Give yourself a financial health check this spring
If your finances are in a bit of a mess, don’t panic. Katy Ward shows you how to get things back on track with a financial spring clean.
With the first day of spring on 20 March, many of us will be taking out the dustpan and brush to give our homes a good going over.
However, plenty of people would also benefit from taking a similar approach to their personal finances. Read on to learn how you could tidy up your money management.
Close bank accounts you no longer use
If you have unused bank accounts and credit cards, it makes sense to close these down. As well as simplifying your financial affairs, this may also improve your credit rating. This is because having access to a large amount of unused credit can lower your score.
What’s more, tracking down those unused accounts could possibly lead to a tidy little windfall. According to HSBC, there is currently £27.5million lying unclaimed in its customers’ accounts.
Draw up a budget
If you want to bring some order to your finances, it’s crucial you draw up a budget. In the dark days before I learnt to organise my finances, I never bothered to keep track of how much was coming in and going out of my account each month. If this sounds familiar, it could be time to face up to those unopened bank statements.
Once you have a thorough idea of your income verses your expenditure, you can set yourself some reasonable goals for your monthly spending.
As soon as I did this, I was shocked to learn how much of my pay packet I wasted each month. Before I started budgeting, I never really gave a second thought to treating myself to a few bottles of wine or a meal in an expensive restaurant. However, my little treats were setting me back more than a £100 a month!
Get the most out of your mortgage
You may be able to improve your financial health by getting a better rate on your mortgage.
If you think you could get a more attractive deal by switching providers or want to free up some of the value in your home, it could be worth scouring the market to see what mortgages are available.
Remember, however, buying a mortgage is an extremely complex process full of potential pitfalls. It is therefore crucial that you speak to a financial adviser before doing anything drastic.
Say goodbye to old debts
Spring cleaning is all about getting rid of clutter. From a financial point of view, owing money to lots of creditors can make your finances feel extremely messy.
If you fall into this category, you might want to think about a debt-busting technique know as ‘snowballing’. First, you single out one of your debts and concentrate all your efforts on paying this off, while making the minimum repayments on everything else.
As soon as you have paid your first debt off, focus your attention to the next and continue until you’re debt free.
Make money from tidying your house
Tidying out the clutter in your home could be another great boost to your finances. Don’t just throw away any unwanted items you come across as other people may be able to make good use of them.
If you’re a whizz online, you might want to sell your possessions via an internet auction site such as eBay. Otherwise, you could always brave the five am start and opt for a pitch at your local car boot sale.
Go online
As most of us probably know, paper statements from banks and utilities companies can soon clutter up our homes and easily get lost.
If you become frustrated whenever another letter from the bank hits the doormat, why not switch to online money management?
As well as making it easier to keep your records in one place, online finance could also save you money. Some banks and utility companies offer customers financial incentives to manage their accounts online.
And if you’re not already convinced, you’ll also be doing your bit to help protect the planet!
The exception to the spring cleaning rule….
Getting rid of the clutter doesn’t mean you should throw away financial documents! As I’ve discovered through bitter experience, it can be a real pain to start a new job without your P45.
It’s a smart move to have a system in place for filing away those key financial documents so whip out your highlighter pens and ring binders.
**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within this article/our website, but to conduct their own research and seek independent advice about the financial products they purchase.**
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