5 great ideas to help you give your personal finances a timely spring-clean

With the days getting longer and warmer weather on the way, the first signs of spring are in the air.

It’s generally an uplifting time of year, so why not take the opportunity to boost your mood even more by giving your finances a spring-clean?

Here are five useful tips to get you started.

1. Check all your paperwork is in order

Spring-cleaning is about clearing clutter. So, as well as sorting out your kitchen cupboards and wardrobes, do the same with your financial paperwork.

Go through and get rid of all the out-of-date items. You probably don’t need those 10-year-old bank statements anymore, and you should be able to throw away the loan agreement for the car purchase you paid off years ago, too.

Do the same with your online records as well as all hard copies.

Once you’ve cleared out everything you no longer need, set up new filing systems – actual and virtual – to make it easier to find stuff you might need in a hurry in the future.

2. Review your regular monthly outgoings

As well as tidying your financial paperwork, check to see what’s cluttering up your bank statement.

Online banking makes this very straightforward, so, if you haven’t already set up an online account, it’s well worth signing up for.

Look through all your existing direct debit mandates and other regular outgoings. Make sure all the figures are correct and the right amount is being collected – if, indeed, anything should be being collected at all.

Then see if there are any direct debits or standing orders you could cancel. Are you really getting value from your gym membership, especially now that lighter evenings are on the way? Do you need all those different TV streaming services – particularly during the summer months, when you might be spending more time outdoors?

Doing this will give you a big boost – especially as you could easily save yourself some money.

3. Set up a simple income and expenditure summary

Once you’ve tidied your bank account, the next step is to check your income and expenditure.

While you’re looking through your account, start putting together a simple spreadsheet. List all your regular outgoings on one side and your income sources on the other.

You should also take a look back over the past few months at your discretionary spending and average this under different headings: food shopping, meals out, clothes, and so on.

Doing this will help you see where your money is going each month, and where you could make savings if you need to.

4. Get on top of your credit card debt

If your income and expenditure summary gives you an uncomfortable reminder of the amount you spend on credit card debt, now is the time to grasp the nettle and start reducing the amount you owe.

Just confronting the problem and putting a plan in place to sort it out will give you a boost.

List your debts, and the interest rate being charged on each. Then put a plan together to start targeting them one by one. Start with the card with the highest interest rate and maximise your repayments.

If you have money in a savings account, the interest rate you’re earning is unlikely to be anywhere near the rate you’re being charged on credit cards. This means you could be better off using the money to clear your debt. The only exception is your emergency fund that you should leave intact.

You’ll be able to replenish your savings when your debts are cleared.

Also check consumer finance websites such as Money Saving Expert to find out about 0% balance transfers you may be eligible for. You should aim to treat these like an interest-free loan. Divide the debt by the number of months and set up your direct debit accordingly.

Before proceeding with a balance transfer you should check the terms and conditions to make sure the transfer charge won’t mean you aren’t actually saving money.

5. Make sure you’re getting the best rate on your savings

If your credit card debts are under control, a good next step is to make sure you’re receiving the best possible interest rate on your savings.

Rising interest rates can mean higher mortgage repayments, but they also mean savings rates have increased.

It’s very possible that “savings inertia” could be costing you money. A report in the Guardian revealed that £270 billion is sitting in accounts with no interest.

Your emergency fund clearly needs to be in an instant-access account, but there’s no reason why you shouldn’t shop around for the best deal. Moneyfacts are currently citing 3.40% as the top rate available at the moment.

If you’re prepared to tie your money up for an extended period, you could benefit from even more attractive interest rates. For example, Moneyfacts confirm the best annual interest rate on a three-year fixed-rate bond is currently 4.50%.

Get in touch 

If you need help or advice regarding any of the financial issues you’ve read about here or would like to review your investments or long-term financial plan, please get in touch.

Email info@lebc-aspira.com or call us on 01454 632 495.

Please note

The information contained in this article is based on the opinion of Aspira and does not constitute financial advice or a recommendation to any investment or retirement strategy.