Financial Spring Cleaning – Everything You Need to Know

After a long, cold winter, spring is finally starting to show. The mornings are becoming warmer, the sun is rising earlier by the day and there’s a general feeling of cheer in the air.

Spring is a great time to refresh after a winter spent indoors. Oftentimes this is when people choose to properly clean their houses, get rid of unwanted belongings and finally tackle the grub that has accumulated in all the hidden spots. A spring clean is also a way to feel light again, ready for a new season, both outdoors and in your life.

What is a financial spring clean?

While you’ve definitely heard of spring-cleaning in the home-cleaning sense, you might not have heard of financial spring-cleaning. Don’t worry; it is a fairly new concept, but definitely one you should know about. It could become your brand new annual spring ritual.

A financial spring clean gives you exactly the same fresh-start feeling you get from cleaning out your oven. It helps your to simplify your finances and to more easily achieve financial success.

Two things you can start doing today

There are many things you can do to streamline, organize, and plan your finances for the year ahead, or even for the decades ahead of you. Here are two you can tackle this spring:

Make an “In case of emergency” folder

If you are the head of the finances in your family, and if you’re living and working far away from home too, it is very important that you create a folder entitled “In case of emergency”. While you know exactly what your financial situation is, which bills need to be paid when, how much money needs to be transferred back home every month and how much to save, your spouse probably doesn’t. If something were to happen to you, the last thing you want your loved ones to worry about is money.

In this folder you should put all your account numbers, and especially the login details for them to access the accounts. Add all the contact numbers of any financial advisors or bankers you might have. Also remember to add a list of bills you pay each month, as well as investment and retirement fund info. Anything and everything you think your spouse will need in order to manage the finances while you’re away or even in hospital, needs to go in this folder. Just remember to save it in a safe place.

Reevaluate your budget

While you probably know exactly how much you can spend in a month, how much you need to save for the children’s stationary, and how much you can use to send the occasional gift back home, it might be helpful to have a fresh look at your budget.

Do yourself a favor and have a close look at the last three months’ worth of spending. There are of course the necessities, but make sure that all of them truly are necessities. Perhaps you’re still paying for a subscription to a gym you don’t actually go to. And seeing as it’s spring, you could consider trying outdoor exercise, which is free by definition. Look closely at the amount of money you and your family back home spend on luxury food items or even restaurant meals. Can you cut down on some of those?

By reevaluating where you’re spending more money than you need to, you could start a savings account for something like a family holiday for all of you. This will be something to look forward to and it will help motivate you to stick to your new budget. Because quality family time is worth so much more than empty purchases.

So take one day this spring, resist the temptation to spend the day out in the sun, and do a financial spring clean. You definitely won’t regret it!