With the clocks leaping forward, Easter just around the corner, and a new financial year about to start, now is the perfect time to get your money in order. If the longer, warmer days have given you a fresh burst of energy, put it to good use, with our top tips for spring cleaning your finances.
1 – Update your Budget
If you don’t have a budget in place, now is the time to make one, and if you do, now is the time to check it’s still working for you. This means adjusting your spending goals to reflect any changes in your income and expenditure, and finding out where you could be saving. For example, if you find a barely-used gym membership lurking among your direct debits, it could be time to cancel it and put the money towards something else. If you’re paying for data, minutes or texts on a phone contract which go unused at the end of the month, this is another area in which you could save.
2 – Find Old Accounts
It’s surprisingly common for money to go missing but, luckily, you can check whether you have any neglected accounts online with mylostaccount – a free service provided by UK Finance.
By locating any missing accounts, you can make sure your money is working for you. You might decide to move lost funds into an account you have easier access to, or into a savings account with a better interest rate.
3 – Sort out your Debts
Whether you’re still paying for Christmas, or dealing with longer-term debt, taking the time to think through your repayment strategy is always a good idea. Once you’ve adjusted your budget, you’ll have a better idea about how much money you can dedicate to your debts each month. It’s best to pay as much as you can reasonably afford, rather than consistently making minimum payments, since this will lower the amount you ultimately pay in interest. With long-term lines of credit there may be fees for paying it back early, however, so bear this in mind when working out your repayment strategy.
If you are struggling to keep on top of your repayments, there are plenty of debt solutions available. For advice tailored to your circumstances, you should speak to a qualified debt advisor.
4 – Review your Goals
Living within the constraints of a budget is far easier when you have a clear goal in mind. Take some time to think about where you want to be financially, and set yourself short, medium, and long term goals to focus on.
Your short term goals might be to stick to your budget for a month, or start saving for Christmas. Medium goals might include saving enough for a family holiday, or buying a car. A long term goal could be something like buying a home, starting your own business, or saving for a child’s future. Another long-term goal might be to clear your debts. In the short term, you could set yourself the goal of overpaying a certain debt each month, and over the medium term you could aim to totally clear one debt.
5 – Check your Credit File
Whilst you’re on a roll organising your finances, finding out your credit score is a great idea. Many long-term financial goals will rely on credit, so having a credit score which allows you to access the best rates could be essential.
You can find out your credit score, and request a copy of your credit file, through one the UK’s three credit reference agencies; Experian, Equifax, and Callcredit. Requesting a one-off report will usually cost £2. It is important to check your file to ensure that all your details are correct, since even something as simple as a misspelt address can drag your score down.
6 – Sort out your Savings
Every successful budget leaves room for savings – budget them in as an essential monthly expense to make sure you’re consistently saving. Even if you can only afford to set aside a very small amount, it all adds up!
It’s a good idea to have an emergency fund which would cover your living costs for a few months, to make sure you’re prepared for life’s financial blows. Once this fund has grown, you can start to put money aside for the things you really want.
7 – Sort out your Documents
Many of us are guilty of possessing a filing system which looks more like a war zone. Now is the time to make peace with your documents.
Make sure you shred all the papers you no longer need before recycling them, to protect your important details, and use a ring binder and some plastic wallets to set up a simple organisational system, and remove the stress of hunting down missing documents for years to come.
8 – Consider Changing Bank Accounts
The dawn of a new financial year tends to herald better interest rates, so it’s definitely worth shopping around as part of your spring clean. Some current accounts might be offering a bonus for switching, or a tempting introductory interest rate. On the other hand, a different bank might offer a better overdraft deal – or even an interest free period. If paying off an overdraft if one of your financial goals, give yourself a boost by switching accounts.
9 – Clean out your Wallet
It’s a task that many of us dread, but throwing away everything you don’t need can really make your day-to-day spending less fraught with anxiety. Use the opportunity to discard of loyalty cards you no longer use, and receipts from that coffee you had five years ago. You might even stumble across some long-forgotten gift cards and be able to reward your efforts!
10 – Have a Declutter
Our final tip overlaps with your actual spring clean, so it’s a win-win situation! Sort through your possessions and sell or donate anything you don’t regularly use. A clear home can make for a clear head, and you can put the profits towards your financial goals.
Hopefully these tips have given you some ideas about how your finances could benefit from a deep scrub – happy spring cleaning!