HOW TO SPRING-CLEAN YOUR MESSY FINANCES
Tips on organising your affairs
SPRING-CLEANING can be both a drag and an awesome thing to do. A drag because it’s hard work, yet nothing feels better than seeing your house looking and feeling fresh after blowing the dust off everything.
Guess what? The same can be true when it comes to your money. Just as it is now the time to clean out your cupboard, it is also an ideal time to consider organising, simplifying and helping yourself to set up another year of financial success. If you’ve never spring-cleaned your finances, now is the time.
Here are a few tips to weed financial clutter in your life and make a way for financial success.
Pay SARS by submitting your tax return Make sure you have all the documentation necessary to file, including your IRP5 from your employer. Documentation needed for tax returns are: medical aid statements, a tax certificate, investments and retirement annuity statements, etc.
You have a choice of submitting manually (which is hard work) or electronically.
If this kind of stuff makes you dizzy, get a tax consultant to help you (at a price, of course). You might get a rebate. If you get it, add to your emergency fund or start one.
Spring-clean your budget The pillar of your financial spring cleaning is planning a new budget. It is a great time to take a closer look at your budget. If you don’t have a sophisticated way of doing it, go “old school”.
Get your credit card and bank statements for the past three months and three different colours of highlighters. Use one colour to highlight the necessary stuff your bought or paid for, another to mark the things you ‘ wanted ’ and another colour to highlight the stuff you could have done without. Be warned, this exercise is usually eye-popping.
Most people don’t realise how much they are spending on stuff they really don’t need.
After highlighting your “problem areas” make sure you get rid of those expenses and rewrite your new budget on an Excel spreadsheet. Try your best to track it on a monthly basis because come next spring, you will have a record of the year’s spending and can even see spending trends over time.
Spring-clean your insurance policies How many do you have? Do you still need them all after so many years of not checking? Look at how much you ’ re paying for car insurance and get a new quote – you should be paying less by now.
Get a financial adviser to help you so you leave no stone unturned with your insurances. We often pay for benefits that may not be suitable for us any more and someone is getting very rich at our expense.
You should have a will and make sure your beneficiaries are up to date and premium levels are correct. Don’t be duped into taking new insurance you don’t need.
Kill debt It’s time to also get rid of debt. While checking and redoing your budget, you may have found extra small monies you can use to add to your debt payment.
Have a “Just in Case ” file If you are managing money in your household, you owe it to the people you love to put together a folder of information that will help them figure out how to handle your finances in case anything happens to you.
It should include all information your ID copy, investments you pay each month, retirement, names of shops you owe money to and even your internet banking ID and passwords. This can be a literal folder or you can have a high-tech option.
At the end of this exercise, you will feel good and clean in your finances.
–