As the days grow longer and warmer, and tiny green leaves start appearing on the bare branches of trees, we humans are coming out of our winter slumber too. So how about giving your finances a spring clean? Here are 10 tips to get you going.
1. Reconnect with your dreams and goals
Take the time to check that your existing goals are still valid, or to create new goals, and put plans in place to achieve them. Remember, your goals determine how you organise your finances. A dream or goal that inspires you, will help you stick to your financial plan.
2. Dust off your budget
It is easy to go on autopilot with your budget, just updating figures every month without really thinking about how and where you want to spend your money. This Spring, look at your budget with fresh eyes and with your goals in mind, and see what changes you can and should make.
3. Challenge your expenses
Go through your account statements and/or your monthly expense tracking lists with three different colour highlighters. Use one colour to highlight your necessary costs (rent, water and electricity, insurance, school fees, groceries), and another to mark the items you bought because you really wanted or needed them (a vacuum cleaner or new shirts for work). The third colour is for stuff you bought without really thinking first (a round of drinks at happy hour or another pair of jeans). Use this information to further refine your budget.
4. Start an emergency fund
Give yourself some peace of mind knowing that when life throws you a surprise, you don’t have to go into debt or use the money you are saving for
your big goal.
5. Review your insurance
Do you know what your insurance covers, and have you informed the insurance company of any changes, such a new address or job change? And while you are at it, ask for new quotes. Also check that your beneficiaries are listed correctly and ask questions if you find anything you feel unsure about.
6. Work your rewards programmes
You probably have a loyalty card at your local supermarket or pharmacy, at your bank, on your credit card or with your medical aid. Are you using these programmes to get all discounts and freebies that you can? If not, take the time to work out what you need to do to get the most out of them. And if they don’t work for you, cancel them – bank loyalty programmes often come with a monthly fee.
7. Consolidate your debt
Debt consolidation is a powerful and effective way to bring your debt under control. The process entails negotiating settlement discounts with your credit providers and taking out a debt consolidation loan to pay them all off in one go. You are then left with one loan to manage. Your repayment is almost always lower because the settlement discounts reduced the overall amount you owe.
8. Put your finances on autopilot
If payments happen automatically, you never have to worry about missing them. It is therefore a great strategy to sign debit orders for loan repayments, and things like rent and insurance premiums. Do the same for your savings account and the money you invest for retirement – and remember to build in an automatic annual increase.
9. Plan your holidays
Now is the time to get organised for the December holidays. Look at travel and transport options and book tickets early to get the best prices. Keep an eye out for special offers on the things you want to get people as gifts, and put extra money aside for your festive season shopping.
10. Do the filing
Getting organised could be as simple as opening a file or two, or creating folders on your computer for different aspects of your finances. It doesn’t have to be fancy, it just has to work for you; and it will save you a lot of hassle in the long run.
BONUS TIP: Put your money to work
A proper spring clean often gives you more cash in hand as you get rid of unnecessary expenses. Don’t just leave the extras in your account (or spend it). Use it instead to settle debts or put it into a savings or investment account. You’ll thank yourself later.