10 ways to spring clean your finances

Spring has sprung and with it comes longer days and, of course, the start of a new financial year.

More than 90% of British households take part in a major spring clean at least once a year… but how many of us spring clean our finances?

We’re sharing 10 ways to get your finances in good shape this season.

1. Update your budget

Now’s a good time to determine where your finances are currently at. How much money comes into your account each month? What are your essential expenses? How much is typically left over at the end of each month to spend?

Once you have a better understanding of your financial situation, you can start to make a clear budget.

Are there areas where you could cut down spending? Is it possible to put aside more money each month? Decide how much you are going to spend (and save) going forward… and stick to it! This can help you to reach your financial goals much faster.

Top tip: It’s likely some of your bills will go up throughout the year, too, so take that into account when reworking your budget.

2. Boost your savings

It’s important to have accessible savings in case of emergencies so, after setting your budget, set yourself a savings goal too. This should be an amount of money you’re comfortable putting aside each month, particularly if you decide to automatically transfer a specific amount into your savings account.

Of course, you can choose to save even more throughout the year. Take a look at our easy money saving challenges for inspiration.  You’ll be surprised how quickly your savings pot will start to grow.

Top tip: Review where you’re keeping your savings, too. You might choose to put money aside in a fixed-rate savings account, or a tax-free ISA (you could save up to £20,000 each tax year this way).

3. Review your memberships and subscriptions

We often let subscriptions and membership fees come out of our bank accounts automatically, so it can be hard to keep track of exactly what you’re spending. Look closely at your bank statements and make note of all your membership and subscription costs. This will help you to identify which ones you could cancel, or which services you’re paying over-the-odds for.

Top tip: If you do decide to cancel any Direct Debits, pop the money into your savings account monthly instead so it won’t get swept away in day-to-day outgoings.

4. Shop around when it comes to renewals

When you’re reviewing your bank statements, make note of when key contracts are up for renewal. This includes things like your mortgage, mobile phone contract, broadband package, energy, car insurance or home insurance. Give yourself plenty of time to find the best deals before your current one expires or automatically renews.

Top tip: Don’t automatically go for the cheapest option, particularly when it comes to insurance. You must make sure you have the right level of cover in place so that, should the worst happen, you’re adequately protected. Always review the policy in full to make sure it suits your needs as well as your budget.

5. Manage your debts

Think about how much debt you have and your long-term plan for paying it off. It’s often best to pay off debt with the highest APR first as this could save you paying expensive interest rates.

Do you have lots of different types of debts, each with different interest rates and payment dates? A debt consolidation loan could make it easier for you to manage your finances. It allows you to take out a loan for the amount you need to pay off all existing debts, leaving just one fixed-rate monthly repayment to think about.

Top tip: You may find a debt consolidation loan cheaper than paying off multiple high-interest debts, if the level of interest paid is lower than that of the debts consolidated. It could be a good idea to seek free debt advice before taking out a loan as a way of managing debt, though.

6. Check your credit report

Your credit file could make or break future credit applications, so it’s important to ensure it is up to date and free from any errors or inaccuracies. Make sure you are on the electoral register with your current address, too.

It’s worth checking your credit report at least every year or before you apply for a financial product such as a mortgage or personal loan. You can get a free copy of your report from any of the main credit reference agencies: Experian, Equifax and TransUnion.

Top tip: If you’re concerned your credit history might be holding you back, there are a few things you can do to try and improve your credit score. For example, consistently making any repayments on time is one of the best things you can do.

7. Plan for your future

It’s easy to leave your pension running in the background, but it’s always worth keeping an eye on it to make sure you’re getting the maximum value.

Are you on track for a comfortable retirement? Review your pension contributions to make sure they’re still suitable for your needs. You may decide to pay more into your pension to ensure you’ll have enough money saved by the time you retire.

Top tip: Get a statement from each pension you have to help you estimate how much income they might generate when you retire. Make sure to factor in any savings you have – plus money built up in your State Pension - as well.

8. Maximise your rewards

Make the most of a reward credit card that offers cash back or points for certain purchases. However, it’s advisable to only use a credit card if you can comfortably pay off the balance in full at the end of every month (to avoid paying potentially hefty interest charges).

You may wish to consider swapping current account providers if there’s a reward for doing so too. Many high street banks offer new customers a small cash reward for swapping their current account so if you don’t have any special benefits or conditions with your current provider, it might be worth making that switch.

Top tip: You don’t necessarily need to get a special card to get cashback rewards. Cashback sites such as Topcashback or Quidco give you money back when you shop at thousands of different retailers.

9. Plan ahead for big purchases

Last-minute spending can often work out to be more expensive, so budget for any major purchases such as prepping for a home improvement project or planning your summer holidays now.

While you’re busy working out your budget, figure out how much you want to spend on your goals for the rest of the year. This will help to ensure you don’t spend more than you can afford once you get properly stuck in.

Top tip: Give yourself plenty of time to seek out deals. From sales on DIY tools to social media offers from your favourite hotel, keep an eye out for discounts and bargains long before your planned dates.

10. Have a good clear out

Spring cleaning your home could form part of your financial spring clean too. Give your home a thorough clear out and you may be surprised by what you can find. From unwanted gifts to nearly new clothes you won’t wear any more, there are all sorts of things you can sell via online marketplaces such as Vinted or eBay.

Top tip: If you have loads of items to get rid of, why not host a swap party with your friends or family? It can be a fun way of exchanging items you no longer need.

It’s time to get your finances back on track

We hope these top tips help you to make a start on your financial spring clean. However, if you need a little more help organising your finances as effectively as possible, you may wish to work with a qualified financial advisor.

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