March is here, which means that evenings are getting lighter, the weather is getting warmer and thousands of Brits are about to embark on their annual spring clean. Furthermore, this time of the year provides a great opportunity to take a look at your personal finances and spruce up your savings.
Perhaps you set some New Year’s resolutions that you haven’t kept. Or maybe you’ve let your finances slip a little as the year now that the year is well underway. If so, here’s how to spring clean your personal finances in 2022.
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Evaluate where you’re at
Before taking any steps to sort out your finances, it’s always a good idea to familiarise yourself with your current situation. Make a note of your monthly income, including any passive income or government grants and also make a list of your monthly outgoings. This will help you to establish how financially comfortable you are.
Next, take a look at any savings accounts, investments or funds you have. Accounts that you opened years ago may no longer offer the best returns on your money. You may even notice that some investments have lost you money over the years! Therefore, it is important to establish exactly what you have so that you can look for better alternatives.
Lastly, revisit your financial goals for the year. Understanding these will help to guide your future financial decisions. For example, if you want to save money, you could use our savings calculator to set a monthly savings goal that will help you to reach your desired outcome.
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Cut ties to unneeded expenses
To fully spring clean your finances for 2022, you should try to cut ties with any unneeded expenses that you may have. This could include subscription services that you don’t need, unnecessary takeaways or even that gym membership that you took out with the best of intentions but don’t use.
The cost of unneeded expenses can seriously add up! A good idea is to go through your most recent bank statement and stop any direct debit payments to expenses that you don’t need.
Also, try to avoid spending money on purchases that aren’t necessary. For example, if takeaways are becoming more than just a rare treat, they can be swapped for much cheaper homemade meals. Furthermore, your daily Starbucks could be swapped for homemade coffee in a travel mug.
Pay off your credit card debt
The best way to get on top of your finances in time for the summer is to minimise any debt that you may have. Credit card debt can quickly build up and leave you in financial trouble. Therefore, it’s a good idea to pay off as much as you can as quickly as you can.
If your credit card is causing you financial stress, you may want to shop around for a card that offers more competitive features. Cards that offer low interest rates reduce your chances of building up debt. Our list of top-rated credit cards for 2022 has a number of excellent options that you may want to consider.
Invest into your future
If you haven’t already, now is a great time to start investing your money for your future. A big part of your financial spring clean should be making sure that you have funds saved up to support the future you want.
There are a number of ways that you could do this, including:
Investing into a high-interest savings account
Opening a Stocks and Shares ISA
Saving into a lifetime ISA
Topping-up your pension pot
It’s never too early to start saving for your future. In fact, the earlier you start saving, the more financially secure you will be.
The post How to spring clean your personal finances in 2022 appeared first on The Motley Fool UK.
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