End of Year Checklist: Review Finances and Celebrate Achievements

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

End of Calendar Year and End of Financial Year are Perfect Time to Review Finances

The end of the years are the perfect times to review progress towards your goals for 2021 and set new plans for the next. Use this checklist to make sure you are on top of your financial goals and take a moment to appreciate achievements from the past year.

Record your Net Worth

Monitoring your net worth can confirm you are moving in the right direction. It is motivating to see progress set out in a spreadsheet or graph, particularly over a few years. I have mine recorded since 2009.

In order to update your net worth, you will need to spend time logging into each of your accounts, including superannuation and possibly estimating the value of properties.

Net Worth = Total Assets – Total Liabilities

The easiest way to monitor this is to record it in an excel document, save it to the cloud.

Review Finances: Income

How much income did you take home this year? If your income has increased, did you direct this extra cash intentionally towards savings, investments or effective spending?

It’s just too easy for this money to disappear without any appreciable increase in life enjoyment. To make sure I use these small incremental increases in income, I correspondingly increase my direct debit towards ETF investments.

Review Finances: Expenditures

Time to review your outgoings for the year 2021. You can use an expense tracking app or just download your bank account data and manually categorize it into an excel document. What are your top expenditure categories? Is your spending aligned with your values? Is there still any wasted spending you can identify?

How do you want to adjust spending for 2022?

Review Finances: Tax

I find I don’t find out exactly where I stand until I have received my tax returns, division 293, and excess concessional contributions bills (Apply to income > $250,000 or concessional contributions > $27,500). If you didn’t get a chance to review everything at end of the financial year, now is the time.

Salary Sacrifice & Salary Packaging

How much tax did you pay this year? Do you need to stop procrastinating and set up salary packaging and salary sacrifice.

Varying Tax Witholding

If you are a great money manager, an employee, and own property investments, consider varying your tax withholding. If you are expecting a significant tax return, instead of waiting to receive it at the end of the tax year, you can request your employer withholds less pay each month. You could increase payments into your mortgage offset or into an automated investment.

Review Finances: Charitable Donations

Do you have an intentional giving plan, or are you just randomly donating when the requests come? Are you confident you are donating effectively? Are you happy with the amount or would you like to increase your annual donations next year?

This is such a personal area, but I love the way Effective Altruism explains how and why they think certain charities deploy your dollars with maximum positive impact. Aussie Firebug just interviewed the chairperson and board member of Effective Altruism Australia. You can find the podcast episode here.

Get Mortgage Ready or Review Your Mortgage

It’s sensible to check your credit score every year regardless. But it is especially important if you are planning to purchase a home within the next year. Your score impacts your ability to borrow at all, the limit you are allowed to borrow and the interest rate charged. You want banks to see you as a sure thing.

If you are lucky enough (!) to already have a mortgage, check this annually to make sure you are paying a competitive rate and are utilising an offset if appropriate.

Review Super

You should at least log in to your account and check that your super payments have been received. If you haven’t done this in the last 5 years, review whether you are happy with your super fund.

Again, if you haven’t reviewed your investment allocations in the past 5 years it’s time to check in. Is your asset allocation aggressive enough to hit your goals, whilst conservative enough for your volatility tolerance and age?

Maximize Concessional Contributions

Many younger people are hesitant to put extra into super, due to the risk of changes. This is a valid concern, but I don’t think the risk warrants throwing money away.

It would be mad not to meet the criteria to seize any employer super bonus contributions. You may wish to consider salary sacrificing to top super contributions to the full concessional limit (currently $27,500).

You can now catch up on concessional contributions for up to 5 years. If you are expecting to receive a large salary boost within the next 5 years, you may wait until then to maximize concessional contributions.

Review Savings & Investments Outside Super

Reviewing asset allocations every 5 years is appropriate, as performance is inevitably variable over time. A rubbish year in 2021 may be followed by a meteoric year of returns in 2022.

You may need to rebalance your portfolio. If the end of the calendar year is when you have planned to do this, take time to make sure it is done in the most tax-effective way. Selling investments inside super may be a more tax-effective way to rebalance your total investments.

Check Professional Development Funds

If you need to use or lose a professional development allowance each year, twice a year reviews are a practical way to make sure you are on track. Don’t let it go to waste!

Review Insurance

We should all probably review our personal insurance needs every year.

Income protection has become incredibly expensive this year, with routine ~75% increases for those of us with a “level” agreed value policy. The newer policies, with far less favourable terms, are not cheap either.

Review your insurance needs. Think through worst-case scenarios. If each household income earner died, was permanently unable to work or unable to work and needed ongoing care.

Each year considers if you can reduce your insurance, or increase your total permanent disability insurance to provide more affordable cover in case of disaster.

Review Goals for 2021

Did you set financial goals for 2021? Are they written down somewhere? In the chaos of the year, it is easy to forget about your goals. Find them and review them. How much did you achieve? Are the goals still relevant or did circumstances or aspirations change since last year?

What financial goals would you like to set for 2022? They should be based around your broader life goals, rather than arbitrary dollar amounts.

Are you Funding Your Carpe Dium Goal?

