Spring has officially sprung here in Australia! With the turn of the seasons comes the age-old tradition of taking time to do a thorough clean of all the accumulated household junk from the last year. While you are in the cleaning mood, you might want to take a critical look at cleaning your finances too. Giving yourself time for a monetary makeover at least once a year could help you keep cash in your wallet and financial stress at bay.
Before you start diving into the specifics of your finances, it may be worth it to take some time to consider some of these questions carefully:
What do you value spending your money on and does that match up with your spending?
Do you spend more than you make each pay cycle?
What are your long-term financial goals?
Does your paycheck go mostly into paying off debt or expenses or savings?
How quickly do you usually spend your paycheck?
A thorough look into what you spend money on is an eye-opening experience. Maybe it’s that audiobook subscription that is $14.99 a month, but you haven’t listened since you got it. Or maybe seeing how much you spend on getting coffee every month will shock you into brewing from home.
Here is a quick and simple checklist to get your financial renovation underway.
Go through your statements line by line for the past couple of years.
Do you recognize each transaction? Does what you are spending money on match up with your values from the question above? If there are any items that you may have missed or you no longer value or want to spend money on, highlight them. This doesn’t mean you have to give it. It is merely a good way to keep track of those items to come back to or keep in mind.
Are you paying more than the minimum payment on your credit card each month?
If not, your credit card debt may quickly become out of control. If it already has, you can try and mitigate the problem by transferring one or multiple credit card debts into a debt consolidation loan with the potential for a lower interest rate and a single easy payment.
Do a deep clean of your monthly subscriptions
Often we sign up for a subscription, don’t use it, and then forget we are paying for it every month. Once forgotten, however, we still pay for these programs every 30 days and after a long time those fees can stack up. You can check for monthly subscriptions by going through your monthly statement line by line.
Start a savings account
The best part about saving is that small amounts slowly build up to useful amounts over time. Say that you are strapped for cash but manage to save $10 a week (the price of two coffees) - you will accumulate $520 by the end of the year for that thing you have your eye on, or the next unexpected bill you have to pay.
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