Spring is the season for fresh starts, and your finances deserve one too. Just like decluttering your home, tidying up your finances helps you stay organised. Whether it’s clearing out debt, refreshing the budget, fine-tuning your savings, or reassessing insurance cover, a financial spring clean is a simple way to take control of your financial wellbeing. Gary from Mortgage Express has given us some insight  for our Spring newsletter. 

Clear out your debt

Whether you choose to knock off smaller debts first to keep up the momentum, or clear debt with the highest interest rate to get rid of the most expensive debt, tackle your debt head-on with a repayment strategy that works for you. Consolidate multiple debts with different interest rates and payment dates into one manageable lower-interest loan. Avoid adding new debt unless it’s absolutely necessary.

2.      Refresh your budget

Just as you would go through your cupboards to decide what to toss out or keep, reviewing your income and expenses in your budget can help you cut spending and find ways to save. Use a budgeting app or online tools to easily track income and expenses. Look for areas where you could reduce spending and set new savings goals to help you stay motivated. 

3.      Dust off your credit score

Think of your credit score as your financial reputation; the better it is, the better your chances of success with future credit applications. If it’s been a while since you last checked, request a credit report to see how you’re tracking. Fix any errors that could negatively impact your credit score, avoid missing repayments and pay back your debt on time.

4.      Fine-tune your savings

Having a financial safety net in case of unforeseen circumstances is essential. Sudden illness or job loss can leave you without an income so it’s important you save an emergency fund. Open a separate high-interest savings account and automate weekly or monthly transfers into this account to start building your savings. Transfer any windfalls – like tax refunds or bonuses – into this account and watch your savings grow!

5.      Review your mortgage

Interest rates are coming down so it’s a good time to check-in on your mortgage. How does your interest rate compare against what’s being offered by other lenders? Refinancing might be an option to take advantage of better rates. Talk to your mortgage broker about structuring your mortgage across fixed and floating interest rates. Consider keeping your loan repayments at the higher levels even when interest rates drop to repay your mortgage faster.

6.      Reassess your insurance cover

A lot can change in a year so it’s important to regularly review your insurance to check it’s still a good fit for your lifestyle:

Home insurance: If you have a mortgage, your lender will likely want you to have home insurance. Check that your policy covers what’s required by the lender.

Value of your assets: Calculate how much it would cost to rebuild your home and check the sum insured is enough to cover this. Use an online calculator to work out the total value of your belongings. 

Car insurance: Check your car insurance cover matches its current value.

There are different levels of cover, so decide on the one that’s right for you. Excess amount: If you choose to pay a higher excess to lower your insurance premium, make sure it’s an amount you can afford.

Payment options: Most insurance providers offer a discount for annual payments instead of monthly. Also consider how much you could save by bundling all your insurance with the same provider.

Small changes lead to big results

A financial spring clean doesn’t have to be complicated. Even a few small changes can lead to big results. Start with one area, like a budget refresh or a review of your mortgage and then go from there. 

If you’d like help tidying up your finances, whether it’s refinancing your home loan or reassessing your insurance cover, reach out to  us and well put you in touch wit the right broker.