Don’t delay gratification forever! What is that “One day” you always plan to do, but never get around to? Write it down. Set a date and work out a plan to make it achievable! If not now, then when?

Life and Finances End of Year Review

Start the new year with a firm plan, based on your goals for living your best life. Spend a little bit of time reviewing your finances. Important financial decisions need regular scrutiny and adjustments to accommodate your changing situation and goals.

Hoping for a fabulous 2022.

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

How to be a Black Belt Awesome Money Manager

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.

Being financially successful begins with learning to manage your money effectively. Trying to invest before you can effectively manage income and outgoings to save regularly is like trying to run before you can walk.

An awesome money manager squeezes every drop of value from each dollar. This allows him to annihilate debts, fund dream (stretch) goals and purchase his most precious resource, time.

We weren’t born with these skills, and very few were taught them as kids. Most of us learned along the way, often through screwing up.

Have you racked up a load of consumer debt on those MUST HAVE items (that you now can’t quite remember)? Have learned these lessons the painful way, or plan to skip this life lesson by reading about my screw-ups instead?

Like most things in life, there are levels of success. How far are you towards black belt money manager status?

White Belt Money Manager

– Know Your Income & Paying Bills

How much cash do you take home per year? Are you paying all your bills without incurring late fees?

Your Mygov account can tell you how much you have earned this year so far. You will also be able to see how much you earned last financial year, along with the tax paid. You should know the yearly amount and monthly net income.

Managing your money well enough to pay off debts and bills reliably is the first step in financial adulting. If you are not managing, drastic immediate change is needed to avoid a nasty outcome. Ask a family or friend to help you (not with a handout), borrow a copy of Barefoot or contact Financial Counselling Australia.

Yellow Belt Money Managers

– Know Your Net Worth and Which Direction it’s Heading

List all assets and liabilities. Calculate your net worth.

Total assets – liabilities = Net Worth

For Example:

House worth $700,000Mortgage outstanding $500,000
Superannuation $100,000 
Term Deposit $5,000Credit Card Balance $3,000
Total assets = $805,000Total liabilities= $503,000
Net Worth = $302,000

A new graduate is likely to have a negative net worth. But if all that debt is productive (a student loan leading to a good career, a mortgage of a good quality property), good financial habits will result in a positive net worth soon.

If the net worth is positive, but the liabilities are depreciating assets (cars, maxed-out credit card), the situation may well get worse without a change in financial habits.

The initial net worth is not that important, but the components, and trends over a few years are. Monitoring your net worth each year can tell you if you are heading in the right direction, and provide some positive reinforcement.

Note that improvements in net worth will initially be pretty small. If you are practicing good habits as a money manager, this will increase dramatically over the years so hang in there!

Orange Belt Money Manager

– Understand How Much you are Spending

No judgment. This is probably going to be painful. Many people avoid facing up to their spending for years.

Most of us spend more than we realize or intend to.

It is important to face the music. There may be forgotten subscriptions and other expenses which provide you no value, that you can cancel without any effect on your lifestyle!

Spend some time looking through your last 3-12 months of bank account statements. Using an excel document or expense tracker, note the different spending categories and your spending in each.

Pocketbook is free and a great app for tracking outgoings. It can automatically track your expenses into an appropriate spending category, making it easier to see where you spend, and waste resources. But if you make a lot of ATM cash withdrawals, the type of expense will obviously not be recorded. You will probably need to manually recategorize outgoings to ensure the data is accurate.

There are also some security issues with expense trackers, that can be overcome by manually uploading your banking data instead of sharing log-in details.

Manually entering expenses into an excel document for a 3 month period is the most practical for those with only a single account. Those with multiple accounts and credit cards may choose downloading data from each account and upload into Pocketbook or a similar program.

Green Belt Money Managers

– Have a Short Term Emergency Fund Saved Up

Financial green belts are in the great position of netting letting their bank account run dry. Having enough cash to get you out of strife in a short-term emergency is a major milestone. The car breaking down is now an annoyance, rather than a crisis.

– Have a Plan for Longer-Term Emergencies

At this stage, you also have a plan in case a longer-term emergency occurred. If you were out of work for 3 months how would you survive?

This can include insurance, cash savings, a list of expenses you could cancel (but don’t currently want to), and even a flyby points balance that will cover a few weeks’ food.

There are few expenses more painful than an insurance policy. You pay these premiums hoping they will be a complete waste of money!

Insure against catastrophe. Life insurance, income protection, and house & contents insurance are critical for those with dependents, and many without. Check what insurance you have and whether this is adequate every few years (or with marriage, childbirth).

Reduce costs by increasing excess/waiting period, and hold onto any agreed value insurance product until you don’t need it anymore.

Make sure you notice when you can finally self insure. Once you can cover the cost of the catastrophe you are insuring for (even at a pinch), it is probably time to cancel the insurance.

Blue Belt Money Manager

– Have an Organised Banking System

You should never pay a late or overdrawn fee. You need to spend some time thinking about a system that will work for you. Here are some options.

Automate all your upcoming bills, credit card payments, and everything you can. Setting up direct debits to pay bills is a bit of a pain, but will save time every month for years to come. It will also eliminate the risk of an overdue fee, or black mark on your credit record.

