Spring is known as the time of year for refreshing and reorganising, but your finances probably aren’t what come to mind when you think of a ‘spring clean’. Just like a cluttered home, a disorganised financial life can be overwhelming, and you could be doing yourself a disservice if you tend to ‘set-and-forget’.
It can be hard to know where to start, so whether you have a specific goal you’re working towards or you just want to get on top of things, here are some easy ways to refresh and reorganise your finances.
Give yourself a pay rise:
One of the best ways to improve your financial situation is by giving yourself a pay rise. This doesn’t mean asking for a raise at work—although that’s always an option—it means making a conscious effort to allocate more of your income toward your savings and increasing the amount whenever you receive an increase in your take-home pay.
You can make it even easier by scheduling automatic transfers into a savings account each time you get paid, helping to remove the temptation to spend and gradually building up your savings without even thinking about it.
Review your credit cards:
Credit cards can be handy to have for convenience, emergencies and to help improve your credit score, but they can also be a source of financial strain if not managed properly.
Take the time to review your credit card situation and what type of card you need. Reward credit cards tends to have higher interest rates and fees so if this no longer matches your level of spending or lifestyle, you might consider switching to a low fee or low rate credit card instead.
Reviewing and understanding your credit limit for each of your credit cards is also helpful, especially if you’re planning to purchase a home. Lenders will generally consider your entire credit limit, as opposed to just your outstanding balance when you’re looking to borrow. If your credit limit is $15,000 your borrowing power may be reduced by this amount as they need to ensure you can still make your home loan repayments if your credit card gets maxed out.
Find out more about our Low Rate Visa Credit Card which currently offers 0% interest on balance transfers for 12 months*.
Read our article ‘What is a Credit Card Balance Transfer?’
Consolidate debt:
If you're currently paying multiple debts, you know it can get challenging keeping on top of all your repayments. Debt consolidation is an easy way of managing your finances by taking out a new loan to pay off other existing debts.
There are two main benefits to this. The first is the peace of mind in only having to manage one repayment rather than juggling multiple amounts and due dates. The second benefit is potentially securing a loan at a lower interest rate than some of your existing debts which could save hundreds or even thousands of dollars in interest repayments.
Even if consolidation isn’t an option, prioritising paying off your high-interest debt first can help you get out of debt sooner.
Learn more about our personal loan to help consolidate your debts.
Use our Repayment Calculator to work out what your monthly repayments would be.
Update your passwords and store them securely:
If you're guilty of using the same one or two passwords for the past decade, consider this your reminder to update them. While it might seem like a hassle, if your information were to be stolen and the same password was used across multiple accounts, it could put your personal and financial information in jeopardy.
With fraud and scams on the rise and the tactics used by scammers becoming more and more sophisticated, it's time to upgrade your passwords to something that’s much harder to crack.
A few tips for updating your passwords:
- Use a minimum of 12 characters.
- Aim for a mix of upper-case and lower-case letters, symbols and numbers throughout the password, not just at the front and end.
- Avoid using easy to guess information such as a pet names, children names or birth dates.
- Do not use the same password twice. No matter how tempting this is, if your password is compromised and you've used it across multiple logins, it will allow hackers to access your personal information through other accounts much easier.
With all your new strong passwords, you’ll need a secure place to store them. A password management tool is a safe way to store your account logins and means you won't have to memorise all your passwords. There are a lot of great apps available to download, so you may just need to find the one that works for you.
Declutter financial paperwork:
Old financial paperwork can quickly pile up, adding unnecessary clutter to your life. Take some time to go through your documents, keeping only what’s necessary. Once you’ve decided what to keep, make sure to organise it in a way that makes it easy to find when you need it.
If you’re not sure what to keep or throw, check out our article ‘Sorting your financial paperwork – what to keep and how long for’.
Create an emergency fund:
Unforeseen emergencies can happen at any moment, and often our savings can suffer when funds are needed quickly. Being financially prepared for various emergencies is essential and can make a stressful situation much more manageable. Five crucial life emergencies you should budget for include: medical, job loss, home repairs, car repairs and natural disasters.
An emergency fund should be a separate savings account, away from your regular savings and day-to-day spending. Slowly build it up over time, and if you do need to access it, make sure to start building it back up again for the next time you need it.
Review your subscriptions:
The number of subscriptions to apps and streaming services that you’re paying for can steadily creep up over time. While you’re probably aware of the subscriptions you use all the time, have a think about those you might be paying for but not actively using.
Whether it’s service you’re now paying for after taking a free trial or a service you no longer use but it still debits from your account, unsubscribing to subscriptions you’re not using will put some money back in your pocket.
Update your will:
As life changes so should your will, and if you don’t yet have one, now is the time. Making a will is not something you often think to do when you’re young, however writing your will early on and updating it every 3-5 years or when you hit major life milestones is a good rule of thumb to go off, such as:
- Having children or grandchildren
- Receiving an inheritance
- Change in marital status
- Changes to your assets or income
- If any of your intended beneficiaries have passed away.
If you pass away without a will, the law determines where your assets will go. This is called intestacy and differs between each state or territory. When the law determines what happens to your assets, it can cause a lot of heartache and stress for your family during an already emotional time. Not only does it make it more complicated for them in terms of legal process, but it can mean your assets are distributed in way that does not reflect your wishes.
Spring cleaning your finances might not be as satisfying as cleaning out your shed or reorganising your pantry, but it’s arguably more important. By taking the above steps you can create a more secure and organised financial life that can help you avoid stress and set you on the right track for the year ahead.
Auswide Bank Ltd ABN 40 087 652 060, AFSL No. 239686, Australian credit licence 239686 is the credit issuer. Credit criteria, fees & charges and terms and conditions apply. This information provides general advice only. We do not provide advice based on any consideration of your personal objectives, needs or circumstances.
* The Balance Transfer offer can be withdrawn at anytime without notice. Balance transfers from other Auswide Bank credit cards or loans may not be accepted. Upon expiry of a Balance Transfer offer, any unpaid balance of the Balance Transfer reverts backs to the Purchase Rate.
