Spring cleaning your finances

Streamline planning for the future by getting organised.

Spring is the perfect time to get your finances in order. Being on top of your finances can help you feel more in control, while reevaluating your bills and purchases more often can help you stay within budget. Also, you’re more likely to think ahead and plan for the future if you get and stay financially organised.

Start by organising your paperwork

Life events such as selling or buying a home, preparing for retirement or an insurance claim can leave you with an accompanying mountain of documents. Most people aren’t certain what papers are important to hold onto. In a pinch, they either can’t find exactly what they need or realise they never saved it in the first place.

Creating a physical and digital filing system is often the simplest way to organise your documents, making it easier to locate important papers when you need them. Sort your documents by major category like investing, insurance, retirement, estate planning, car funds and home repairs by designating a folder for each. You can then break down each category by year. Be careful to shred or delete any documents you decide you no longer need.

Run your credit report

Check your credit report every three months for negative changes and look for any signs of identity theft. You can check with the three credit reference agencies – TransUnion, Experian and Equifax – individually, or get a consolidated report from MoneySavingExpert or ClearScore who provide free access to reports.

If you find errors or negative marks such as missed payments or repossessions made in error, you have the right to dispute them with the credit reference agencies under the Consumer Credit Act 1974 and General Data Protection Regulation (GDPR) 2018. Keeping an eye on your credit report can also help protect against identity theft.

Take an annual look at the big picture

Spring is the perfect time to reassess your spending habits, income changes and financial priorities for the rest of the year. Decide what your highest priorities are and consider ways to boost your financial health. A little creativity could help you get closer to your goals more quickly.

Smart financial moves:

• Refinancing debt to a 0% interest credit card, consolidating debts or remortgaging to lower monthly payments. Seek guidance from StepChange or Citizens Advice if needed
• Cutting unnecessary costs: Review direct debits and standing orders, cancel unwanted subscriptions and compare deals on utilities, broadband and insurance using MoneySuperMarket
• Earning extra cash: Sell unused items on Vinted or eBay to free up cash

Budgeting and automation

Creating and sticking to a budget gives you the freedom to spend your money in a way that best supports your goals whilst allowing flexibility for life’s priorities. One easy way to do this is by automating as many payments as possible and being diligent with your discretionary spending.

Retirement planning

As you take control of your finances and prioritise your goals, don’t forget to consider retirement. Most people want to work less in the future or retire altogether, and as costs rise over time due to inflation, it’s important to make sure you save enough to support the lifestyle you want to maintain. Consider boosting contributions to workplace pensions, SIPPs (Self-Invested Personal Pensions), and ISAs (Individual Savings Accounts).

Whilst organising your finances takes some time and effort, the payoff in the long run is well worth it. It gives you the freedom to save for the goals that matter most to you and enables you to have funds in place when you need them for an emergency or a major purchase.

Source: New York Life