Set up a direct debit with your credit card to pay the full balance every month automatically. If money is too tight to do this without worrying about becoming overdrawn, cut up the credit card, and close the account.

– You are Regularly Saving Money by Spending Less than you Earn

Blue belt financial managers have managed to create a gap between their income and expenses. This gap allows regular savings to occur. This is a huge step, one that many struggle to achieve.

At this stage, you save up for significant Purchases that decline in value over time (TVs, cars, other consumer goods). Delaying gratification, by saving up can build anticipation and allow us to enjoy the product or experience even more!

Blue belts can resist or delay impulse purchases. Most of us have way too much stuff. A delay (from 48 hours to 30 days) between the urge to purchase and actually punching your card details will help you buy things you really want.

Blue belts also plan ahead for irregular, semi-predictable spending such as replacing old appliances and paying for car service and tyres.

They are also committed to shopping around for the best deal for purchases, squeezing more value from each dollar. Blue belts bother to get quotes for insurance renewals and avoid the lazy tax whenever they can.

Blue belts don’t let any small increase in income, tax cut, or reduction in spending go to waste. That money is diverted to savings automatically. Even tiny increments really add up when you do this every time a little regular cash is freed up.

Find out more about how to save more money.

Purple Belt Money Manager

– Minimize Tax (Legally!)

As you earn more, you will pay a higher proportion of your gross income in tax. I now pay more in tax than all our other annual costs combined! Even a small saving in tax can be enough to fund a regular investment.

If you pay 30% or more in tax, salary sacrifice, and package. Utilize spousal super contributions and super splitting if you are part of a couple with unequal incomes.

Get organized for tax time to ensure you claim all deductions.

Think about the tax implications of investments. You shouldn’t make your investment decisions based on tax, but if there are two similar options but one provides a tax advantage, this should be your favourite.

Brown Belt Money Manager

– Have Financial Goals & a Written Financial Plan

Brown belts are really thinking long-term. Instead of saving up just to spend, these are dreaming up goals and then working out how to achieve them.

What do you want to achieve in the two years, 10 years, and during your lifetime?

You need life goals before you can set financial goals around these.

There always seem to be more goals than the cash available! Prioritize which are the most important, and make these financial goals. The others can be added back if your financial situation changes. And it often seems to, once you become an elite money manager.

Then make a written financial plan. Start with the long-term goals and work backward. Review it every 5 years, or with major life changes.

Some will need professional, personal financial advice. Take care to choose the financial advice provider carefully. We don’t all have to plan without help, but you have to invest enough time and energy to understand your plan.

Red Belt Money Manager

Buy Assets > Liabilities

You choose what to do with the money coming in. Most people spend their cash on liabilities – cars, boats, iPhones, and laptops that lose value from the moment of purchase.

How much money have you directed towards building assets? These increase in value over time, eventually replacing your paycheck with passive income.

To be a good money manager you want to start directing income to build assets.

Invest regularly and automatically to improve your ability to stick with the game plan.

Black Belt Money Managers

Black belt money managers have achieved all the above. They regularly save and invest towards written goals in accordance with their written financial plan. Plans are in place in case of catastrophic life events, and an adequate emergency find. They either avoid debt or only utilize productive investment debt and pay credit cards off in full every month, reaping the benefits of free insurance and frequent flyer miles.

Black belts are thinking ahead by monitoring their credit record in case of future borrowing needs. They will get the best rate and maximum loan as banks know black belts are ultra creditworthy.

Black belts purposely surround themselves with positive influences and role models, either in real life or virtually. It’s not uncommon to be surrounded by people encouraging you to blow your cash. People want you to validate their own (often unwise) decisions. It can be isolating to be the only one trying to make smart financial decisions.

These ultra money managers listen to podcasts, read books, and subscribe to finance blogs to continue to grow knowledge and find more ways to improve. Finding support through a similarly minded friend, or an online group can help black belts stick to the plan over the years.

Black belts are careful to circle back and make sure they have a good balance between spending and saving for themselves, their spouse, and their kids. They know what really matters, and that money is just the way to achieve these goals.

Black belt money managers move away from an All or nothing mindset to continual growth. They understand everyone makes slip-ups, and occasional overspending is the not the end of the world.

Ultra money managers are usually keen to pass as many of these skills to their children. By the time these kids leave the home they have a far better understanding of finance and money management than we did, and hopefully, go on to design and live their ideal life.


Money management is an essential skill, with many levels to achieve. Where are you on the colour belt scale?

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

Money Self Sabotage: How to Get out of Your Own Way

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

Are you struggling to make any positive financial progress?

Reading finance blogs with good intentions, but never actually making the behaviour change? Self-sabotaging behaviour is a common problem with money and in other areas of life.

Identifying your self-sabotaging behaviours, and understanding them can help you overcome financial self-sabotage. Get over that plateau and reboot progress towards your money goals.

What does Self Sabotage Mean?

Self-sabotage is when a person acts in a way that damages their own well being. It is a common problem people encounter when working towards financial, fitness or academic goals. Some aren’t even aware that they are self-sabotaging.

