paying them off. If you have savings, consider using them to pay off bad debts… they’re not earning as much as the interest you’re paying.

If you have a credit card you can’t seem to shake, look into balance transfer deals where you pay a low to 0 per cent interest rate for a defined period.

The key is to put a plan in place to pay off your debt within the interest free period, and be disciplined to not spend any more on the card.

4. Pay less for financial products

When it comes to financial products, paying fees and premiums whenever they fall due can become a reflex action. But in such a competitive space, simply accepting the fees you’re being charged means you’re missing out.

So challenge four is to make a promise to yourself. The next time a bill comes due or a fee is charged on one of your financial products, rather than simply paying it we want you to stop and check whether there is a better deal on offer somewhere else.

5. Lock in 15 minutes a month

You’ll be glad to know your last task is a simple one: we want you to commit to locking in 15 minutes every month to review your finances (make sure to do it with your partner if you have one).

That’s it… we said it was easy. We find 15 minutes is more than enough time to review your budget and spending, plan for upcoming bills and review how you’re tracking against your debts.

If you want to take your finances to the next level, take a look at our 4 Week Money Makeover. We will show you take control of your money step by step, with practical video lessons, tools and calculators, access to financial experts and more!

Financial health is just the same as personal wellbeing, says Brenton Tong

One of our favourite parts of the Money Makeover is Ask the Expert, where we put your questions to a team of financial gurus.

Our experts are leaders in their field, and provide a unique perspective and insights into everyday financial problems… and we’d like to help you get to know them, starting with Brenton Tong, partner and Head of Strategy at Financial Spectrum.

Brenton’s been in the advice business for 17 years, and has a unique take on what it means to be a financial adviser. We sat down with him to find out what makes him tick.

KMM: Welcome back Brenton! Let’s start at the start… how did you get to where you are?

I stumbled into financial advice way back in 1998 – completely by accident. I was at uni studying accounting and law. I applied for a job in investment management, but instead they referred me to a financial planning firm. I was twenty at the time, and thought I may as well have a crack at this. I haven’t stopped since”.

KMM: 17 years later, is it fair to say you stumbled into your dream job?

“I’m very mathematical and very analytical, but I also love people and the psychology behind what motivates us. I guess marrying the two together is the perfect job.”

KMM: What is your philosophy when it comes to financial advice?

“Advice is a very personal thing for me. Numbers are very straightforward. The key difference between numbers and advice is helping to identify what the numbers actually mean for the individual.

So first I try to work out what my clients value the most. Then it’s a matter of looking at where they are now and what they need to do to get from A to B. I simply point them in the right direction, and help them to do the right things at the right time for the right reasons. It’s the benefit of foresight.

Financial health is the same as personal wellbeing. There’s no quick fix to be healthy, but if you eat well, exercise well and don’t drink too much, on the balance of averages you’re less likely to have issues.

And similarly, you don’t need to be in the next IPO or get in early on the next renovating boom to become wealthy. Get a plan, be consistent.”

KMM: Can you tell us a bit more about Financial Spectrum?

“I’ve never worked for a bank or large organisation. As a partner in a small firm, when I’m talking to people it’s a case of ‘well you need a financial solution that looks like this’.

And if there is a need for it, we can do it – whatever financial challenges a person is having. We can provide advice on investments and insurance of course, or bring in other experts like a family lawyer, commercial solicitor, private banker or a buyer’s agent to solve a problem.

I recently had a meeting where we spent the entire session talking about everyday bank accounts. The customer had 11 different bank accounts and wanted to simplify how they did their banking.

Or another client’s dream was to build a farm where immigrants could live and work and build up their skills until they are ready to head into the community. He needed a couple of million to kick that off. Others want a Ferrari and water views. Everyone is different.”

KMM: Ok, the question on everyone’s mind when it comes to financial advice… what is your view on fees?

“There’s no denying fees have been a massive problem in our industry.

Our approach is pretty simple however, and quite rare. Our clients pay us a flat fee, and we tell them what they should be doing. It’s near impossible to find other advisers who do this.

Even so called independent advisers still do the same stuff as advisers aligned to a bank or other financial institution; they just do it independently. We don’t sell products; we will sell you a solution.”

KMM: So does that mean you don’t charge commissions?

“No we don’t charge commissions or percentage based fees in any instance, even on insurance which is typically highly commissioned. We charge an ongoing flat fee based on the depth of the relationship with our client.”

KMM: In your view, what is the benefit of seeing a financial adviser?

“Go to a financial adviser for the same reason you would do any form of improvement… education, health, anything at all. You want to make your life better. And unless you can take an impartial view of your life and your money, a good financial planner will find some sort of improvement. Just like any professional.”


Brenton Tong is Head of Strategy at Financial Spectrum. You can follow him on LinkedIn.