Cleaning Finances

8 Ways to "Spring" Clean Your Finances This Year

Building wealth doesn’t just happen. Quite the opposite, in fact.

To create the kind of lifestyle you dream of requires careful planning and disciplined work. Just as your house doesn’t clean itself, your money drifts into chaos and atrophy if you ignore it for too long.

Just as you spring clean your home to give it a more thorough scrubbing, you should do the same with your finances.

Break out your financial dustpan and set aside a weekend morning to clean up your finances and plan how you’ll end this year in far better financial shape than when you started it.

1. Literally Clean Out Your Old Stuff


You can knock out several house cleaning and financial cleaning tasks simultaneously.

We all accumulate far too much stuff in the course of modern life. It slowly fills up our homes, leaving us constantly shuffling items around in a doomed attempt to tidy up.

Stop shuffling, and start decluttering. Go through every room, closet, and storage space with a fine-tooth comb. When in doubt, throw it out, sell it or give it to someone who could use it.

Separate your outgoing items into three piles: sell, donate, and trash. You’d be surprised what people will buy. There’s a market for your old mobile phones, computers and other electronics, clothes, furniture, and children’s belongings. Sell these on Craigslist, eBay, or Gumtree to recover some of your initial cost.

What you can’t sell, donate to a charitable organization. You can donate your clothesfurniture, and old electronics. Nearly everything you can’t sell can be donated. Your rubbish pile should end up being the smallest of the three.

Make sure you keep your donation receipts in case you decide to claim a tax deduction for charitable giving. You’ll need to itemise each of these deductions come tax time.

2. Clean Up Your Paperwork

Like most Aussies, I used to keep a big, bulky filing cabinet for important paperwork. Today however, I keep all of my important documents digitally. I back them up through two systems: an automated cloud backup service that constantly uploads my files for secure off-site storage, and an external hard drive I keep at home. If my laptop stops working after I spill water on it — which I’ve done — I won’t lose my critical documents.

We live in a world of increasingly digitized wallets, documentation, and financial services. Nearly all of my “cash” holdings are in a bank account. Even investors with hard assets like gold and silver don’t generally hold them as physical goods — they buy them as commodities through their brokerage account.


Make your file storage digital to be more organized and cut down on clutter. Borrow or rent a scanner if you don’t have access to one already to make the transition painless. For any original documents you simply can’t bear to part with, put them in a portable, fireproof safe. If something isn’t valuable enough to justify space in your fireproof safe, then it isn’t valuable enough to keep as a hard copy.

Finally, make sure you shred all financial or personal documents when you discard them to avoid identity theft

3. Set (or Check Progress on) Financial Goals for the Year


When you’re clear on your long-term financial goals, you can then work backward to set mid-term financial goals over the next two to five years and short-term financial goals for this year. For example, I want to reach financial independence within the next five years, so I set targets accordingly for net worth and passive income by the end of this year.

Your financial spring cleaning offers a perfect opportunity to check in on your progress. You can tweak and adjust your spending, savings, and investments as needed to put yourself on track for hitting your short-term targets for the end of this year.

Starting with long-term goals and then working backward is one way the wealthy think differently about money. The middle class budgets for today’s comfort, rather than their long-term plan for designing their perfect life.

By setting and reviewing your long-, mid-, and short-term goals, you can re-evaluate your immediate monthly budget to make sure it serves what you’re trying to accomplish.

4. Review Your Monthly Budget


Most people hate the “B” word: budgeting. It instantly conjures thoughts of sacrifice and giving up all the comforts they enjoy.

However, that’s only one way of looking at budgeting. After all, building wealth isn’t convenient. If it were, everyone would spend less and save more.

I look at budgeting through the lens of lifestyle design: I value international travel, passive income, and the ability to walk or bike everywhere. I don’t particularly care about living in an enormous house and filling it up with lots of things. 

Reframe how you look at budgeting. Instead of thinking in terms of sacrifice, think in terms of prioritisation and intentionally designing your perfect life based on what’s important to you. Instead of taking two years to save a deposit to buy a home, for example, you could probably do it in one if you cut $500 or $1,000 in monthly expenses.

Which comes back to prioritising. Would you rather spend $100 per month on Cable TV such as Foxtel, or save your deposit faster? The same goes for spending money on new clothes, gadgets, eating out, and any other discretionary expenses. Put even “necessary” expenses under the microscope. Even paying for housing is optional; just ask anyone who house hacks.

5. Cancel Unused or Unnecessary Subscriptions


You could spend $100 per month on cable TV. Or, you could spend $10 on a video streaming service like STAN or Netflix. However, the less obvious subscriptions are the ones that get most Aussies into trouble. Try this two-minute exercise.

List every single subscription you pay for, whether monthly or annually — video and music streaming, gym memberships, box subscriptions, landlines, antivirus software, hard drive backup services. You probably pay far more than you think. You can list these out manually or use an automated tools.

After you have a list of your subscriptions, apply a simple litmus test: Do I use this subscription multiple times a week, and does it make my life noticeably better? For instance, if you’ve been to the gym 10 times in the last month, that likely justifies keeping your membership. But if you’ve been once or twice, cancel your membership and switch to home workout routines instead. There are several free, high-quality resources that offer free, streaming workouts.

6. Plan & Budget for Remaining Irregular Expenses This Year


Irregular expenses are the fly in the ointment of most people’s budgets.

No one forgets to budget for their rent or mortgage payment. But most people forget to budget for wedding, birthday, shower, and holiday gifts, for example.

But just because these expenses don’t pop up every month, that doesn’t mean they don’t cost you money and eat into your budget. So set aside money in a high yield savings account. Then earmarked this account for irregular expenses.

You should also budget for travel expenses. You will probably go on at least one holiday this year.

Plan what you want to spend on these and other irregular expenses for the rest of the year, and set aside money accordingly.

7. Review Your Credit Report for Errors


The credit bureaus make mistakes all the time. Luckily, you can check your credit report for free once a year from each of the credit reporting agencies. The main ones are Equifax and Dun & Bradstreet.

Your financial spring cleaning makes a great time to pick through your report and look for errors. If you find any, you can follow the simple process of disputing credit report errors. It’s free and requires little effort on your part.

Once you’ve fixed any errors, consider signing up with a free credit monitoring service. They not only keep you posted about changes in your credit scores, but they also alert you if they notice suspicious patterns that might indicate identity theft.

8. Review Your Current Repayments for Loans and Insurance


Like most Aussies, I found it "too hard and time consuming" to go through this process. I like to set and forget. However by doing so, I'd miss out on thousands, sometimes tens of thousands in savings.


Review your current loans and insurance policies, and ascertain if you can obtain better rates, cheaper premiums, reduced fees.


Don't be afraid to call your bank, and see if they can offer you a better deal than you currently have.


If not, time to change!

By utilising services such as ours, Fits All Finance, enables you access to several Financiers and Insurers, as well as invaluable knowledge of the industry.  Essentially, we take all the "hard work" out of your hands.


We hope these tips have assisted, and if there is anything our staff can do to assist further, please contact us today. 

Final Word 


A clean home and clean finances don’t happen by mistake. They only happen when you go out of your way to make them happen.

Over time, your needs change as you meet your short- and mid-term goals change. Sometimes, even your long-term goals need a second look to make sure they truly represent your ideal life.

Set aside some time this spring to review your finances and tweak them where necessary. By taking the steps above just once a year, you can steer your life where you want it to go, rather than just drifting downstream like too many of us do.

                                   * Article does not constitute as advice, and is general in nature only*