Have you ever found yourself:

  • Turning on an addictive Netflix series when you have an important assignment due the next day?
  • Indulged in a six-pack of beer despite vowing to start losing weight just hours earlier?
  • Deciding you need to get your finances under control, then binge shopped for non-essential items online?

Most of us have self-sabotaged by behaving in a way that takes us further from our own important goals.

But why?

Why do People Self Sabotage?

There is a multitude of reasons for these destructive behaviours. Sometimes it is simply that the self-sabotaging behaviour produces short term pleasure, which trumps the threat of associated but delayed harm. Delayed gratification is hard.

  • The doughnut will taste really good for the next 5 minutes. You won’t notice an improvement by not eating the doughnut (and it will take quite a while to reap the benefits of resisting the doughnut daily).
  • You know you need to save more money for a house deposit. But all your friends are going out for dinner. It will be really fun, and you don’t want to miss out. You will eventually enjoy owning your own home more. But the goal seems too far away to compete.

There are also deeper, more subconscious reasons for self-sabotage.

Imposter syndrome

Everyone has heard of imposter syndrome now. Many of us have suffered from crippling self-doubt that undermines confidence.

Being successful in knowledge-based work is commonly associated with imposter syndrome. Have you ever thought that your success in life was just due to good luck? Felt like a fraud and tried to keep this hidden?

This is imposter syndrome, and it tends to affect high achievers, and women more than men.

Imposter syndrome can occur with money too. Perhaps you grew up in a family of modest means. Financial success doesn’t feel real. It is easy to feel that we somehow got lucky with money and don’t deserve to have more.

Incredibly intelligent professionals often bury their heads in the sand, because they don’t feel they have the knowledge or ability to make financial decisions such as investing. If you can reach the peak of your chosen career, you can certainly set financial goals, and make a simple plan to reach them!

Self Sabotage due to Fear

Fear is a big factor in self-sabotage of all sorts. Fear of failure can lead to money self-sabotage. A certain amount of this is helpful, as it will hopefully help you avoid giving your money to a conman (and there are plenty around). But those consumed with fear of failure will never invest.

Stockpiling cash in a bank account earning 1% is insufficient to provide for retirement. Over time, the value of savings is eroded by inflation. Minimizing risk needs to be balanced with taking some investment risk in order to achieve your financial goals.

Fear of investing being too hard, or that you will fail because you are “no good with money” is also a common issue. Some people fear not being able to reach all their goals as they may be unrealistic. Choosing to stick their heads in the sands, they risk not reaching even their most important goals by not taking charge of their finances.

Fear of financial success can also lead to self-sabotaging behaviours. If your background is humble, the thought of “becoming rich” can be uncomfortable.

Wealth is often associated with evil in society, although of course money is neither bad nor good (but can be used for either). Savers can fear other people judging them for saving money or showing an interest in personal finance. They can also fear social rejection due to a change in financial circumstances.

Fear of change can also put people off taking the first step. We love to form a little rut. It’s comfortable, safe and familiar. Any change in habits needed to save more money and follow a financial plan tends to, at least initially, be uncomfortable. Suddenly needing to budget spending instead of continuing to spend each paycheck with abandon, can lead to fear of deprivation.


As Australians, we already live incredibly fortunate lives. As higher-earning Australians, we have won the life lotto from a global perspective. Inequality is increasing throughout the world. Over 700 million people live in extreme poverty worldwide.

You may feel guilty about the lucky hand you were given, even though you took that good luck and worked hard to make the most of it. You and I know we were born with advantages that gave us a huge head start.

This can lead to great things, including paying it forward in charitable donations and creating a fairer, kinder world. But where this guilt can be really unhelpful is when it is subconscious and leads to self-sabotaging behaviours. If you feel guilty for accumulating wealth, but don’t spend the time examining your feelings, you may waste savings with silly choices. Spending savings on choices that don’t provide you value, and don’t make the world a better place is a terrible waste.

Guilt also commonly works in the opposite direction. It is easy to get obsessed with saving money, to the point where your good habits become destructive. After you are on track to meet your financial goals, don’t let spending guilt stop you from living your dream life. Whilst still in the accumulation phase, a “fun money” account is really helpful here, in providing permission to live a little on your journey to financial freedom.

Self Soothing Behaviours

Life can be stressful. Shit happens, regularly to some people. It is natural to want to “treat yourself,”, particularly after a bad run of events.

Take care to note the difference between self-care and self-soothing. Self-care is important. It is looking after your body, mind, finances and relationships to gift yourself the best life possible, under your circumstances. Self-soothing activities distract you from whatever is troubling you and provide short-lived relaxation.

You may drink a bottle of wine to feel better after a terrible day at work. You know that amount of alcohol in one night is bad for you. This is self-soothing and not self-care.

Obviously used repeatedly as a mental crutch to deal with life is a slippery slope into alcoholism and complete life destruction. But long before that, smaller negative consequences occur such as a hangover, weight gain and lost productivity.

There is absolutely nothing wrong with treating yourself to a massage after a stressful week. If it is in your fun money budget, you should go ahead and enjoy it. But it is not likely to have a long-term effect on your health, wealth or mental wellbeing.

