Use the month of September to spring clean your finances

For most of us, the thought of spring cleaning our finances is overwhelming, to say the least, and certainly not something that can be achieved in a single sitting. If you’re intent on cleaning out your finances this Spring, consider breaking up the task into a set of daily activities spread over the month. Here are some suggestions:

1. Refresh your budget: As time goes by, our budgets tend to become reactionary – making more and more allowances for scope creep which, left unchecked, are given disproportionate space in our budgets. Use this opportunity to do a complete budget reset on a more proactive basis. Don’t be afraid to be completely ruthless when it comes to determining what constitutes a ‘want’ versus a ‘need’ – a task which may require some introspection and soul-searching.
2. Take an inventory of your debt: Debt, especially unsecured debt such as retail and credit card debt, is expensive and can be difficult to keep track of if you have bits and pieces lying around in your portfolio. Viewed in isolation, a little retail debt here and there may seem innocuous, but when viewed cumulatively relative to your overall financial position may be cause for concern. Make tackling your debt a priority.
3. Reassess your emergency fund: As your circumstances change over time, your emergency fund requirements may need to be reassessed. Several factors can affect how much of a cash cushion you need such as how secure your employment or income is, whether you have a spouse or partner that earns an income, and your monthly living expenses. If it’s been a while since taken realistic stock of your emergency fund requirements, take some time to recalibrate your needs.
4. Check your credit score: Your credit score is critical to securing financing and, while it can take years to build up a solid credit record, your score can be damaged – even inadvertently – by something as small as a late credit card payment. Also, with identity theft being so rife, we all run the risk of fraudsters racking up debt in our names without our knowledge – and, as such, it pays to do an annual online check to make sure your credit score is still intact.
5. Revisit your financial goals: If it’s been a while since you’ve considered your lifestyle goals and your financial objectives, take into consideration how your personal circumstances have changed and how your goals have evolved over time. Do you still want the same things you dreamed of five years ago? If not, make an effort to write down your dreams and goals as they currently stand.
6. Check your vehicle service book: Ensuring that your car is serviced on time by a reputable dealership will ensure that you receive good value for the vehicle upon resale, so be sure to diarise your car services so that you don’t miss a service. While you’re at it, check the condition of your tyres and build the costs of new tyres into your budget to avoid going into debt when the time arises.
7. Update your bank security: If you haven’t updated your banking password and security in a while, tighten your online security by changing your passwords and adding extra authentication if available. If you haven’t already done so, install a reliable password manager to ensure that all your passwords are protected.
8. File your tax returns: If you haven’t already done so, prioritise the filing of your 2022 tax returns, keeping in mind that regular taxpayers have until 24 October 2022 to submit their returns, while provision taxpayers have until 23 January 2023 to do so.
9. Clean up your financial filing system: In the busyness of life, we tend to neglect the correct filing of our documents which can cause problems down the line when it comes to locating important documents or information. Scan and file all important financial documents making sure that you shred those that you no longer need. Set up an online filing system that works for you and which allows for easy access to your financial information.
10. Check your subscriptions: Digital and online subscriptions have a way of accumulating over time and, unless you are in the habit of scrutinising your bank statements, a few have likely flown under the radar. Check your bank statements to ensure you know exactly what you are subscribed to and whether it is still relevant to your needs.
11. Optimise your banking app: The banking sector is highly competitive especially when it comes to tech innovation. Most banks are continually upgrading their online features, so spend time exploring the tech functionality offered by your bank such as budgeting and spend tracking, goal setting, money management, credit records, and net worth calculators. At the same time, go through your payment beneficiaries and delete those that are no longer used.
12. Check your Will: Take out your Will and make sure that the executor you’ve nominated is still the person you would like to wind up your estate should you die. If you have minor children, check that you are still happy with the nominated guardian and any trustees you’ve appointed to your testamentary trust. Make sure that your loved ones know where to find your original Will in the event of tragedy to avoid unnecessary delays.
13. Check your contact details: While you’re fixing up your online banking, double-check that your contact details are correctly loaded online, especially if you’ve changed email addresses or cell phone numbers. Incorrect information can result in you missing important information or notifications from your bank, which is not ideal.
14. Check beneficiary nominations on insurance policies: Most of us nominate our beneficiaries when first taking out a policy but seldom check that those nominations remain appropriate to our changed personal circumstances. Check your latest insurance policy to make sure that your nominated beneficiaries reflect your wishes.
