September is the perfect time to spring-clean your finances as well as prepare for the upcoming holiday season, according to Alice Selokoma, regional general manager at Momentum Eastern Cape.
Here are 5 ways that people can de-clutter their finances:
Budget
According to Selokoma, a person’s budget is the backbone of their financial health, therefore budget grooming needs to be at the top of their financial spring-cleaning list.
Selokoma said: “When revisiting your budget, take note of where you are overspending. Do this every month while making sure you spend within your limits. Remember that budgeting goes hand-in-hand with achieving your financial goals.”
Financial goals
Spring is the right time to revisit the financial goals that you set at the start of the year.
“Evaluate the progress and, where required, make changes to ensure you can reach those goals. If you have not set up any financial goals yet, now is a good time to consult a financial adviser to help you set these up.”
Your financial goals could be saving for retirement or setting up a savings account that you can use in an emergency.
Will
National Wills Week, which ran from September 12-16, should be a reminder for people to get their affairs in order.
According to Hilary Dudley, Managing Director of Citadel Fiduciary, a will is the foundation for the transfer of wealth to the next generation and continue your legacy even after you are gone.
Revisit your will to make that it is a valid will document with an executor and that your will document is up to date.
Debt
Selokoma said that the main focus of spring-cleaning your finances should always be prioritising the paying off debts to reach the ultimate goal of becoming debt-free.
“Always choose debt wisely, take careful note of interest rates charged, and make sure you maintain a healthy debt-to-income ratio,” Selokoma said.
Credit score
While you are spring-cleaning your finances you should also think about improving your credit score.
Banks and other financial institutions provide free credit-scoring tools so you can check out your credit score. They also offer tips on how to improve your score.
Selokoma said: “Remember that a healthy credit profile means that you will be able to borrow money when you need it most for essential life moments like buying a house.”
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