Self-care is taking steps to take better care of yourself. These activities often don’t provide immediate rewards, but over the long term provide a far better return than self-soothing activities. Going for a run often doesn’t feel like self-care. To begin with, it can feel like torture! But over time, weight loss and improved fitness often translate to higher energy levels and feeling better. Eventually, you even start to get a natural kick from those endorphins when you actually exercise.

The answer to financial stress is clearly not spending money on something that makes you feel better in the short term. That new car smell may boost your happiness for a few weeks during your commute. But if you can’t really afford it, the car loan will leave a longer-lasting financial and well-being hangover.

How to Tell if you are Performing Self Sabotage?

Slow down. So many people spend little to no time thinking about the big things. I think this is a big cause of self-sabotage. If you don’t spend any time working out what your real priorities are, you will never start working towards them.

It is not unusual to hear people stating that spending time with their children is their number 1 priority. Yet they often seem to be striving away from their stated goal by working excessive hours to pay for never-ending consumer purchases and status symbols.

If your children are your top priority, what do they really want and need? Spend some time working it out.

Many others state that money is not a priority, as an explanation for disinterest in financial literacy and investing. It’s great that these individuals don’t worship money.

But often those that claim that money is not important are experiencing cognitive dissonance.

By not looking after their money, they are indefinitely dependent on a wage, trading time for money, whether they like the work or not.

If money is not important to you, what is? Spend more time reflecting on your goals, and how your actions will move you towards, or away from your goals.

Be honest with yourself and try to identify soothing self-soothing behaviours that are sabotaging your finances.

Watch out for Social Sabotage

Even those that love us can sabotage our financial plans. Your friends and family love things the way they are and suffer the same fear of change.

They may also feel challenged, or defensive if you choose to make smarter financial decisions.

Those close to us may try and convince us that bad debt is normal, and you only live once. If struggling to make the minimum repayment on your credit card and working to indefinitely meet minimum repayments is living!

Let these loved ones know you have your own goals, and you are working towards goals that are meaningful to you. You may inspire them to make a positive change too.

How to Stop Self Sabotaging Money Behaviour

Identify how you are self-sabotaging.

Spend some time thinking about what your goals should be your priority. Work out exactly how you are going to get there. Consider the sacrifices that will need to be made, and make a conscious decision whether they will be worthwhile in the long run.

Form a plan. Schedule a regular appointment with yourself (+/- partner) to review your progress, monthly, quarterly or bi-annually. Put it in your calendar with reminders. Make it a priority.

Find a way to remind yourself of your “Why”. Something that inspires you related to your largest goal. It may be a picture of your kids in your wallet, or some words stuck on your credit card (fully paid off home?).

Then it’s time to take your brain out of the picture.

Remove as many temptations as possible. Cut up the credit card you don’t need. Automate everything you can. Pay off credit cards, in full, by auto-sweep every month. You can generally set this up with the credit card company.

Direct debit your planned investments every month (fortnight, or quarter) so you will be less tempted to redirect this money to a self-soothing activity.

Examine negative thoughts that come up. Write them down or talk about them with a friend. Is it classic imposter syndrome or fear of failure?

Confront any guilt you feel about becoming financially successful. If this is an issue for you, plan some ways you could make the world a better place.

Spend some time choosing a charity that you really believe in. Here’s mine. The good news is, that a small regular donation is all you need at this present moment. As your finances improve, you can increase donations as you wish.

Make sure you have some “fun money” put aside to spend regularly, and guilt-free. As long as this is budgeted for, you can spend it on whatever you desire. You will naturally start to prioritise the spending that brings you more joy when as you run short of “fun money”. Get the most fun for your buck!

Set some mini-milestones along the way to your undoubtedly huge goals. It’s a long journey. Like most things, it’s a lot easier to break it up. Take the time to celebrate and treat yourself in some way when you meet these milestones.

For inspiration, here are mine (asterisked are still a work in progress):

  • Out of credit card debt!
  • Positive net worth
  • $1000 emergency fund saved
  • Student loans paid off
  • Home deposit saved
  • 1st investment outside super
  • Hitting double mortgage repayments
  • Paid for a car in cash
  • 1st investment property
  • 1 year of living expenses in offset
  • $1 million net worth
  • Coast FI (for retirement age 60)
  • Home loan fully offset*
  • Lean FI*
  • $1 million invested*
  • Kids education fees saved/invested*
  • Flamingo FI (retirement age 55)*
  • Self-insured for life and income protection (and free of those awful premiums!)*
  • $2 million invested*
  • Financial independence*

Are you self sabotaging? What’s your worst habit and how are you going to break it! Comment below and share your ideas to help others.

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

M&M – The Female Money Doctor Shares her Most Painful Money Mistake

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

Everyone makes some money mistakes. But learning from others is a lot less painful than making your own! I have benefitted from listening to tales from family and friends investing disasters and have confessed my own financial errors for readers, in turn, to learn from.

It is rare people are brave enough to share their financial horror stories. The shame and embarrassment of a huge financial mistake often prevent people from reporting or warning others.  But learning from others mistakes is sometimes more valuable than stories of success.

