Freshen Up Your Finances: A Guide To Spring Cleaning Your Financial Life

As we near the end of summer and the kids are ready to go back to school, now is the perfect time to rejuvenate not just your home, but also your finances. Just as you declutter your physical space, it’s essential to tidy up your financial house for a clean and organized start to the season. Here’s how you can embark on your financial spring cleaning journey:

1. Review Your Budget: Start by dusting off your budget and giving it a thorough review. Look for any areas where you may have overspent during the winter months and adjust your budget accordingly for the spring season. Consider allocating more funds for outdoor activities or reallocating expenses from winter-related costs.
2. Check Your Credit Report: Pull your credit report from all the major credit reference agencies and review them for any errors or discrepancies. Spring is an excellent time to ensure that your credit report is accurate, as it can affect your ability to obtain loans or credit in the future. Address any inaccuracies promptly to maintain a healthy credit score.
3. Trim Expenses: Take a close look at your recurring expenses and identify any subscriptions or services that you no longer use or need. Canceling or negotiating lower rates for these expenses can free up extra cash in your budget. Use this opportunity to renegotiate bills such as tv, internet, or insurance to potentially secure better deals.
4. Organize Financial Documents: Gather all of your financial documents, including bank statements, tax documents, investment statements, and insurance policies. Create a filing system or utilise digital tools to organise and store these documents securely. Proper organisation makes it easier to track your finances and ensures that you have important documents readily available when needed.
5. Set Financial Goals: Spring is a great time to revisit your financial goals and assess your progress. Whether you’re saving for a holiday, a new home, or retirement, take stock of where you stand and adjust your goals as necessary. Break down larger goals into smaller, actionable steps to make them more attainable.
6. Declutter Your Investments: Review your investment portfolio and consider rebalancing it to ensure that it aligns with your financial goals and risk tolerance. Sell off underperforming investments and reallocate funds to better-performing assets or sectors. Diversification is key to mitigating risk and maximising returns over the long term.
7. Plan for Tax Season or Negotiate a Raise: If you’re self-employed, consider using the spring season to prepare for next year’s tax season by organising your tax documents and receipts. Consider consulting with a tax professional to explore potential deductions or tax-saving strategies. Making tax planning a year-round habit can help you minimise your tax liability and maximise your savings. If you’re a PAYE employee, consider negotiating a raise with your boss and tell them what you bring to the table. Consider saying something like “Based on my skills and experience, coupled with my performance over the last year (give example) and looking at the market rate, I’m looking at a range of £???-£???. What can we do to get there?”
8. Boost Your Emergency Fund: If you don’t already have an emergency fund, or if it’s not as robust as you’d like it to be, spring is an ideal time to start building or replenishing it. Aim to set aside enough savings to cover three to six months’ worth of living expenses. Automate regular contributions to your emergency fund to make saving effortless. Make sure it is in an instant access savings account with a good rate of interest. At the moment, 4-5% is not unreasonable. This is of course subject to change frequently and is only accurate at this time of writing.

By taking the time to spring clean your finances, you can set yourself up for financial success and peace of mind in the months ahead. Just like tidying up your home, a little effort and attention to detail can go a long way toward achieving financial well-being. So roll up your sleeves, grab your financial mop and broom, and get ready to freshen up your finances for a brighter financial future.

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*Quick disclaimer – I am not a financial advisor, I do not give financial advice and you are responsible for your own financial wellbeing 🙂

Lauren <3