It's time to spring clean your finances

It’s almost that time of year when we emerge from our winter slumber and start heading out again. So it’s time to get ready for spring’s warm approach with a special spring clean – one for your finances.

Clear your debts

Credit cards are a killer of good financial health.

Before you can treat your financial woes, you need to find the cause of your debt sickness symptoms. If you’re a shocker for making full credit card repayments, switch to a low-interest card.

If you’re a sucker for credit card deals but are spending a small fortune on card fees, ditch your existing card for one with a lower interest rate.

Be sure to investigate whether you’ve got outstanding repayments to make and set up automatic payments if you haven’t done so already to wipe such debt. In fact, this acts as a timely reminder to check all your regular repayments and existing automatic payments or direct debits. Make sure you’re paying off as much as you can when it comes to your debts or undergo debt consolidation if it’s too much to keep track of.

Review your budget

Does it seem like your money evaporates into thin air on payday?

Well, it’s going somewhere. When completing a financial spring clean, compiling a fresh budget won’t go amiss.

Print off the last two or three months of bank and credit card statements. Highlight all items that aren’t necessary, from takeaway coffees to expensive nights at the movies. Add up your total, and see if you’re surprised at the final figure.

It’s a smart move to set yourself a weekly entertainment budget and stick to it. You’ll also need to account for mortgage repayments, bills, petrol and other everyday essentials. Anything that’s left can be split 70/30 to a high-interest savings account and dedicated holiday savings account.

Secure your super

31 percent of Australians would rather find $200 cash than ten times as much lost super! According to the 2014 Westpac Lost Super Report, a large number of Aussies would prefer to enjoy a small amount of money in the present than safeguard their retirement nest-egg.

“Our research shows that there is a lack of engagement in lost super which is a great concern,” said Gai McGrath, Westpac General Manger of Retail Banking.

If you’ve got super floating around that would be better earning interest or have multiple super accounts, consider a pre-retirement spring clean. Find any missing super and consolidate what you’ve already got. You might even go down the self-managed super fund (SMSF) path.

Consider your tax

Individuals’ tax obligations will vary depend on their circumstances. 

In some cases, a simple tax return will suffice. In others, you may have to claim for depreciation on assets in a rental property or declare additional income. When spring cleaning your finances, don’t just consider your current state — be sure to contemplate what your obligations will be for the current tax year and your next financial return.

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