During March, many of us tend to make time to spring clean our finances and plan for the year and the future. In this blog, Kylie Darroch, Financial Adviser gives her top five tips to spring clean your finances.
1. Review your monthly budget
Make use of a simple spreadsheet or a budget planner to keep track of what you spend every month. Plan at the beginning of the month, basic expenditure, monthly bills and any other expenditure for that month. Then review it at the end of the month to see what you spent. Do you ever get to mid-month and wonder where all your money has gone? Coffee on the way to work every day, buying your lunch…it all adds up.
By categorising your spending, you can check where your money is being spent. If you are spending too much in some areas consistently then set yourself a budget and try to stick to it
When was the last time you reviewed your monthly bills? Have they increased? Are any due for renewal that you could potentially get a lower price on? It is good to review these annually to make sure you are on the best rates for things like gas and electricity.
2. Organise your paperwork
Start to file your financial paperwork such as your pensions statements, bills and mortgage statements. By doing this, will make it easier to find important documents relating to your finances should you require to talk to your Financial Adviser.
3. Review and consolidate any debt
Majority of people have some form of debt, it’s perfectly normal and isn’t anything to worry about as long as you can handle the level that you have. If you do have debt set a limit of what you can manage and aim to pay it off. For example, if you have credit cards, what interest are you paying? If you are out of an interest free period, it is likely the interest you are paying is substantially high. You might have the option to balance transfer any debt to another provider with 0% interest period which will help you tackle the debt.
4. Plan ahead for your short-term future
Think about what is happening in the short to medium term that you need to fund? Maybe you have a friend or family wedding on the horizon? Looking to plan for a holiday? Or even just funding for the festive season.
Saving regularly for future events makes it much easier to afford when the time comes around.
Once you have set your budget, review what level of disposable income you have available and start to put that away each month. It might be £100; it might be £25 but getting into the habit of putting something away will help.
5. Fund for the future
People tend to live in the here and now and don’t often think about their future goals and objectives for themselves or their family. It is so important as it will only help you to achieve what you want in life. If you don’t plan for it, it’s unlikely to happen.
Identify what the goal is? What do you want to achieve?
What is the timeline that you have until the event takes place?
What’s your available disposable income that you can start to save on a monthly basis? Discuss with your financial adviser the opportunities to invest for potential long-term growth which will enable you to make the most of your money and achieve your objectives.
When would you ideally like to retire? How much have you accumulated already and what level of income do you require when you are retired? Discuss with your financial adviser the opportunities to fund for your retirement.
By answering these questions can help you plan or refresh a current financial plan that you may already have.
If you have any questions about anything contained in this blog, please do not hesitate to contact Kylie Darroch or your usual Blythswood Associates Financial Adviser.