Spring Clean Your Finances

When was the last time you took a good look at your finances? When you switch out your wardrobe and do your other Spring cleaning, take the time to tackle your finances too, with these 3 simple tips.

Dust off your budget

A budget is an overall spending plan and is an important step in your financial planning. When you budget consistently it becomes much easier to reach your financial goals and eliminate unnecessary financial stress. Having a budget is a good tool to avoid credit card debt and promotes saving.

It is so important to constantly review and reflect on your existing budget. Have any of your debit orders increased? Have you taken out any extra insurances that need to be included in your monthly spending? Reviewing your budget is a great way of tracking your spending and savings.

Ask yourself these questions when reviewing your budget. What did I do well? Where did I fall short? Has anything changed? How can I improve?  Oh, and one more thing, this is a time to be completely honest with yourself; no matter how difficult it might be.

Catch up on overdue payments

Now is the perfect time to catch up on late payments. Find out what is overdue and make a plan to pay it. This will play a positive role in your financial future.

First, you need to figure out which payments are overdue and make a list. Then prioritise them; for instance, the ones which carry a high interest or outstanding fees. Also prioritise any bills relating to your immediate needs (rent, utilities etc.), or your needs to get your job done - like car payments.

Now that you have compiled your list, start phoning creditors. ​​If you communicate with your creditors about your current financial struggles, they may be more flexible with repayment plans, including changing terms or possibly even penalties.

Change your spending habits

Spring is a lot like January, full of renewed hope and a second chance. So this is the perfect time to change those bad spending habits. Small changes can go a long way with your finances.

First track your regular habits, do you go eat out every Thursday with friends, or go out for breakfast on a Saturday morning? By cutting back on these events to every second week, or tailoring them down by just going out for a coffee on a Saturday morning, or eating at home on a Thursday but going out for drinks, you could save.

Do you have a buy today, pay tomorrow attitude? This could severely damage your financial well-being without you even realising it. Getting into a habit of always using a credit card can give you a false sense that you have more money to spend than you do.

Over time your financial needs change as your short-term goals change. Even long-term goals need to be reviewed so they can remain relevant and represent your ideal life.

Set aside time this Spring to review your finances and adjust them where necessary. By taking the steps mentioned above you can steer your life in the right direction.

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