In the M&M series, I have asked financial content producers to bravely confess their worst financial mistakes. Read these warnings carefully. Learn as much as you can from them to avoid making money mistakes of your own.

Introducing the Female Money Doctor

I’m Dr Nikki, a GP in the UK and a money coach for women. I’m 36, and 6 years ago I came to the biggest epiphany… I was broke.

And for a doctor, this was worrying. What had I been doing with my hard-earned money over the past 6 years?!

This realisation came when I was sitting in a hammock in Fiji (yes I know how privileged this sounds). Whilst taking a break from a stressful career in Obstetrics and Gynaecology, I had flown around the world. I was deciding whether to go back to work in this field or do something else. 

While I was away, I had time to think. And time to watch my money dwindle away to nothing. 

I was in a huge amount of credit card debt, and travelling was just making things worse.

It was at this point in my life that I had had enough of being broke and in debt. I vowed to turn it around when I got home.

I then discovered the FIRE movement, and I was hooked.

After this discovery, I wanted to shout it from the rooftops! So many of my colleagues and patients had money issues. I noticed what a profound effect it was having on their health. It was definitely contributing to burnout, because so many people were working to pay the bills, not to buy back their freedom.

I started The Female Money Doctor blog to help others turn their financial struggles around once and for all, and because I didn’t want them to make the same stupid mistakes I did.

What is your Worst Money Mistake?

I got into a lot of debt in my 20s (this doesn’t include my student loan from medical school). 

This was through careless spending, not budgeting and generally saying yes to everything! It was a fun time, but definitely not something I would recommend.

To make matters worse, I tried to dig myself out of the debt-hole by investing in a property investing course. It promised I would pay off the course, and the debt with just one property deal over the 12 months I was on the course program.

I used more debt to pay for the course to the tune of £25,000, and guess what… it didn’t work. I was in a total of £60,000 after this. The course was way too advanced for the stage of the journey I was at. To be honest, I do feel like I was conned out of this money. They played on my emotions, and it was a mistake made from a desperate position, and it has taken me YEARS to make up for it.

With the benefit of hindsight, were there any warning signs your decision was a Money Mistake?

Yes, I was warned by one of my mentors at the time not to jump into anything too hastily, especially as I needed to borrow to purchase the course. But I didn’t listen. I had my blinkers on and I was determined to go for it. 

With hindsight, the course was not right for me, or for the other 12 people also conned out of the money they paid. 

It was the most I had ever spent on a program (and still true to this date), and I will never make that mistake again.

Is there any way you could have avoided this Money Mistake?

By listening to my mentors and stopping to think things through. I didn’t know anyone who had done the course, so I should have sought out other opinions first from people in the know. Now I realise that I made this decision clouded by emotion. I felt pressured into making a choice quickly, and like this was the only choice I had. If I had just taken a moment to breathe and think, I would have avoided the mistake. But then I made some fab lifelong friends, I wouldn’t have been inspired to start The Female Money Doctor, so it’s not all doom and gloom!

When did you realise that you had made a Money Mistake?

About 6 months into the course when I asked other people how they got into property investing – not a single one of them had heard about who I purchased my course from. They were gobsmacked when I told them.

That’s when the penny dropped.

I also realised that no one else in the course had made a property deal either – except one person, who already had investment properties under her belt and had the network in place, the money in the bank, and the industry insider knowledge to follow through on what was being taught.

How did you bounce back after making the error?

I doubled down on paying off my debt. Using Dave Ramsey’s debt snowball method, I consolidated the rest. I became totally consumer debt free in 2020, and now I’m focusing on building assets to support my FIRE aspirations.

Writing the blog also really helps me, because I feel like if I can just help one person avoid making a desperate decision like I did, it’s all worth it.

Thanks so much for sharing your money mistake, Dr Nikki. It’s so easy to fall for that magic bullet (fake) solution to problems!

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

What is Depreciation?

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

Depreciation has slightly different meanings in personal finance, accounting and taxation. Regardless of the context, depreciation refers to the decreasing value of a good over time. It applies to cars, to home appliances and even to clothing.

Personal Finance Depreciation.

Depreciation in personal finance refers to the amount of money you lose through the decline in value of a personal asset. Assets purchased for personal reasons (not investment or business) attract no tax advantages.

The rate at which each good depreciates varies. Some items depreciate more quickly than others. The commonest example of a depreciating personal asset is your car.

In fact, cars are known to lose so much wealth through depreciation, they are often referred to liabilities. If they come with a car repayment plan, even more so.

We have all heard how a new vehicle is worthless as soon as you have driven it out of the showroom. Cars literally destroy wealth if a consumer buys too much, too new and too early.

A $30,000 car that depreciates to 70% of it’s original value over 5 years will have cost you $30,000 x70% = $21,500 over the five years.

That’s on top of fuel, insurance and registration.

Losing $21,500 every 5 years just to car depreciation is not going to help you get ahead.

There is no silver lining to depreciation in personal finance. Depreciation cannot be deducted if the item is for personal use. It is simply a fact of life that your car will be worthless and less each year until it is virtually worthless.

