With the new financial year upon us, now is a good time to spring clean, de-clutter and renew your finances for a fresh start to 2015/2016. Here are a few simple steps to help kick-start your de-clutter and organise your finances.
Clean out your wallet
The first step to de-cluttering your finances is to clean out and re-organise your wallet or purse. Most of us carry our ID, credit cards, money, store cards, bus passes, and other important things in our wallets on a day-to-day basis. Having a clean and organised wallet can create a positive flow on effect to all other areas of your finances. So take 2 minutes each week to clean out and process those crumpled up receipts, organise your notes and loose change, and ensure you carry only the cards you need.
Tip: De-clutter your wallet by using apps to save store cards on your phone, such as Stocard.
Check your spending leaks
This can be an eye-opening experience and also help identify areas where you can easily save money. To recognize the leaks, try tracking all your earnings and spending over a set period - usually a month. If you pay for everything using your credit or debit card, review your latest bank statement and use it to look at your expenses.
Next, highlight any unnecessary purchases, frivolous spending patterns, and interest or late fees that can be avoided. Once identified, calculate how much this is costing you on a yearly basis and direct this money towards more important areas of your budget such as savings or paying personal debts.
Draw up a budget
One of the most important steps when taking control of your finances is to set a budget and stick to it. Budgeting is simply balancing your expenses with your income. A good budget will help to establish the foundation to financial success. There are many budget tools online you can use to create a budget and track your progress.
Re-evaluate your bank accounts
Another simple step in re-organising your finances is to re-evaluate your current bank accounts. Do you have an inactive bank account with a balance less than $5.00 that you no longer have a use for? Are you getting charged a monthly account-keeping fee for multiple accounts? Or maybe you need to re-structure your accounts to allow for a new savings goal. Look at consolidating these bank accounts, automate bill payments and pay money towards your savings first. This will keep account fees at a minimum and reduce possible overdue notices and expenses.
Consolidate and eliminate any unwanted personal debt
After you have re-evaluated all your bank accounts, the next natural step is to re-examine your current debt position. Do you have more than one personal loan or credit card that you are having difficulty in managing? If so, there is no time like the present to look into consolidating your debts or reviewing your mortgage to ensure you are getting the best value for money and to get things back on-track.
Remember, once you have consolidated your personal debts, such as credit balances, cut the card up and close the account to get rid of any temptation to fall into any old habits.
Review your insurances
When was the last time you reviewed your health, general or personal insurances? Do your policies meet your current needs and circumstances? Reviewing all your insurances could save you money and reduce your premium costs by allowing you to take advantage of recent industry enhancements, legislative changes and loyalty or multiple policy discounts.
Now is the perfect time to jump online and do some research, or consult with a financial planner to check on your current policies and look at alternative solutions.
Review and consolidate your super
Superannuation can be one of the largest assets we own, and if you have more than one super account you may be paying duplicate and/or unnecessary fees from money that should be accumulating to help fund your retirement. It is never too early to review, grow and consolidate your super - your future self will thank you for it.
There are a number of tools that can assist you. Check out the my.gov.au website or the ATO super seeker calculator to help you search for lost accounts and consolidate your funds online. Alternatively, you could make an appointment with a financial planner to do the heavy lifting for you. A good financial planner will provide you with a customized solution that best suits you, as well as complete all the paperwork on your behalf.
Remember, there's no time like the present to take charge and 'de-clutter' your finances. Being financially organised can help fast-track your FY 2015 - 2016 financial goals.