Last updated: May 06, 2024

How to spring clean your finances

Michael Harms AFPS
Director & Chartered Financial Planner at Mortgages for Doctors

How to spring clean your finances

Spring is a time for renewal, rejuvenation, and fresh starts. It's also the perfect time to take a closer look at your finances and make some positive changes.

Whether you want to save more money, reduce debt, or just get your financial house in order, here are some tips on how to spring clean your finances.

1. Create a budget

One of the most important steps in spring cleaning your finances is to create a budget.

Firstly, identify your monthly income, including your salary and any side hustles or freelance work you do.

Then, list all your expenses, including fixed costs such as rent or mortgage, council tax, and debt payments, as well as variable costs such as groceries, entertainment, and utilities.

Take a good look at your expenses and see where you can cut back. Maybe you can switch to a cheaper phone plan, cut down on your TV subscriptions, or bring your lunch to work instead of eating out. It's the little things that can add up and make a big difference.

Next, allocate your income to each expense category so that you have a clear idea of where your money is going. Don't forget to set aside some for emergencies or unexpected costs.

Finally, stick to your budget! It's easier said than done, but it's crucial for financial success.

However, don't beat yourself up if you slip up one month, simply reassess and adjust accordingly. Remember, creating a budget isn't about depriving yourself of the things you enjoy, it's about gaining control of your finances so that you can achieve your goals and feel in control.

2. Reduce debt

One of the hardest things about spring cleaning your finances is evaluating your debt. It sounds simple in theory, but facing the amount of money you owe can be overwhelming and stressful.

Start by gathering all your credit card statements, loan payments, and any other debts you may have. Make a list of each one, including the interest rates and monthly payments.

Seeing it all in one place can be eye-opening, but it’s important to know where you stand.

Next, prioritise your debts. Start by paying off any high-interest credit card debt first, as interest can quickly snowball and cause your debt to grow faster than you can pay it off.

Consider consolidating your debt into one payment with a lower interest rate, or phone your credit card company to negotiate a lower rate.

3. Review your credit report

Your credit score is an important factor in your financial health, and it's important to make sure that your credit report is accurate. Review your credit report carefully to make sure that all the information is correct.

Even small mistakes, such as a mistyped address, can affect your score and could be enough for a lender to refuse you credit. If you do spot a mistake, contact the provider directly and ask them to change it.

A higher credit score can help you get better interest rates on loans and credit cards, so it's worth taking the time to review your report.

4. Evaluate your insurance coverage

Insurance is an important part of your financial plan, and it's important to make sure that you have the right coverage. Review your insurance policies, including car insurance, home insurance, life and critical illness insurance.

Make sure that you have enough coverage to protect your assets and your loved ones.

Check the assumptions the insurance companies are using in your policies such as interest rates, mortality rates and expected longevity. Compare premiums to make sure yours is competitive.

Speak to us and we can help you with a comprehensive review.

5. Plan for retirement

It's never too early (or too late) to start planning for retirement. Review your retirement savings plan and make sure that you’re on track to meet your goals. Consider increasing your pension contributions, or look for other ways to save for retirement.

If you haven't already, consider meeting with a financial adviser to help you develop a retirement plan that works for you.


6. Review your investments

Have your reasons for investing, your circumstances or objectives changed? Has your attitude to risk changed? Make sure that your investments are aligned with your long-term financial goals.

Look at your asset allocation to make sure that you are diversified across different types of investments.

7. Set financial goals

Finally, set some financial goals for the coming year. Think about what you want to achieve financially, whether it's saving more money, paying off debt, or investing in a new business venture.

Write down your goals and create a plan to achieve them. Make sure that your goals are specific, measurable, and realistic, and track your progress over time.

In summary, taking control of your finances can be a daunting task, but it's one that's well worth the effort. By decluttering your finances and organising your financial goals, you'll be setting yourself up for a brighter, more financially stable future. So take the time to assess your financial situation, make a plan, and take action. Remember, every step you take, no matter how small, is one step closer to achieving your dreams.

Happy cleaning!

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