A key strategy to build financial security and wealth is to spend the minimum possible on vehicles until you have acquired assets that will achieve your goals in the desired timeframe.

Property Depreciation

We are more used to hearing that houses go up in value over time. But the building itself, just like cars, depreciates.

A brand new house is worth less if you try and sell it a year on than when you purchased it. Nothing has that shiny new feel to it anymore. The expected lifespan of the roof, air conditioning units, carpets and boiler has been eaten into. All these things will eventually need replacing at a cost.

What often saves your home from falling in value is the appreciation of the land it sits on. This doesn’t depreciate. There are no deteriorating parts of the land (unless you’re on a cliff!) Nothing needs replacing. Over time, as populations expand in an area that is attractive to a large number of people, the price for the land increases.

The other factor that saves your home from falling in value is any renovations and replacements you put in. Depreciation of the home is still occurring, but you are paying to replace things as they go along, helping to maintain value.

Small Goods Depreciation

Most consumer purchases you make depreciate in value significantly after purchase. If you look into selling your Nick Scali lounge second hand, even after a short period of ownership, it is unlikely you will get much of the original value back.

Some items should theoretically depreciate but don’t. Highly desirable collectables can increase in value over the years as they become more scarce. Watches, cards and pokemon cards come to mind.

To be a successful collectables investor, you need to pick collectables that will increase in scarcity and popularity over time. You are best at keeping it in its original packaging and not using it (or barely). Collectables in mint condition tend to be worth a lot more than those that have been used (and loved).

If you have an area in which you are an expert, then it is possible to succeed with collectables.

Appreciating vs Depreciating Purchases as a Predictor of Long term Wealth

There is nothing wrong with buying a depreciating asset you love. That sports car, fancy watch or brand new home are not out of bounds.

But your timing of these purchases will make or break your financial life. Given your finances dictate the options you have to choose from when life throws a curveball.

Money can allow part-time work, unpaid absences, the ability to help family members in crisis and retirement when you want or need to.

Or your finances can require you to keep working completely dependant on a monthly paycheck to pay the bills. No matter what else is going on.

The earlier in life you can money sorted, the earlier you can afford to largely ignore it.

Big financial decisions, such as the home you purchase and the cars you drive will define your future financial life.

How to Minimise the Effect of Depreciation on your Finances

Let’s start with the most powerful strategy. Home buying can create wealth, or prevent you from building any.

Is the house you will buy on appreciating land, in which case your home is an investment as well as a place to live? Be as objective in this decision as you can. What are the long term capital growth stats for the area?

If you do not buy land that is appreciating at an above-average rate, minimizing your spend on a home is a wise financial decision.

Ideally, spend more on the appreciating land than the depreciating house on it.

With cars (ignoring the rare collectable) you can avoid the sharpest dip in value from depreciation by buying a car 3-5 years old. Keep your cars as long as they are reliable.

I suspect what you may make in appreciating value or a collectible car you will likely put back into repairs and maintenance. Collectible cars seem more of a passion project than a profit-making exercise. And you definitely need to know your stuff!

Again, you shouldn’t necessarily sacrifice having that “dream car”. Especially if this is something you value. But your finances will be more supportive in the future if you can delay the purchase until you have accumulated appreciating assets.

With collectables, my impression is that many people use the idea that something is “collectable” as an excuse to buy a luxury item they can’t really afford but very much want.

Be honest with yourself, if the purchase is for your use, make sure you can afford it and accept it will depreciate with use.

Investment, Work Related and Business Depreciation.

These are all less damaging than personal finance depreciation. In fact, these depreciating purposes are likely to be necessary to earn money. They are a cost of doing business. And the good news is, they often come with a tax advantage, unlike with personal finance depreciation.

Tax Depreciation

The most important concept to understand is that depreciation in your tax return is not just a tax benefit. It is partially compensating you for the loss of value that is occurring in real life.

If you purchase an asset in order to make money, you are entitled to claim the depreciation as a tax deduction. You are still losing value through real-life depreciation, but the ability to claim this on tax lessens the blow significantly.

Tax and real-life depreciation aren’t always equal.

If, for example, you had purchased a new vehicle in early 2020 for your business. Your accountant will use a method of calculating depreciation on this vehicle, and claim this depreciation against your income, lowering your tax burden. But with the vehicle shortage brought about by COVID-19, you may actually be able to sell the vehicle for more than you brought it for!

Property Tax Depreciation

The purpose of depreciation is to estimate the difference between what something is worth and how much it’s being sold for.

When purchasing an investment property, the cost of construction or renovating a property can usually be deducted over 25-40 years at 2.5-4%.

This encourages many to purchase new properties, in order to maximise the deductions. But new houses will depreciate quickly in the first few years because buying new means paying the builders margin. Remember to invest for a return first, with any tax advantages kept to an incidental bonus.

Get A Quantity Surveyor Report

When you purchase an investment property, it is important to contact a quantity surveyor and arrange a report. You need to know the costs of capital works to pass on to your accountant in order for them to claim depreciation. This costs a few hundred dollars (I paid ~$600 in Brisbane).

