Diana Clement: Financial tune up can get you cruising

It's spring. My car needs an oil change, clean spark plugs and a general tune-up. So do most people's financial lives.

If left, your bank accounts, mortgage, insurance and more just don't function as they used to. They've got old and tired. You need a good clean-up or even replacement.

I've pulled together some pointers for reviewing your finances, most of which can be done from home with little more than an internet connection or telephone.

Keep a spending diary for a month: You can never do this too many times. It will highlight where your money is really going. It's often the incidentals such as books, magazines, takeaways, coffee, lunches and those "I deserve it" purchases that undermine your budget or ability to save.

Use pen and paper if you prefer, or an application for your iPhone, Blackberry or Android phone if you have one.

A spending diary is a real "in your face" tool for reviewing your spending priorities.

Review your mortgage: If you're on a fixed rate, consider shopping around when your mortgage next comes up for renewal. Bargain hard and ask your bank to match the opposition's rate. Sometimes it works. Also consider splitting your loan into a couple of different fixed-interest rates and perhaps keep a chunk of it on a floating rate so you can pay down capital. A visit to an independent mortgage broker is free and may save you money.

Increase your debt repayments: Beware, however, of increasing hire purchase (credit contract) repayments without reading every last line of the fine print. Sometimes you're penalised for speeding up payment of your loan. Another approach to paying your loans or mortgage off faster is to split your monthly payment in half and then start paying fortnightly.

Because there are more than 28 days in each month you'll make a greater number of payments over the course of a year. Or you can cut the mortgage term to, say, 15 years and increase the monthly payments. Either way paying your capital off faster can save huge sums of money over the lifetime of a mortgage. If you can, consolidate debt on to your mortgage. But make sure you've got a plan in place to pay down the loan faster.

Shop around for better utilities: If you're not tied by a contract, shop around for cheaper/better deals for electricity and gas, telephones, mobile phones and broadband. Deals that combine two or more services through one provider can often be cheaper.

It's a good idea to call your current provider's customer help line and tell them you're thinking of moving suppliers. You'd be surprised how often they suddenly pull "a better deal" out of the bag. When I mentioned this to my electricity supplier, I was suddenly offered the superior value contract the company was touting door-to-door in my suburb.

Streamline your banking: Chances are if you've not reviewed your accounts for at least two years you're probably not on the best rates/fees level you could be. Life is changing quickly and you can, for example, probably do without a chequebook, which can alter the fees structure enormously.

If you've got more than the bare minimum in your account then it's time to consider investing that - even if it's in a term deposit or cash Pie. Check out interest.co.nz for the latest rates. Six-month term deposit rates at the main banks this week ranged from 2 per cent to 5.10 per cent. That's a big difference. Term Pies for the same length of time were paying up to 5.85 per cent.

Cut your insurance costs: Insurance policies should be reviewed every couple of years. The easy way to do it is to contact an insurance broker, who should be able to do the comparisons for you and perhaps suggest other insurances you may need.

Make sure you've got enough life insurance cover for any dependants should you die. Be very careful, however, of switching life and income/mortgage protection policies. If your health has changed in any way since you last took out a policy you will not be covered for "pre-existing conditions", which means your new cover may be more limited or even worthless to you.

It's essential to read every last word of your insurance policies as well. How many months, for example, will your current insurer cover your rent if your house is made uninhabitable by earthquake or flood and you're forced to move out?

Learn something new: What area of your finances do you know the least about? There's a book on virtually every financial concept known to man.

If you can't find one in your local bookshop or library (which will stock some quite obscure ones as well as the best-sellers), then try specialist bookshops such as global-investor.com or intelligentinvestor.co.nz. If you're not cut out for reading financial books, try some online training from websites such as incademy.com or investopedia.com/university.

Tame your credit cards: Look at how you use your credit cards and work out if you can a: do without them; b: use them more wisely; or c: find one that's better value.

The website canstar.co.nz rates New Zealand credit cards. If you're getting credit cards rewards, check you've got the best earn/burn rate. Canstar can tell you this as well. Make sure you spend those rewards and any gift cards you've been given before they expire.

Save an additional 1-2 per cent: If you read my lifestyle inflation article last week you'll know that it's all too easy to spend your pay rises. Increase your regular savings straight out of your pay packet.

Or rearrange your bank accounts so that you have one earmarked for savings that you don't dip into. It's best to hive savings off at the beginning of the month (also called paying yourself first), rather than wait until the end of the month. If you've got debt, turn this around and channel an extra 1-2 per cent to debt repayment.

Dump the dross: If you've got a portfolio, you've probably got some real no-hoper investments lurking within it somewhere. You hold on to the duds hoping they'll bounce back. In the meantime you could be using the money tied up in those investments in higher earning alternatives. Letting investments languish is one of the biggest investing blunders.

Review your will: If anything at all has changed in your life or you haven't reviewed your will for five years, do it. I keep dwelling on the story of slain police officer Don Wilkinson, who when he only owned two guitars and a car left his entire estate to his adoptive father.

Twenty years later his estate had grown to $2 million but he'd not got around to changing his will. His mother was left out in the cold financially.

Ask for a pay rise or perks: Life is about to get at least 2.2 per cent more expensive thanks to the GST rise (although many of us will receive tax cuts at the same time).

There's never any harm in asking an employer, or clients, for a pay rise to compensate you for cost of living increases. With employers, benefits, such as gym membership - if you're the type of person to use one - can be easier for an employer to hand out than cold hard cash.

Finally, ask yourself these questions:
* Do I have investment goals and are they written down?
* Am I saving enough to retire aged 65?
* Can I reduce the tax I pay?
* Do my relatives have a paper trail if I die?
* Can I reduce my spending without compromising my lifestyle?