It’s Time to Get Your Finances in Tip-top Shape…
It’s always a great time to spring clean your finances. You should never leave it for another time and put it off for a later date. If you get an urge for a declutter, then do it straight away.
Much like a wardrobe declutter, I like to have a regular clean up of my wallet. This year, I’ve really paid attention to what is happening with my money, especially during recent times. It’s becoming more important to make sure your money is working smartly. There are a few, quick and easy steps you can take to get your finances in tip-top shape. Here are five things you can do to spring clean your finances right now…
CHECK-IN WITH YOUR SPENDING.
The first thing to do is to check-in with your spending. Sit down with your previous month’s bank statement and highlight every purchase that you cannot recall straight away. You’ll be surprised how many purchases you cannot recall. Once you see the amounts that you’re spending frivolously, you’ll be more incline to make changes and cull back.
Banking apps can also help with seeing which categories you’re overspending in, making suggestions on where to cut back. Arming yourself with knowledge enables you to turbocharge your savings. Which can only be a good thing.
CREATE AN ACTIONABLE PLAN FOR YOUR DEBT.
Debt can leave your feeling overwhelmed and isolated. So while you’re spring cleaning your finances, now is the perfect time to take a stab at your debt. The first thing to do is to note down each debt and how much you’re paying currently. Most people would suggest paying the debt with the highest interest/ debt off first. However, I’ve heard of an alternative option that is just as effective.
The snowball is becoming more popular. By starting with the smallest debt and working your way up, you’re able to make quick wins with paying off debt. This gives you a confidence boost to take on the bigger debts and take them head-on. The momentum and freedom you’ll feel by ticking off those tiny debts will carry you through the rest of the year.
CHECK YOUR CREDIT SCORE.
Truthfully, right now, can you tell me what your credit score is right now? Your credit score is one of the most important tools in your wallet, more than the amount of savings you have. You can check your score for free on Experian, just enter your details and away you go. I love their app, it updates you every 30 days and is enough for me to know where I’m at. You can pay the subscription to get a deeper dive, see any hits on your score.
Speaking of hits, did you know you can speak to you bank about removing them? I once had a late payment (my error-totally). I called up almost in tears apologising to my bank for the error and within one minute, they had got it cleared from my account. If you’re nice and explain the situation, you’ll be surprised as to what people will do for you.
UP YOUR PENSION PAYMENTS.
Whenever you can, looking at your pension and seeing what we can do towards setting you up right for later on in life. Even if you can only afford to up your payments by 1%, it’s that little bit more towards retirement. It’s not something that you really think about in your early twenties, but the older you get, the more you think about the future and that cushy life you want to live.
Speak to your employer and see what you can do to up the payments. In most companies, they will match your payments up to a certain limit. If you can, you should maximise it as much as possible.
SET UP AN EMERGENCY FUND.
If these last couple of months have taught us anything, it’s that an emergency fund is really important. Some say that the average emergency fund should be about three months of income. This isn’t a goal that is immediately achievable, so go for something that is comfortable for you. For me right now, I’m building up for £1000 and then go from there. I’d love to always have a certain amount building up pennies, just there whenever I need it.
Honestly, even the smallest amount is enough to put away. £10, £50, £100. Whatever you can, put to one side for that rainy day.
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