The days are a little longer, the weather is a little warmer and it’s traditionally the time of year we’re supposed to clean the house. After all, the term ‘spring clean’ has become synonymous with a good thorough cleaning out. And not just in the spring months either.
For many Aussies, the many months stuck in some degree of lockdown means the last thing we want to do is clean our homes.
So what about spring cleaning your finances?
If you’re struggling to remember the last time you dusted off your pen, notebook, finance apps and calculator, then now is the perfect time to do a deep dive into your finances (and maybe save some dollars while you’re at it).
Dust off your budget
How long has it been since you’ve taken a good look at your budget? Having a budget you actually use is a great way to save while at the same time, making sure you’ve always got enough money to pay for regular bills and expenses.
Sit down and make a list of all your regular expenses. Weekly, monthly, annually. Don’t leave anything out, no matter how small, then figure out how much you need to put aside according to how often you’re paid or pay yourself if you’re self-employed.
Can you cut back on any expenses? Have you called your bank, insurer or utility provider (electricity, gas etc) to check if they can give you a better deal? You might be surprised how much you can save!
If budgeting isn’t working for you, here’s some things to think about:
- allocating enough money for regular bills? Putting away $9.99 a month for your Netflix account that now costs $19.99 isn’t great budgeting.
- paying for subscriptions you no longer need? Get rid of them and save the extra dollars.
- be realistic about how much you spend. Do you really only spend $20 a week on take away?
Once you’ve put your new spring cleaned budget into place, stick to it!
Cutting costs and trying to save a few extra dollars can also help improve your chances of buying your own home.
Scrub away debt
Look at everything you owe, how much you owe and what kind of interest you’re paying. Pay down any of those small debts. This includes credit cards, personal loans, store cards and even smaller home loans.
Credit card and personal loans have higher interest rates so if you can, get rid of them by paying them off fast.
Have you spoken to your bank about your home loan and can they offer you a better interest rate? With the Reserve Bank of Australia (RBA) keeping interest rates low, it’s a great time to renegotiate with your bank or other lender.
But don’t forget that not all debt is bad debt. You can use debt to build your personal wealth.
Oh this old thing?
The time has come to get rid of bad spending habits. While so many of us have been cooped up in lockdown, it’s been a good time to look at the way we (used) to spend money and how a few changes can make the world of difference.
Do you pay more for grocery items at the servo because you’re too busy to put together a shopping list or do you outsource, and have your weekly shop home delivered?
Do you buy up big on your credit card and forget to make the payments, meaning more interest charges and late fees?
Spruce up your direct debits
These days, most companies offer direct debit or Bpay. They cost nothing and mean you can just set and forget your regular bills and expenses. You never miss a payment which means your credit score no longer has to bear the brunt of your forgetfulness.
And let’s not forget, setting up electronic payment means less paper so you’re also doing your little bit for the environment.
Scour your credit report
You’re entitled to a free annual credit report so why not use it? Every spring, order your new report and check it carefully. Any errors or mistakes can have a negative impact on your credit history which is bad news if you want to apply for any sort of finance in the future.
If you spot any mistakes, don’t just leave them. There’s lots of places where you can order your free credit report and, if you do find a mistake, the government’s Moneysmart website has some great tips on how to get it fixed.
Revamp your Super
There’s never a bad time to take a look at your superannuation, especially if you have a few super accounts lying around being eaten up by fees. Now’s the time to choose one fund and get all that money in one place. Take a look at what else they may offer, check out their fees and make an informed choice.
And if they have an app, download it and watch your retirement savings grow.
Vacuum up your savings
Take all that extra money you’ve saved in fees, cancelled subscriptions, lower interest rates and more mindful spending, put it directly into a savings account and watch it add up.
If you’ve got a mortgage, chat to your lender about an offset account to make your savings work even harder for you.
Resist the urge to pocket the extra money and head down the shops. Put it away and make it work for you.
But if you do spend the money, spend locally and support those small businesses who’ve done it tough during lockdown.
As so many of us anxiously await the end of lockdown, imagine how great you’ll feel stepping out in the warm soon-to-be-summer sunshine knowing you’ve spring cleaned your finances and they’re now in the best shape they’ve been for years.
If you’re feeling inspired to make your money work for you, check out our handy finance calculators or book a discovery session with one of our expert financial advisors today.
This offer for Private Wealth Services is not available to clients of BMF as at 31 December 2016.
Kelly Partners Private Wealth (Wholesale) Pty Ltd is a corporate authorised representative of Kelly Partners Private Wealth Pty ltd (AFSL: 516704, ABN 14 629 559 860). Any general advice provided has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice with regard to your objectives, financial situation and needs.
Kelly Partners Private Wealth Sydney Pty Ltd is a corporate authorised representative of Madison Financial Group Pty Ltd (AFSL: 246679, ABN: 36 002 459 001)