The 2021 checklist for spring cleaning your finances
Spring has sprung and you know what that means…spring cleaning! But we’re not talking about polishing your cupboards, we’re talking about spring cleaning your finances! We’ve put together this ultimate checklist to help you deep clean your money affairs.
1. Build an emergency fund
An emergency fund is a stash of money set aside to help navigate those financial dilemmas life throws at us. According to Finder, 31% of Australians don’t have enough savings to cover even one month of living expenses. To get started, all you need to do is set a goal to put some money aside each month. This doesn’t have to be a big amount, you just need to make sure you don’t tap into it.
2. Get rid of bad spending habits
A spring clean is a great way to get rid of things that no longer serve you. We’re not just talking about items around the house. This could also be applied to your unwanted spending habits too. Look over your spending and find patterns that are detrimental to your finances and take steps to eliminate them. Don’t be too harsh on yourself as it takes time and dedication to reform your spending habits. But your future self will thank you for it!
3. Cancel unused or unnecessary subscriptions
It’s hard to keep track of all the sneaky subscriptions and the truth is, you’re probably paying for them way more than you think. Go through your bills and bank statements and list every single subscriptions you’re currently paying (eg. music streaming, gym memberships, antivirus software etc). And then ask yourself: ‘do I use these subscriptions regularly, and do they really make my life better?’ If the answer is no – cancel them. This will save you money which can go into building your emergency fund.
4. Plan and budget for upcoming expenses
Let’s face it, no one forgets to budget for their rent or food. But people do tend to forget to budget for weddings, birthday gifts or even a holiday! And these expenses really eat into your budget if you don’t plan for it. Pull out your diary to see what’s coming up in the next few months. Start putting a little money aside each pay cycle so you can budget for upcoming expenses.
5. Sweep out your debt
Got a loan or a credit card debt you need to pay off? It’s important that you stick to your payment plan but what’s better is to make extra repayments or pay it off sooner. By paying off your debt quicker, it’ll save you interest. Set up a debt payment plan today. It’s ok that you may not be able to pay everything off this spring, but by setting up a plan you’re taking the first steps to improve your situation. You might also consider bundling multiple debts into one convenient payment.
6. Check your credit report
Staying on top of your credit report will help you understand how you manage your finances can impact your ability to borrow in the future. Did you know you can check your credit report once every 3 months for free? You can request a copy of your credit report from these credit reporting bodies:
Pull your credit report today to see how your score changed over time and clean it up if needed.
Make sure your finances don’t miss out on an annual deep-clean!