7 Ways to Spring Clean Your Finances

Spring is right around the corner. This time of year is known for being when we reach for a broom, declutter cupboards and scrub the skirting boards, but what about your money?

Taking an opportunity to have a financial spring clean can declutter bad money habits, tidy up your budget, spruce up your savings and ensure you can afford all of the fun stuff coming up this year like holidays and birthdays.

Here’s what I am doing to spring clean my finances for a fresh start this year.

Cleaning up accounts

It’s quite rare to have just the one bank account and one savings account these days.

A lot of people have multiple accounts, plus maybe even multiple pensions, or retirement savings, as you’ve changed jobs over the years.

If you have multiple accounts collecting dust, hidden fees or barely any interest then it is definitely time to clean house.

Don’t forget to include money apps where you might have cash lurking, such as Plum and Emma.

Take stock of exactly where all of your money is.

I have money in various places:

Pensions
ISAs
Current account
Easy access savings account – this is where my emergency fund is kept
Investment account
Premium bonds

Next you want to:

Close old, rarely used accounts. Consider consolidating to make it easier to keep track of your money.
Move savings to high yield savings accounts. If your savings are currently sat in an account with 0.01% interest, you are leaving money on the table my friend.
Check in on your pension and whether you are saving enough to meet your goals for retirement. Small amounts of extra money can add up. For example, if you put an extra £100 into your pension per month you could have an extra £69,994 after 30 years, assuming a return of 4%. If the return is 6%, then you’ll have an extra £100,562. Worth it! You may not care now, you will when you are retirement age.

Decide whether your current monthly banking and budgeting systems are working for you. For example, I’ve found it much better to follow this routine for where I put my money once I’m paid:

Move money to joint account – this is where our bills are paid from.
Keep money for fun in a separate account – this is the money I know I can spend guilt-free.
Check in with my emergency fund – I like to have 3-6 months of emergency expenses.
Move money to short-term savings account – this is for upcoming expected costs such as birthdays and holidays.
Move money into investment account – this is my long-term money goals account and I will not touch this money for years.

Declutter your debt

Debt is like that junk drawer that you keep meaning to get around to clearing out but more stuff keeps finding its way in there and it just feels like an impossible task.

But the sooner you tackle that debt, the better. To start off:

Make a list of all your debts (yes, even the scary ones). Make a note of the interest rates you are paying on those.

Pick a payoff strategy:

Snowball Method – Pay off the smallest debt first for quick wins!
Avalanche Method – Pay off high-interest debts first to save money.

And if your credit card interest rates are high, call your provider and ask for a lower rate! You’d be surprised what they’ll do if you just ask. You can also consider transferring your credit card debt to a 0% interest credit card. This kicks the can down the road so you can pay it off without losing more and more money to interest.

If it feels overwhelming then seek out free impartial debt advice from one of the amazing consumer help charities such as Citizens Advice or StepChange.

Organise the paperwork

I do not get much financial paperwork these days, however a couple of my pension providers still send me letters (it’s nice to get post, even if it is about your pension).

Take some time to file paperwork and shred old statements you no longer need. If you don’t already have one, create a money HQ folder where all of your important documents are kept.

If you are self employed like me then remember to file receipts and check in with your digital records too, to make sure you have all of the info you need for your tax return. The deadline may not be for a while, but it’s worth doing a little legwork ahead of time.

Clean up your budget and fix money leaks

You know how random clutter piles up in your house? Same thing happens with your spending. Just like with the clothes in your wardrobe, it’s a good idea to take stock and decide what to ditch and what to keep.

Take 10 minutes to go through your budget and find ‘money leaks’—those little expenses that add up, like:
Daily takeout lunches – instead bring your own lunch and drinks from home
That regular takeout coffee
Subscriptions you never use (don’t forget to check your PayPal account as some may be leaving through there). Remember to check for annual subscriptions too that you may have missed.
Buying name-brand when generic is just as good

If it’s not bringing you joy or real value, cut it and watch your savings grow!

Refresh Your Savings Goals & Automate Them

Once you have a clearer picture of your budget, you can review your savings goals. Check in on how much you have and consider what it is that you want to achieve this year.

Things you need to consider when reviewing your savings:

Big one-offs you are saving for – such as a new house deposit or money for a new car. These expenses may not come this year, they may be a year or more off, but you can contribute towards them this year.
Expected unavoidable expenses – holiday, birthdays, Christmas, insurance renewal, car costs. I like to make sure I am saving a regular amount every month for these things. I add up the total cost of my unavoidable expenses, divide by 12 and that’s what I need to save.
Emergency fund – this is money in case anything goes wrong. I aim for 3-6 months of expenses in an easy access savings account.

I don’t have automation for a lot of my savings. I have automation into one account, but because my earnings vary so dramatically from month to month, I have to work by percentage of earnings. So I transfer on pay day. If I earn considerably more, then I increase the amount I save.

By doing all of this you are paying your future self and setting yourself up to avoid debt.

Commit to improving your financial education

One of the best things I’ve done for my money in recent years is to just take an interest in personal finances and money management.

I read the money advice columns in newspapers, I read articles from experts about the latest data on how much the average person earns or has saved, I read personal finance books to get inspiration for making solid financial decisions. It’s inspired me to make small changes now, with the expectation that they will add up to big improvements in the coming years and to take advantage of investing for my longer-term financial goals.

Doing this has helped me understand the potential pitfalls, such as the common scams and the fact that there’s no such thing as easy free money, and given me confidence in making financial decisions.

Make just ONE money move today

If all of this feels overwhelming, I get it. With spring cleaning and decluttering, I like to do it one small step at a time rather than a huge session. So I will take just one drawer, empty it, ditch stuff I don’t need, clean it and put it back in a better order.

That takes just 15 minutes but it’s an improvement. Over the course of a week, those small tasks add up and before you know it an entire room is improved.

So why not pick just one thing to get you started today. It could be:

Cancelling a useless subscription.
Check any accounts where money may be lurking – for example banking apps and any money-making apps you use such as survey sites like YouGov or cash back sites like Airtime Rewards or TopCashback. Many of these don’t pay you automatically, you have to withdraw!
Setting up an auto transfer to your savings account
Calculating your expected expenses for the year – Christmas, birthday, insurance renewals – and making a plan to afford those.
Check in on your pensions and seeing whether you are saving enough for the lifestyle you want in retirement (there are calculators online that will tell you how much you need).