It is important to make the time to review your financial commitments at least once a year, and attend to your personal finances in the same way you would your home. Reviewing your finances can help you to face your financial reality and be a great tool in ensuring your long-term financial wellness. How about starting by spring-cleaning your finances?
Here are five things to do on your financial spring-cleaning day:
1. Evaluate your budget. Budgeting has negative connotations for many people, who see it as something that deprives them of spending. A budget is simply a plan for your money and is often a good place to start, as it shows you what you are receiving and what you are spending your money on. Creating a budget is the best way to help you allocate future funds optimally.
2. Review your debts. Compound growth works for you when you’re investing but can work against you when you’re borrowing, so make sure you review your debts too. Being in debt can feel like you are drowning and unable to come up for air. By reviewing your debt, you can prioritise paying off your most expensive credit first, so that you service your debt more efficiently.