Experts share money tips for a financial spring cleaning session

Money experts say spotting your spending messes is a key step in cleaning up household finances. Here’s where to find them.

MyBudget founder Tammy Barton says spring cleaning leads to big savings.

Spring cleaning is a handy way for households to make a fresh start, and when it comes to money matters now is a great time to switch your personal finances from stagnant to vibrant.

The first step in cleaning up your spending and saving is knowing where your money goes, and the past decade’s boom in digital money, online shopping and apps on smart devices has added a new twist.

“Technology, particularly mobile payments and online shopping, makes it easier to spend money impulsively,” says money coach Karen Eley.

The small size of many payments, and the way they automatically depart our bank and credit card accounts, can make them easy to miss.

For a quick two-minute check, have a look at your smartphone’s settings to see how many subscriptions you pay for games, music, educational aids, e-books and streaming services. If you use them all, that’s good, but if you don’t, consider a clean-out.

TECH CAN HELP, TOO

Eley says consumers can use technology to their advantage. “I love online platforms such as Cash Rewards to get cash backs on items I purchase,” she says.

“These are great as long as you are disciplined with your spending.”

Cashflow apps and Excel or other spreadsheets can help people track where their money goes, Eley says, while those who are less tech-savvy can use a pen and paper to write down everything they spend for 30 days.

“All of these methods will give you clarity and information of where your money has been going,” she says.

Money coach Karen Eley says do an inventory of your banks accounts and debts. Picture: Supplied

A cashflow audit is her top tip for financial spring cleaning. “Reviewing your outgoings can highlight items you are being charged for that you’re no longer using or need.”

“It’s also worth doing an inventory of the number of bank accounts, credit cards, loans and super funds we have. Assess if you’re still using all of them or if dormant accounts can be repurposed for a new savings or spending goal.”

INSURANCE CHECK

Eley says people should review security measures on their financial accounts, such as antivirus protection and passwords, and check whether their insurance levels are appropriate for their current needs.

“Maybe you’ve sold, bought or replaced insurable assets and need to update your policies,” she says.

MyBudget founder and director Tammy Barton says insurance is an area where huge savings can be made.

“I recently compared my home and contents insurance bill against competitors using Compare The Market,” she says.

“For the same cover, I am now saving $1700 a year — with the same insurer!”

“Being insured is an important step to spring clean your finances, but you don’t want to overpay for insurance you don’t need or find out that you’re underinsured.”

Online calculators can help people work out if their cover is correct, and most are free.

SMALL CHANGES

Barton calls financial spring cleaning a money makeover.

“With the cost of living soaring, it’s more important than ever to get a handle on our money,” she says.

Financial spring cleaning is “about making small changes that add up to big savings over time”.

Barton’s biggest cleaning tips are to create a budget and track your expenses, shop around for better deals, compare your mortgage with competing lenders and cut the cord on unused subscriptions.

“Whether it’s your energy provider, insurance, or even your groceries, don’t be afraid to compare prices and switch to a better deal. The savings can be significant.”

AVOID DIGITAL SPENDING TRAPS

• Be aware of micro-transactions such as in-app purchases than regularly drain your money.

• Review your iTunes, Google Play and other online accounts, and consider setting spending limits or using parental controls if needed.

• Unsubscribe from tempting emails of SMS services that deliver hard-to-relist marketing messages.

• Set up a new savings account and ask your employer to pay a set amount into this, creating a savings habit that will help clean up your finances.

Source: MyBudget

Originally published as Experts share money tips for a financial spring cleaning session