6 steps to spring clean your finances

Schalk Malan

Here are six ways to do this:

Review your expenses

Print out your bank statements for the past six months. Now, highlight your needs and wants with separate colours. Are you starting to see a pattern there? Needs like fuel, groceries, rates and taxes will obviously have to stay, but what about those wants, like the membership at the gym you rarely visit, pay television for channels you don't watch and dinners at expensive eateries? Cut some of them out - your budget will thank you for it!

Update your short- and long-term insurance

While you're going through your bank statements, zoom in on your insurance premiums. Go through your short-term insurance schedule to see if any unnecessary items are covered, and make sure new additions to your household are covered. It's always a good idea to contact two or three insurers to see if you can cut down your premiums - allocate some time for this in your calendar.

As for your long-term insurance, look at what's covered - has anything changed in your life? Remember - new additions to your life like a baby, home, job or spouse should also be covered here, and there are products that are designed to be flexible enough for you to add cover for this. Also take a look at how your premiums have increased over the past few years. If you're uncertain about your cover and how or why there's a spike in your premiums, ask an independent financial adviser to review this for you. There are new life insurance products available that are able to tailor your cover to each specific financial need, and change over time according to the need. This means your cover is priced appropriately - which could generate average savings of around 30% by simply stripping out the waste.

Tackle your debt

Start off by prioritising debt with high interest rates, like your credit card(s) and retail accounts. If you have a long-term debt facility like an access bond, it might be a good idea to consolidate your debt into that facility. While you're at it, consider closing as many high-interest accounts as possible or capping them. Alternatively, negotiate new pay-off terms with your creditors that will enable you to pay off your debt within a specified term, and ensure your payments are budgeted for in your monthly expenses.

Check your credit record

Now that we've talked about your debt, when was the last time you had a look at your credit record? All South Africans are allowed to obtain information on their credit scores for free once a year. You can do this through a variety of online services or ask your financial adviser for assistance. Don't be taken by surprise with a financial consultant or future employer flagging your credit score - check it yourself.

And while you're at it ...

There might be unexpected expenses that shouldn't be so unexpected, like outstanding traffic fines, unabridged birth certificates, licence- and passport renewals. Make sure everything is valid and up-to-date to prevent even more expenses, like a cancelled international trip because your passport expired or you don't have an unabridged birth certificate for your child.

Spring clean your cupboards

Lastly, what is a good spring clean without rearranging your cupboards? If you think this has nothing to do with your finances, you're wrong. Think of the state of your cupboards as a reflection of your finances. There might be items in there that you don't need, and you can bring in extra cash for your household by selling them. And before you spend this money on any wants, how about using it to pay off some of your debt? If this is too much of an effort for you, donate unwanted items to reputable organisations like your local hospice - some of them might even come and collect these items for you!