Spring has sprung! The daffodils are out, there’s blossom appearing on the trees, and the days are getting just a tad longer. Instead of the alarm clock, I’m being woken up by birdsong, (I would like it if they could fit in with my sleep patterns a little more), but I’m not complaining. It may have been a comparatively mild winter, but it hasn’t been an easy one for many struggling with cost of living and mortgage rate increases. In one way or another, I think we have all been looking forward to the fresh start that spring seems to herald.
As spring emerges, it’s time to pack away the winter layers, the electric blanket and winter duvets get put back in the top cupboard, and the furniture is stripped of its winter throws and given a thorough clean. The windows and doors are open wide to embrace the warmth of the new season. Then we realise we can’t see out of them, so the windows got a fresh new look and are cleaned until they sparkle.
It’s also time to go shopping in our wardrobes. Weeding out things that no longer fit; getting a pleasant surprise when something we’d been holding onto hoping to shrink back into it, looks better on us than last year.
It's funny how the things we disliked as kids became part of our adult routines. I find myself carrying on this spring-cleaning tradition. Mum will be proud of me. I've added a modern twist—spring cleaning my finances too.
Here are a few things that you can do to spring clean your finances as well as your home.
1. Declutter your paperwork
Take a page from Marie Kondo and ditch anything that doesn't "spark joy" - or, in this case, necessity.
It’s time to dive into the filing cabinet or the box that’s lurking in the bottom of the wardrobe. Sort your financial documents into three piles: one to save and the other to shred and one that you aren’t quite sure what to do with. Vital papers like birth certificates and tax records should be kept, it's a good idea to digitise as much as possible. And don't forget to shred sensitive documents to protect against identity theft. Hopefully, the I’m not sure what to do with it pile isn’t too large, pop that back in the box, and if you haven’t looked at it until next Spring, it can probably go. I found the purchase documents for a car I sold years ago. Goodness knows why I still had that in my files!
2. Reduce future paper clutter
I know we tell ourselves every time a piece of paper arrives in the post, that we really should get it emailed to us, but unless we are in front of our laptop, we don’t tend to do it. But now you have sorted your paperwork, make yourself a cuppa and jump onto your laptop, and either email or just login and opt for digital statements to reduce the piles of paper you need to sort through next year. You could set up alerts, so you never miss an important payment, and to make sure you stay on top of your inbox.
3. Clean up your credit file
When did you last check your credit report? We don’t tend to think about it very often, but it is worth running a check on yourself just to make sure nothing untoward has popped up that you may not know about it, and that your contact details are correct. You can request a credit check on yourself, it’s free. The things to look out for are
- Missed payments you didn’t know about,
- Credit accounts that you never applied for
- Credit enquiries you never approved
- Defaults you didn’t know about.
If you do find anything wrong, you can ask to have it corrected.
I got a bit of a surprise when I did this for the first time many years ago. I discovered an ex-partner of mine was trying to get credit by pretending we were still together, so every time he asked for credit, I got checked as well. The Privacy Act has stopped a lot of this type of behaviour, but it doesn’t hurt to have a quick look just to be on the safe side.
4. Refresh your passwords
Oh dear, passwords… It’s so much easier to have the same password for everything isn’t it. But that also puts us in a high-risk category, should some unscrupulous person figure out what that one password is. Change passwords regularly and use a password manager for added security. Set up two-factor authentication to protect your financial accounts. I know it’s a pain, but again better to be safe than sorry. Once you have the system set up, the ongoing maintenance hopefully won’t take too long.
5. Review your legal stuff
Review and if necessary update your wills and any other time sensitive documents like Trusts, contracting out agreements and Power of Attorney’s to reflect any life changes. If you don’t have a will, get one done. You may think you have no assets to leave to anyone, but what about your KiwiSaver? That’s an asset too. Make sure your insurance policies (including medical) are up to date. Five years can pass by very quickly if you don’t do a quick annual review.
6. Close old accounts
Review your banking requirements. They change over time as well. You might have an old bank account that you haven’t used for ages. Do you still need it? What about credit and store cards? All those loyalty cards that can clutter up our wallets. Not to mention coffee cards… You get the idea, if you don’t use it, close it!
7. Kick one bad financial habit
This spring, commit to breaking at least one unhelpful financial behaviour. Is there something you do out of habit, that you could change that would save you a bit of money that you could apply to something else. I had a habit of filling up with petrol on the way home from the office (this is when I had an office), not only would I buy petrol, but as it was the end of the day, I also had the munchies, so I would buy some snacks to eat on the drive home. I was looking at my fuel expense wondering why it was going up, when the penny dropped. So, I started filling up with fuel on the way to the office instead, it shaved a few dollars a week off my fuel bill, and probably a few inches off my waistline as well!
Tidying up your financial life can be just as satisfying as getting your home in order. After all, a well-organised financial house makes for a more peaceful mind too.
*Lynda Moore is a Money Mentalist coach and New Zealand’s only certified New Money Story® mentor. Lynda helps you understand why you do the things you do with your money, when we all know we should spend less than we earn. You can contact her here.
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