15. Check insured value on short-term insurance policy: Check the insured amounts on your short-term insurance policy to make sure that you are adequately insured in respect of your home and household contents. As we accumulate material goods over time, it’s easy to forget to update the insurance company which in turn can leave us financially exposed should a claim event arise.
16. Maximise loyalty programmes and rewards: Certain loyalty programmes provide significant financial rewards in the form of vouchers, discounts, air miles
17. Consider your medical aid needs for 2023: Being September, your medical aid should soon announce its premium increases and benefit changes for next year, so give thought to what your healthcare needs will look like next year and how they may differ from this year. Will you have dependants coming off your medical aid? Have you recently been diagnosed with a chronic condition? Do you anticipate needing elective surgery in the near future? Are you planning to fall pregnant? If your circumstances have changed somewhat, you may need to consider upgrading to a more comprehensive medical aid plan.
18. Switch to online statements and payments: To keep better track of your finances – and to enhance security – switch as many accounts as possible to online. With postal delays being the norm, you run the risk of losing an invoice or missing a payment. Depending on your municipality, keep in mind that you may be able to view and pay your municipal bills online which is so much easier when it comes to keeping track.
19. Check vehicle license renewals: To avoid fines, diarise when your vehicle licenses are up for renewal so that you can apply in advance. At the same time, check online whether you have any outstanding traffic fines as these can come back to bite you when you least expect it. Unexpected fines and penalties can set back your budgeting and erode your emergency funds.
20. Unsubscribe from online retail newsletters: Marketing spam from online retailers tend to flood one’s mailbox and create unnecessary temptation to spend. It can be psychologically exhausting to resist ongoing sales, promotions, specials and discounts, so rather turn them off.
21. Consolidate your banking: If you have multiple bank accounts and cards, consider consolidating your banking and reducing the number of cards. Keeping track of multiple credit cards and repayments can be tricky and increases the risk of you missing a repayment which, in turn, can result in extra charges.
22. Maximise your tax deductions: Check whether you are using all tax deductions available to you by, for example, contributing towards a retirement fund, making use of a tax-free savings vehicle for longer-term savings, and donating to approved charities.
23. Sign a Living Will: A Living Will is a document designed to be your voice in the event of a medical emergency where you are unable to communicate. It is essentially a declaration that sets out your wishes to refuse any or certain medical treatment and care which could result in you being artificially kept alive where there is no hope of recovery and can be a blessing to your loved ones in times of crisis.
24. Streamline your debit orders: Go through your bank statements to make sure that your debit orders are correctly aligned with your inflows as this will reduce the chances of your account running into overdraft, incurring unnecessary interest, or having debit orders returned which, in turn, can result in additional bank charges.
25. Check your income protection: Review your income protection benefit to determine that your nominated income is at the appropriate level for your needs should you become either temporarily or permanently disabled. Also, check the waiting period that you’ve nominated on your policy and ensure that you have sufficient emergency cash to tide you through this period. Consider also whether any of your personal circumstances have changed which could impact your policy such as a change in smoker status, salary increase or change in occupation.
26. Reassess your spending habits: Take an honest look at your spending habits. Are you an emotional spender? Do you buy goods on impulse and then regret the purchase later? To what extent are your spending habits out of kilter with your planned budget? Do you hide purchases from your spouse or partner? What behaviour would you like to change and how do you intend to do it?
27. Buy a flask and a lunchbox: Convenience purchases are very often caused by a lack of planning. Not preparing your work meals and refreshments the day before can result in unnecessary spending on takeaway meals, coffees and refreshments which cumulatively can cost a fortune each month.
28. Check the investment strategy of your group retirement fund: If you’re contributing towards your employer group’s retirement fund, check whether your contributions are being directed towards the most appropriate investment strategy for your purposes. Group retirement funds generally offer a range of strategies for employees to choose from, and it’s important to ensure that you are not invested too conservatively or too aggressively for your time horizon, so be sure to check this out.
29. Prepare your festive season budget: Start planning your festive season budget now so that you’re fully prepared by the time the silly season starts and have a concrete plan to manage your finances responsibly throughout the December/January period.
30. Find a trusted advisor: If you don’t already have a financial advisor that you completely trust, consider finding a person that you can partner with on your financial planning journey. Word-of-mouth referrals are often best so let your friends and colleagues know that you’re in the market for a reputable advisor – preferably one who is completely independent and charges a professional fee for his/her services.

Have a super day.

Sue