If financial wellness is one of your goals the first step to success is decluttering your finances. Credit card statements, gas and electricity bills, then there’s strata fees, council rates, cable TV, streaming services, phone, internet and gym memberships. We have so many pieces of financial papers and documents online these days is it any wonder we can’t keep track of it all?
If you’re really serious about decluttering your finances the first thing you need to do is take stock of the situation. Ask yourself these 5 questions:
- What exactly are you spending and where?
- How many bank accounts are you operating?
- What are you paying for in terms of fees and penalties?
- What charges do you have coming out of your accounts that you’ve forgotten about?
- How are you paying your bills? Are you settling them immediately or letting them linger to be forgotten or accumulate further debt?
Follow our helpful tips and you’ll soon be on the road to financial wellness once more.
Check your statements
Just how many bank accounts and credit cards do you have lying around in use or disuse? Each one of these accounts has a statement and these statements are like a window into the heart of your financial wellbeing. Examine them closely and you’ll soon get a better picture of your situation.
Check for automatic payments, interest rates and fees and charges. Are there any accounts that you no longer use? Think about shutting them down or transferring everything into a single account.
Ask yourself these 5 questions:
- Are you running up expenses on more than one credit card?
- Does one credit card have a higher interest rate than the other?
- Could you consider a balance transfer to combine your credit card debt?
- Is your bank charging you excess transaction fees or fees for low activities?
- Can you swap to a different account or increase your transactions and save?
If you transfer to a zero interest free period account then make good use of the interest-free period to wipe off as much debt as you can. When that interest free period has expired at least your debt will be consolidated so your monthly payments should also lessen.
I didn’t buy that
Check your statements for inaccuracies. Just like humans, technology is fallible. It doesn’t get everything right all of the time, sometimes there are glitches. Have you been charged multiple times for the same transaction? Is that automatic payment you set up for your life insurance taking money more frequently than it should? Automatic payments make life easier but mistakes still happen and if you don’t check your statements you’ll just lose money unnecessarily.
Set up automatic payments
Setting up automatic payments for your bills such as car payments, loans, utilities, strata and council fees is a great way to stay on top of your finances. It’s also worth setting up an automatic savings debit – money that is transferred out of your wages each month and put aside for a rainy day. Then should something unexpected occur and you need extra cash fast, you will have money to draw out.
Remember that gym membership you never use?
It’s not just gym memberships that people forget about that wear a hole in their pockets and their bank balances. There are countless services we subscribe to these days that cost us on a monthly basis. Our passion for entertainment means we often have multiple subscription services such as Netflix, Stan, Hulu and Amazon Prime as well as cable TV or Fetch services.
For example, Amazon Prime only costs you a few dollars a month but when you couple it together with everything else you’re looking at $40 a month or so in subscription fees. Is your thirst for your latest favourite show really worth it? Then there’s Spotify and Apple Music. You’ve probably signed up for a trial with them both at some stage and now you’re paying the price thanks to auto-renew. If you failed to read the fine-print you will probably not have noticed the onus is on you to opt out. Ker-ching! That’s a lot of wasted money!
Get rid of all those paper receipts and opt for a receipt app such as Receipt Bank, One Receipt or ShoeBox to keep track of your expenses. You’ll love ridding yourself of all that clutter. Shred all those paper bills and statements you no longer need. Order your new statements as digital copies and that way you can keep everything on the cloud. Better still, if you run your own business, invest in a cloud accounting solution and you can integrate your receipts straight into your accounting software. Technology can really assist you to declutter your finances.
Just as spring cleaning your house can give you an instant lift and help you focus your energies, decluttering your finances also brings you newfound clarity and will help you have a big picture view of your financial wellbeing.