The start of a new season is a great time to review your financial situation and set new goals for the year ahead. But what does spring cleaning your finances really mean? Read on to find out.
With its longer evenings, warm weather, and a sense of renewal in the air, spring is the perfect time to take stock of your finances. April also marks the start of a new financial year, which is even more reason to make changes now ahead of a summer of fun. Whether you’re happy with your current situation or know that your bank balance could do with some work, it’s always worth giving your finances a spring clean.
1. Refresh your budget
The most effective budgets have some flexibility built in and can be amended to work with your current financial circumstances. In winter, for example, you might need to have more room in your budget for utility bills and fuel as you spend more on heating, lighting, and travelling by car. When spring rolls around, revisit your budget to ensure it’s still fit for purpose. You might want to increase the amount you set aside for socialising, top up your holiday fund, or up your food budget to reflect increases in the cost of living.
2. Review your subscriptions and money habits
While a single subscription might not seem very expensive on its own, they can still add up over time. You might be surprised at how few of your active subscriptions you use regularly. To start a spring clean of your subscriptions, sit down and go through your bank statement for the past month. Make a note of every recurring payment you see – these might include your Netflix subscription, gym membership, premium delivery at your favourite online shop, or a mobile phone insurance plan. If you find payments for subscriptions that you don’t use or could live without, now might be the time to cancel them or look for a cheaper alternative.
3. Check your credit score
Your credit score can go up and down over time, so making it a habit to check your credit score regularly could come in handy when you next need to apply for a credit card or loan. There are three main credit reference agencies in the UK – Experian, TransUnion, and Equifax – and each one uses different information to calculate your score. The good news is that you can check your score for free. During your financial spring clean, look over the report to spot any factors that are influencing any dips or boosts in your score and double-check whether there are any mistakes or payments you don’t recognise.
4. Update your financial goals
Financial goals that you set on New Year’s Day can evolve as the year goes on. Spring is a great time to take stock, check whether you’re on track to meet your goals, and make sure they’re still the right goals for you. Perhaps you’ve been saving for a big summer holiday, but now you’ve just got engaged and have a wedding fund to build. Or maybe you’ve changed jobs and need to focus on covering your everyday costs rather than paying down your student debt.
Remember that there’s no right or wrong when it comes to setting financial goals. The goals you work towards should be things that will make a difference to you and your individual circumstances, rather than arbitrary choices. A goal like saving for a house deposit, for example, might not be as important to you as building a generous travel fund – and that’s completely okay.
5. Invest in your emergency fund
As its name suggests, your emergency fund is there to provide a cushion when life throws unexpected challenges your way. It could be used to cover your expenses if you lose your job, get a new boiler, or need to pay for urgent car repairs. The end of the financial year and the start of spring is a good opportunity to look at your emergency fund and see if you have any spare cash that you can add in. Ideally, aim to have at least three months of living expenses saved and always replenish any money that you spend from it.
6. Seek debt advice
If you’ve been trying to reduce your debts for a while but are still finding it hard to get them under control, the new season could signal it’s time to spring clean your approach to your debts and seek professional help. Start by exploring your options and you might be surprised by how much better you feel straightaway. Not only can talking to a friendly debt expert help you identify different debt management solutions and find the right option for you, but receiving impartial, confidential advice could also improve your mental health.
Need support with spring cleaning your finances? Our friendly team of experts is here to help. Give us a call on 0161 8260 585 or send a message here
