A Good Financial Check-Up Can Save You Thousands

This is a guest post from Pauline of InvestmentZen.com

I know so many people who consider themselves frugal, because they don’t spend a lot of money on daily items, such as food or leisure. While that is great, I often notice that these same people just leave their money sitting there on their savings accounts, earning them less than 1% per annum, instead of investing. Now, that’s plain depressing. You work so hard to save a few dollars here and there, and you don’t put the work to grow your savings!

The first thing that shocks me about these self declared frugal people is they often have a mortgage one or two percent higher than the market average. My mother was one such example. She had the cash sitting on her savings account to pay off the mortgage in full, yet was paying the bank interests every month. When I crushed the numbers, because she only had five years or so left on her mortgage, she was “only” saving a couple thousand dollars. Do the same if you have 20 years left on your mortgage, and you might be looking at a mid five figures number! That is a lot of brown bagged lunches!

So how do you prepare for a thorough financial check-up? You will need about an afternoon of your time, which you may claim you do not have, but I can assure you, your hourly rate will end up being much higher than when you clip coupons.

Pull out your bills, and go through them one by one. Is there an add-on that you don’t need on your phone bill? Are you on the best tariff? A quick online comparison will let you know the answers for your phone, broadband, utilities and other bills. If you aren’t on the bare bones package, make sure you are getting value out of each and every option you are being charged for. Otherwise, call your provider and ask them to remove the charge. I call my broadband provider every year and have been kept on the 50% new customer discount for the past 7 years. It takes a 10 minute phone call every 12 months and saves me around $150.

Same thing for your other monthly expenses. Do you get your money worth out of your gym membership? Your magazine subscription? Maybe you joined a sports club but only go once a month, is there a fee per visit instead? If can spend less while doing the same thing, just go for it! Challenge your car insurance, home insurance and other premiums, your cable, even your taxes! You never know, there might be a tax break you are entitled too and not taking advantage of.

Next, let’s have a look at your banking. Do you have credit cards? Is there an annual fee? Is it worth it? Don’t just shrug and assume it is. Write down all the perks you have gotten this past year (cash back, miles, insurance..) and see if the value exceeds that of the membership. Otherwise switch to a free card. Look at the fees you have been charged, such as ATM fees, and see if you can get a card where you wouldn’t be charged. If you have a balance on any card, switch it to a 0% card and make sure you clear the balance by the time the deal expires, or that you switch to another 0% deal.

Finally, let’s cover your investment accounts. Unless you are already investing with a low fee robo-advisor, you are probably paying more than you should in management and investing related fees. And that can cripple your retirement nest egg. The first step is to go through your company’s retirement plan and make sure you are contributing to at least get the full company match. That’s free money you don’t want to pass on. Then, you can invest the rest so you make the maximum contributions to your 401k and IRA for the year. Again, make sure you are getting one of the cheapest brokers of the market. Then, just leave the money there and try not to touch it until you retire.

While that full financial check-up is plain boring, doing it at least once a year can save you thousands for just a few hours of your time. Way better than trying to pinch pennies in my opinion.


  1. Agreed. Sometimes the smallest things can make the largest impact. I just got rid of a line of credit after playing around with it for three years. I realised that I could pay it off in three months and stop paying interest for the next year. So I put all of the funds that I could into it and now it’s gone.

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