As I write this the sun is shining, I see blue skies, daffodils and there are rows of shiny Easter eggs in the shop. My favourite time of year, Spring has arrived!
As well as lots of chocolate we also associate this time of year with a good Spring Clean so here are some ways to declutter and organise your finances:
Clear out your documents
Does anyone else have that one drawer where all the post goes? Or have you embraced the Tech Revolution and gone ‘online’ so you don’t even need to look at those pesky documents.
It can be easy to ignore your financial documents or for them to become disorganised. But take stock at least once every year and make sure you have any important documents such as Life Insurance policy documents, pension and investment information, Wills all in one place so you have quick access to it when you need it.
Doing this will also help you evaluate what policies you have and what you don’t have. Over time, it can be easy to forget what policy you took out and for what reason.
If your circumstances have changed in recent years – for example, moving house, getting married, having children, changing jobs – you should be re-evaluating your finances, so decluttering your documents will be a good start before seeking financial advice.
What are you Spending your Money on?
When was the last time you took a long look at what you spend? With many of our bills having increased recently and with further increases expected over the coming months reviewing your spending now may highlight any areas you can reduce or cut. We all sign up to those free trials and subscriptions and then forget to cancel.
Just as going through your wardrobe can help you decide what you need to discard or keep, taking stock of your income and expenses will help you make smarter financial decisions.
With a clearer picture of your budget, you can decide how to use any surplus.
Ditch your debt
If you have any short-term debts such as credit cards or personal loans, these have high interest rates so can have a major impact on your finances. If they are ignored, they will only become bigger and cost more in the long run, so prioritise to pay these off as soon as possible.
Automate your savings & investments
Whether you are saving for the short term to build up an emergency buffer or for a holiday, or if you are looking at longer term investing, set up an automatic payment to come out of your bank account when you are paid each month.
This will remove the temptation to spend that money elsewhere! Start saving a small amount each month and gradually increase over time. It creates a snowball effect, which will build over time and will also give you a boost when you see your savings balance building up.
When you have started to build up some savings, or if you already have some, make sure you take control of it. Rising costs or inflation means that we need to make sure the money we save for the longer term will grow faster than costs are rising.
Interest rates are still very low, so keeping money in deposits over the longer term will mean that the value of our money will actually decrease in value in real terms. When you have put aside enough savings for your short-term needs, seek financial advice about the many investment options available to see what the best option for you is, and to ensure your money works as hard as you do.
With over 25 years of experience in the financial services sector, a BA Hons in Financial Services and a Diploma in Financial Planning Jo Dugdale set up Chartwell Financial Planners to provide Isle of Man residents with tailored and personalised advice in all areas of their financial planning.
Please contact Jo on joanne@chartwell.co.im or 801409 to arrange a no obligation chat or visit chartwell.co.im for further information.
