Spring time is a season when we clean up our clutter – a season of newness – a season of freshness. It is a season of new beginnings and what better time to re-examine your finances. When was the last time you were honest with yourself about the health of your finances? When last did you take a proper look at your financial portfolio – or is it a stale document stuck in a draw somewhere?
Geraldine Macpherson, Liberty’s Senior Legal Marketing Specialist says, “This spring, you need to have a fresh approach to your money. The best way to start this process is by taking the time to do a financial spring clean. Get your finances in check by getting organised, the sooner you start, the sooner you can enjoy the benefits.”
Geraldine lists five tips to get you started:
Review your statements
Gather all your latest financial documents, including your bank accounts, investments, credit card statements and retirement savings as well as insurance policies such as your life and disability policies. Review all these documents to see if they are still relevant; do any of them need updating? Also, familiarise yourself with what debt you owe and put a plan in place as how best to pay it off.
Clean out your wallet
Do you carry around unused credit cards? The fact that they are sitting in your wallet may be the very reason you are tempted to overspend – rather store them in a safe place, knowing you have access to funds should you need them in an emergency.
Pay off your debt
Debt is costly. Very costly! By reducing your debt, you will lower the amount of money you waste paying back the interest. There are different strategies for paying off debt. One philosophy says to get rid of the highest interest debt first since that costs you the most money every month. On the other hand, you could choose to focus your paying-off efforts on the smaller amounts of debt first, then use this money to pay off your higher bills.
Prepare a budget
Put together a schedule of your total household income vs. your expenses. Be honest with yourself! Make sure you spend on the important things first such as paying your household expenses, then your debt as well as a little bit of savings that can be used at a later stage. By drawing up a budget, this will help you to see how much your expenses amount to and where you are wasting money i.e. that latte every morning on the way to work.
Check your credit report
Every year, you are guaranteed at least one free credit report from a credit bureau. Take advantage of this and check your report to see what you need to fix.
Remember, as you spring clean your wardrobe once a year to make sure you are bang on the fashion – make sure to consult your Financial Advisor, at least once a year to make sure you are on the right path to your financial freedom!
