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January 2021 edition

Five ways to spring clean your finances

Written by Gerald Mwandiambira

The temperature is starting to climb and it’s almost safe to leave your scarf at home. With spring around the corner, it’s time to take a look at your finances and see where they could also do with a polish.

This five-step guide will help you to start the spring season with vigour especially since today is the last day of National Savings Month.

1. Evaluate your financial situation

Start with the big picture by looking at your assets and liabilities, then review your monthly expenses and budget. Do you keep to your budget every month or is it unrealistic? Your budget should be life-centred – allowing space and provision for the priorities that you have set.

Review your bank statements to make sure everything is in order and there is no fraudulent activity, overdraft fees or charges for services you don’t use anymore.

2. Cut any unnecessary costs

Review whether anything unnecessary has crept into your budget and become a burden. Decide what you really need to live a happy life within your means, and cut back on anything that isn’t helping you lead a carefree existence. If you can’t cut some costs completely, see if you can at least reduce them.

Review your debt payments: if you have a credit card, for example, try to look for a zero percent balance transfer card. Then try to keep paying the same amount on the card each month so that you can clear your debt quicker.

3. Check your investments and insurance

Make sure that you’re aware of what your insurance covers and that everything is up-to-date if you’ve had any major changes recently. Make sure that your beneficiaries are listed correctly and that everything is clear in the event of an emergency.

Do similar checks for any savings plans. Investigate any contributions, asset allocations or fees that are unclear in your investment portfolio, and arrange a meeting if you’re unsure as to how anything works.

If you have time, get a credit report to check if everything is correct, and consider investing your tax refund if you were given one so that you won’t be tempted to spend it.

4. Organise any clutter

Are you not quite sure where all your tax returns are hiding? Can you dispute an incorrect charge by locating your statements at the click of a finger? If not, then it’s time to organise all aspects of your finances for ease and efficiency.

Dedicate a filing cabinet to all your paperwork, or create folders on a computer or in a cloud for different aspects of your financial regime. It doesn’t have to be fancy; it just has to work for you, and it will save you a lot of hassle in the long run.

5. Reconnect with your goals

Financial goals and priorities can shift for reasons in and out of our control, so it’s important to check if you’re on track to achieve what’s important to you.

Review your goals and make sure that they’re SMART (specific, measurable, actionable, realistic and timely). Rethink your priorities and reconsider your plan of action if need be. Make a habit of checking in with yourself so that you can achieve your financial goals and make them a reality.

Gerald Mwandiambira is the Chief Executive Officer of the South African Savings Institute.