15 Power tips for spring cleaning your finances

The impact of Covid-19, increasing fuel, electricity and commodity prices have seen many South Africans having too much month left at the end of their money. According to TransUnion’s Consumer Pulse Index, many consumers are defaulting on accounts, digging into savings and borrowing from friends and family to make ends meet.

“Whether you’re in a financial pickle or not, spring offers a great opportunity for a financial change of season – adopting a more calculated approach to managing your money, borrowing, budgeting, settling debt and saving,” says Susan Steward, spokesperson for Budget Insurance.

Budget Insurance offers the following tips:

1. Start NOW.

Putting your financial spring clean off until tomorrow, then next week and next month could see you wasting hundreds, perhaps even thousands of rands.

2. Go through your files and clear the clutter.

You should be filing all your payslips, invoices, receipts and tax certificates so that you have them handy when you are doing your tax returns each year – it could help you to get some money back. SARS requires you to keep these documents on file for a period of five years after the return is filed. That said, get rid of older documents that you don’t need any longer.

3. Create, maintain and revise your budget.

In a recent survey conducted by Budget Insurance and 1 Family 1 Stockpile, a 350 000 member strong Facebook group, a third of respondents said they don’t save money because they don’t stick to a budget. If you don’t have a monthly budget plan, now’s the time to start one.

4. Cut, but be careful.

It’s a good idea to cut nonessential expenses first, but be mindful. When money is tight there are certain expenses you may be tempted to cut, like insurance premiums on your vehicle and home. This could bring short-term relief but may end up costing you far more in the long run.

5. Revise your spending.

Are there ways to improve your spending habits behind the trolley, in banking fees, behind the wheel, at the dinner table, on your utility bill or subscriptions? Buying a less expensive brand, shopping for specials, saving a couple of rands per tank or racking up those savings with a loyalty card may seem insignificant, but over just a few months you could save thousands.

6. Stockpile goods.

You can save a substantial amount by looking out for and taking advantage of discounts and specials. By buying more, at a lower price, you’ll be able to stretch your rand and shrink your monthly shopping bill.

7. Review your insurance.

Not all insurers automatically revise your insurance premium each year, aside from an annual escalation. However, if your car is insured for market value and the value has depreciated, your premium should go down too

On home contents insurance, check your inventory to make sure that all unnecessary items are removed. Also don’t be set on sticking with one insurer – shop around.

8. Avoid buying on credit.

Reduce the number of credit cards you carry and pay with your debit card or in cash if possible. Never buy food or other necessities on credit or use one credit card to pay your debt on another one. Avoid taking higher credit limits, as they’ll tempt you to spend more.

Avoid instant gratification pressure – rather save up cash to buy what you want.

9. Don’t spend what you save.

Going through the effort of saving only to spend that money on non-essentials defeats the purpose. Rather use that money to settle your debt.

10. Get your emergency fund started or boost it.

With the constant threat of events like lockdowns and job losses, it’s recommended that you have three to six months’ worth of expenses saved up in an emergency fund. Start by saving a small amount each month. And don’t withdraw anything from this fund unless it’s a crisis.

11. The 10% saving goal and the 30-day rule.

Saving each month is hard, but you should make it a priority. The rule of thumb is to try to save 10% of your salary. And if you’re considering a luxury purchase, wait 30 days before deciding whether it is really worth it. Impulsive buying is one of the major factors that contribute towards debt.

12. Bank and invest

wisely. Check your bank fees carefully and look at the interest you earn on your savings. Could you be spending less or earning more? Research what other banks offer and look at other ways to invest your money. Also look at what rewards programmes are on offer, and take advantage of them.

13. Explore other income streams.

Turning your hobby into a side hustle, or helping a friend to market a business for a commission, for example, could supplement your income.

14. Stick to your goals, but be flexible.

Your budget and savings goals can be affected by events out of your control, like unexpected expenses. Revise them accordingly.

15. Reward yourself, motivate yourself.

If your goal was to save enough money to go on a holiday, then go ahead and enjoy that well-deserved break. It’s a good idea to set a budget for your trip to avoid subsequent post-holiday debt.

“Just like your home benefits from an annual spring clean, with a fresh look and less clutter, your wallet and your bank account can also reap the benefits of an annual financial spring clean,” Steward says.