Spring-clean Your Finances in 8 Easy Steps

26 Jan 2017 

I'd be the first to confess that I don't like spring-cleaning, but I simply love how it makes me feel after that. Chinese New Year means it's time to start putting our physical house in order. But don't forget our financial house too.


Here, I've listed down 8 (read "huat") easy steps to organise your finances and prepare you for a better year ahead. Some of the steps are so simple that you can do them in 5 five minutes on your mobile phone, while still munching on pineapple tarts. It's also an excellent way to "act busy" if you need a way to ward off nosy CNY questions... 


So, let's get started:


1)  Track those expenses

Download an expense tracking app and use it! Simply set up your budget, major expense categories and you're good to go. 


2) Declutter your wallet

Get rid of cards, receipts or heavy coins from your wallet.  Keep to one, or at most two, credit cards.  Be ruthless when emptying reward cards.


3) Cancel rarely-used credit cards

Are you still holding onto credit cards that you may have applied to gain some freebie or cashback but you rarely used afterwards? Cancel them.  This can usually be done with a phone call to the bank. 


4) Consolidate bank accounts

And what about bank accounts you may have opened and are attracting fall-below fees or admin fees even though they are no longer useful to you.  Close them now. 


Meanwhile, do a quick search of banks offering bank accounts that give you higher interest rates when you consolidate your banking transactions with them. Read the transaction requirements that need to be fulfilled. It's worthwhile opening such an account with the bank you are most comfortable with, earning a higher savings deposit rate in return.


5) Subscriptions – do you really need them?

Have you been using that gym membership?  Or perhaps you've been too busy to watch the multiple cable channels. Decide if you should cancel or downgrade when the contract is up. Put a note in your phone calendar to do so at the earliest date possible. 


6) Make a big payment to high-interest or big-sum debt asap

Before your year-end bonus gets spent, make a big payment towards debts such as your outstanding credit card bill or home loan. Check if it attracts any penalities.


7) Organise financial papers the "lazy" way

After years of trial and error, I have settled with a very simple and lazy way to organise my bills, receipts and other financial papers.  I get three magazine box holders. One box is for holding receipts, one for bills and one for my banking/stock statements. I don't bother to sub-categorise further. The only thing I do is to make sure I file the newest document on the left hand side of each box. This means all documents are essentially arranged in chronological order within each box.


Before they go into the box, receipts are recorded in my expense app, bills are paid (with a handwritten note on date of payment) and bank/ stock statements scrutinized for accuracy.  When the boxes start bursting at the seams, I would then remove the oldest stack from the right hand side, and either keep them in a separate place before finally discarding them, or simply discard them straightaway. 


This system works because 90% of the time, we don't really need to look at these statements again. When we do, we can roughly gauge the time we received it and simply search by going through the pile from left to right. 


8) Consolidate excess cash and invest

Make your money work harder for you. Consolidate any extra dough lying around and shop around for better places to park them.  Look beyond the typical fixed deposits, eg money market funds, bonds and shares. 


With some simple habits and tweaks to our thinking, all of us can be a little more financially-organized. So, here's to a roaring financial year ahead. "Huat" ah!


This article first appeared on The Home CFO.

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