5 ways to Spring clean your finances
Running a stocktake of your personal finances is a worthwhile process to go through on a regular basis. Reviewing the numbers is good for both your pocket and your peace of mind, ensuring your nest egg is not only protected but also working effectively for you.
1. Budget and financial planning
Review your budget and spending. It’s a valuable exercise to break out the highlighters particularly on your savings and credit card statements. You might be surprised at your spending patterns. Identify necessary and discretional costs and get ruthless on reducing unnecessary spending.
Also look at updating your financial calendar and plan. If you don’t already have them, think about talking to a financial planner or accountant to assist on these to put you on top of future spending income and costs. If you haven’t got a budget, create one and ensure you stick to it!
2. Debt
It’s always worth reviewing your personal debt to shrink and shave wherever you can. Ensure you’re paying off the highest interest non-tax deductible debt first, consolidate your debt where possible, reduce non essential spending and pay off as much interest as you can on the credit cards.
3. Housekeeping
Having all your financial records organised in an orderly, accessible way can do wonders for getting on top of your finances and feeling in control.
Create an ICE (in case of emergency) folder to centralise and consolidate all your key documents and accounts so they can be easily located by a trusted person such as a spouse, the executor of your will or a trustee if required.
Update and streamline your accounts where possible, and look at automating your payments for a more time and cost-effective approach to bills. If you’re comfortable with it, go paperless. Pretty much all financial documentation these days can be provided online, giving you the benefit of less paperwork, more convenience and simpler record-keeping. Not to mention being better for the planet!
4. Getting the best deal
Take a fresh look at how much you’re spending on services like mortgages and insurance policies, as well as telco, internet and utility plans. Plus the interest rates you’re getting on your savings and investment accounts. As products get more and more competitive and it becomes easier to compare different services, this should be a regular exercise to ensure you’re always getting the best deals available.
5. Estate planning
As your circumstances change, make sure you check whether you need to update your estate planning or review your will including your beneficiaries. Ensure you’ve got an executor organised and your assets allocated through a trust or will.