We have two young grandchildren and we love the Wiggles. We’re lucky enough to have met them and they are terrific blokes. We’re also old enough to remember seeing them play as The Cockroaches in their rock past.

It’s great to see Greg, the yellow Wiggle, recovered from his medical problems and back in the team but his return provides a lesson to us all.

Greg left previously and was paid a substantial amount for his shares in the extraordinarily successful Wiggles business.

He ploughed that payout into property developments which went sour and he lost most of his money.

He put all his investment eggs in the one basket, received poor advice and didn’t do his homework well enough.

It’s a tough lesson for anyone to learn.

The International Monetary Fund is stress testing major banks from 18 countries to see how they would weather another global financial shock. Australian banks will be amongst the first to be analysed.

While predictions of another financial shock coming out of Europe have calmed over the last week (even after the S&P credit downgrade) the world isn’t in the clear just yet.

We all should be taking a leaf out of the IMF program and stress testing our personal finances. It’s worth doing the exercise.

What would happen if you lost your job, died, contracted a long term illness or have a big medical bill.

Don’t ignore the prospect, it could happen to any of us. Understanding the financial fall out will motivate you to come up with a contingency plan.

Forget the performance of our national sporting teams, the Aussie dollar has become the symbol of Australian superiority for the entire country. The celebrations surrounding the benefits of the high Australian dollar are almost overshadowing the pride we have in celebrating our national day this week.

Australians are traipsing the world as if they own it and, with the value of the currency at the moment, they almost can. It has never been cheaper to buy foreign goods or travel overseas as it is today.

It’s remarkable. Over the last 2 years the Australian dollar has appreciated 17 per cent against the US dollar, 8 per cent against the English pound, and a whopping 33 per cent against the Euro. That means your spending money goes a third further in Europe than it did 2 years ago. It means any imports that valued in US dollars are now 17 per cent cheaper than they were 2 years ago.

To put all this in perspective, the long term average of the Australian dollar against the green-back is in the mid to high 70 US cents. At around the current $1.03 it is so far above the historic average that many currency gurus are saying take advantage of it while you can, because it won’t last.

But when that fall back to the historic average comes is anyone’s guess. In the mean time be aware of what drives the value of our currency and when those drivers start to falter you’ll know when that drop is coming.

The start of a new year is a great time to get on top of your finances. It’s a good time to go through your previous year’s receipts, personal budget, and income. Use all this information to evaluate last year’s financial performance, make changes and set a plan for the year ahead.

1. Go through the books

It’s all too easy to swipe a card or direct debit your bills and loose track of how much you’re actually spending. Check whether you’re sticking to your budget estimates, and compare your bills to the previous quarter or the same time last year and if there’s a big difference work out why.

2. Look at your progress

Has your overall financial position improved in the past year? Get out your bank statements and work out whether you have reduced your debts and loans over the past 12 months.

3. Prioritise

Think about what you want to achieve in 2012 and where you want to be in a year’s time. My advice would be to get rid of any kind of credit card debt first. This is your most expensive debt, charging around 20 per cent interest. If you are currently renting you may like to focus on saving a home deposit this year.