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The financial MOT – Have you done yours yet?

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You’re probably aware of MOT services for your car (at least I hope you are), but you may not be quite as familiar with a financial MOT for you and your wallet. This concept isn’t a new one, but now is the time to familiarise yourself. Over the last 18 months we’ve been hit with a disproportionate amount of strife; with Covid fallout throttling the earning power of key demographics, a slump in saving account interest rates and sky rocketing house prices only a few of the challenges the average joe has to face in the ‘new normal’.

So, what is a financial MOT? Essentially, just like a mechanic would look over the main parts of your car for any issues, so too do you look over your finances to scope out if there are any areas of concern, either immediate or ‘one to watch’. Don’t worry it’s not as arduous as you might first think. 

You’ll want to break up the analysis into bite-size chunks by considering the most important areas. Short term credit lender (and publisher of the free ‘Money Academy’ web property) Wonga recommends you begin by summarising your finances into 4 distinct pillars that make up the bulk of your financial makeup, these will be the 4 areas of your finances you’ll want to explicitly review in your MOT:

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Conducting your financial MOT contributes to your financial wellness, according to Wonga, with their recent financial wellness report concluding that the majority of people surveyed currently rated paying for day to day life a priority over longer term goals. While not unexpected, this short-sightedness is not a great way to be financially savvy. So, with this in mind, we recommend addressing the following pillars of money: debt, budgeting, savings and investments.


Debt is (unsurprisingly) going to be one of the main drains on your overall financial health and should be the first area you look at. If you have other people in your household also responsible for finances, you’ll need to have a frank ‘warts and all’ discussion with them about this too as debt is often a subject we find very hard to talk about with others. 

You need to firstly list all the sources of debt – this includes mortgages, loans, overdrafts and credit cards. How much are they costing you each month and what is the interest on them? How long have you got on your repayments? You may identify some loans that you could pay off more quickly, or that you could consolidate. You might want to think about switching credit cards if the interest rate is too high – some credit cards give you an initial period of interest free payments. Consider how this debt makes you feel, too. Is it manageable? Is it stressful? If so, you might want to consider putting together a plan for paying them off more quickly, or for reducing the interest on some of the loans with the help of a financial advisor.


Budgeting is the next stage of your MOT and one that should be reviewed regularly, mainly because the cost of everyday living can fluctuate over time without you realising. Putting together a spreadsheet of what you have to budget for each week/month is a solid idea but can be overwhelming if starting from scratch.

Wonga’s recommendation here is to start with one or two aspects of your life and break these into as many detailed ‘buckets’ as possible (i.e. for August explore all facets of what you spend on your food budget, with buckets including ‘take out’, ‘fresh produce’, ‘alcohol’, ‘sweets/candy’ etc.,  then look at your entertainment budget with buckets such as streaming services, phone contact, Spotify etc). 

You’ll find that once every penny of your earnings has a custom made ‘bucket’ into which it can be recorded the whole process becomes much easier to handle. After a few months you’ll have analysed the majority of your spending in serious detail. This is where you can start to be strategic about the changes you make i.e. ditching branded items for cheaper products, sharing your streaming services with friends and family etc.


You’ll want to consider your savings next (assuming you have some). How much you’re saving each month comes down to your salary, how comfortable you live and what you’re putting aside for your future.

You’ll be forgiven for feeling like saving isn’t exactly easy in the current climate; while we’ve seen a recent rise in British interest rates over the summer of 2021 this is not the case everywhere. Yanga Nozibele, investment associate at Cannon Asset Managers revealed that saving rates in South Africa reached -0.1% in January this year. 

They did suggest, however, that it’s still very much worth saving and making small sacrifices to put money away each month. If anything else, you should save for an emergency fund, in case you lose your job or have an unexpected bill. Google the ‘52 week savings challenge’ for a gentle easing into the habit of saving every week of the year.


Investing is the final stage of your financial MOT and should be something you only realistically consider when the other areas of your finances are looking in good shape. Once you’ve cleared debt, developed a robust and practical budgeting and a healthy chunk of savings you can look into investment potential. Think of it as a coat of wax on your car and filling the tank with premium petrol to improve your miles per gallon. 

Don’t feel bad if you don’t get to this stage for many years. This area comes with its own unique challenges very different from what you’ve encountered up to this point. For example, after years of financial discipline in budgeting and saving it can be difficult to suddenly change how you perceive your money; it’s now a tool to be parted with to help you make more money rather than a precious finite resource to be jealously guarded.

The scope of investing is simply too vast to cover in a few paragraphs, but the most common forms tend to be stocks, shares and property. Of course they come with varying degrees of associated risk and as your portfolio develops you can be strategic with what percentage of your investment capital is dedicated to small sustainable growth relative to high risk ventures that can have serious payouts.


So there you have it. The framework for your financial MOT. I recommend addressing these points on a yearly basis, or after any major financial change in your life. How you conduct it is entirely up to yourself but I humbly suggest creating a series of spreadsheets (I use Google Docs) so you can easily duplicate the template you work from each year, minimising the amount of ‘set up’ effort to a one time investment. Good luck!

Author bio: Martin Long is a digital entrepreneur and marketing specialist with a particular interest in the fintech sphere. He writes on a variety of subjects of ranging from search engine marketing, consumer analysis, financial literacy, digital piracy, phishing and web safety

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