Spring Clean Your Finances

Spring flowers, spring winds, time to prepare for summer. That means tidying up the garden, clearing out the garage, the kitchen cupboards and the wardrobes. It’s also a good time to put your personal finances under scrutiny.

Now that the end of the last tax year is long past, clear out your paperwork. For tax purposes, financial records must be kept for seven years, not forever! Store your records in annual files so you can easily get rid of your oldest file and start a new one for the coming tax year.

Storage of important documents needs careful consideration. Keeping a scanned copy of your documents on a portable disk drive, flash drive, or in the ‘cloud’ enables them to be accessed from wherever you are in the event of a disaster. Access to certain scanned files can be given to another family member in the event that something happens to you. While you are at it, make sure you have an up-to-date Will.

When you are sorting out your bank and credit card statements, take the last few months of statements and go through them with three coloured highlighters. Use one colour for essential spending of fixed amounts such as rates, insurance, rent and mortgage payments. Use another for essential items where the amount is not fixed, such as food and petrol. The third colour is for anything that is not essential, such as dining out and coffees. This will give you a good idea of where you money is going.

Spring clean your debts by adding up how much you owe and the rate of interest you are paying, then set up a plan to get rid of as much debt as you can before the end of the year. It’s less than four months till Christmas!