In an older building that hasn’t had significant renovations, there may not be enough depreciation to compensate for the cost of the report.

Capital costs of a building you purchase with a plan to demolish may be able to claim, discuss with a quantity surveyor before calling the bulldozer in!

Home Renovations

If there is any chance you may use your current home as a rental in the future, it is important to keep records of any improvements you have made. It’s hard to predict the future, and circumstances can change quickly. Keep your records just in case.

In the event of renting the home out, talk to your accountant to find out if you can claim any of the costs you have sunk into the home.

Claiming Depreciation for Employee Work Tools

For those of us that are employees, there are limited things you can claim as a tax deduction. Equipment and books that are purchased for work for less than $300 can be claimed as an immediate deduction.

Most of you will have noticed, this is not the case with your laptop. If the item costs more than $300, it is depreciated over the accepted “effective life”. In the case of your laptop, this is two years. There are a few different methods you can use to claim this.

If you use the laptop for personal as well as work purposes, you can only claim a proportionate percentage of the cost.

Work related courses, seminars and conferences, in contrast, including travel and accommodation, can be claimed as an immediate deduction.

Working from Home Depreciation

With the rise in working from home over the past two years, you can claim office equipment, electricity and cleaning costs. You can work these out individually or use the shortcut method. Keep your bills and receipts as well as a record of your hours worked from home.

Small Business Depreciation

Depreciation of business assets is treated as a business expense that spreads the cost of a fixed asset over its useful life. Depreciation is used to account for the decline in value of an asset, and it is considered an expense. This means that depreciation expense can be deducted from revenue when calculating taxable income.

A straight line depreciation method is easy to calculate because it represents the actual loss of value. But there are also accelerated methods to reduce the accounting burden for small businesses.


Depreciation is the term used in Australia for the deduction of the cost of certain assets over their useful life. Depreciation is applied to assets that are used for business, investment or employment purposes, but can also be applied to assets used for personal reasons.

Personal assets that depreciate can cause a lot of damage to your finances. Luckily, there are some steps you can take to avoid depreciation. Buying used items or investing your earnings instead of spending as well as delaying personal spending on luxury items until you have accumulated appreciating assets will help.

Employment, investment and business depreciating assets are usually a cost of doing business, necessary to make money and attract a tax benefit.

What do YOU think? Have any other thoughts about the effects of depreciation on our lives? Let us know in the comments below!

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

M&M – Saving not Investing – Dev Raga

*This post may contain affiliate links. This means if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.  

Everyone makes some money mistakes. But learning from others is a lot less painful than making your own! I have benefitted from listening to tales from family and friends investing disasters and have confessed my own financial errors for readers, in turn, to learn from.

It is rare people are brave enough to share their financial horror stories. The shame and embarrassment of a huge financial mistake often prevent people from reporting or warning others.  But learning from others mistakes is sometimes more valuable than stories of success.

In the M&M series, I have asked financial content producers to bravely confess their worst financial mistakes. Read these warnings carefully and learn as much as you can from them to avoid making money mistakes of your own.

Introducing Dev Raga.

My name is Dev Raga, and I am a medical doctor still in clinical practice. I am also a podcaster, and my main aim with my podcast episodes to discuss financial concepts/principles. My principal listeners are health care workers, who are often time poor to focus on their finances. I try and simplify concepts as much as possible.

Anyone can listen to my podcasts from the beginner to the advanced investor.

I like the FI part of FIRE, and not the RE. I don’t plan to retire early, but will reduce my work hours. This is because I like my job, and also to leave clinical practice is a big decision.

Dev Raga Personal Finance

Podcast is called: Dev Raga Personal Finance

Worst Financial Error: Saving not Investing

Probably the fact that I saved 40K during my medical school days – when I graduated, and didn’t invest it as I saved it.

I calculated –> thats a $1million mistake.

More recently 4 years ago – bought a custom built pool table. Not sure why, I don’t even play pool. I have used it less than 10 times in 4 years.

Biggest waste of consumer spending ever.

I just didn’t know enough about investing. I was an excellent saver in Medical School. I did not any of the financial principles/concepts I talk about. All I knew was how to save, up to 50-70% of my income – as a med student, which wasn’t much.

But time in the market is more powerful than timing the market. Had I know that, I would have been a better position today.

Could Saving Not Investing have been avoided:

Yes. More education, more awareness. Med school is not easy, and I had a lot on my plate back then. So investing didn’t even cross my mind.

When did I realise I made the saving not investing mistake?
In 2013 when the market shot up significantly.

Thats when I realised all the units I had bought between 2009 onwards would be worth much more. Then I realised had I done this from 2001 – since med school, it would be worth more.

Bounce back:

Since 2009 – I have saved, and invested at least 20% of my after tax income.

I have just kept investing simple, and easy, and long term focussed.

I don’t think I will ever recover the opportunity cost of $1million dollars, but at least now I have a much clearer understanding of investing, and why its much better if the market crashes rather than rises for me.

Thanks Dev Raga! Not many managed to save money during med school! Dev Raga’s previous article outlined his investing strategy.

Aussie Doc Freedom is not a financial adviser and does not offer any advice.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.