Do you struggle to keep tabs of multiple accounts, cards, bills and receipts? Is your financial record a jumble of digital files and faded papers, stashed in the corners of your desktop or desk?
These are clear signs that you need a financial spring cleaning. Tidying up your finances helps you get a bird’s eye view of your financial standing, and set yourself on a cleaner, clearer path to financial control. When you are in control of your finances, you can save more effectively, spend more wisely, and better manage your money. Here are three ways to do it.
Streamline accounts and payments
Having multiple credit cards with varying level of cash back and discounts can be useful, but only if you are on top of your payments. You could also be paying unnecessary fees by having multiple cards. Take a critical look at all the credit cards you have – do they help you save money, or spend more? If the latter is your answer, then maybe it’s time to trim one or two cards.
You can do the same for your savings accounts too. Most of us have multiple accounts that give you the best benefits like cash incentives if you maintain an average monthly balance or cash rebates when you fill up at a petrol station. Also, why not dedicate each account for a specific use (e.g. bill payments, emergency cash, travel fund)? Save time and energy in the future by automating recurring transfers and payments.
Review the status of your investments and use a tool like Google Calendar to set reminders for key milestones and actions that need to be taken, such as closing of accounts and withdrawal of funds.
File and secure records
An organised filing system helps you trace and locate information and documents when you need them. It makes tax season a lot easier. Keep receipts and other paperwork in a tax folder. You can use your phone and an app like CamScanner to make digital copies of all important financial and non-financial documents and back them up in a password-encrypted drive. Don’t forget to shred your physical documents before disposing of them.
While you’re at it, don’t neglect your digital footprint. Information such as your address, mother’s name, or pet’s name that might be floating around on social media could put you at risk of identity theft. Clean up your digital trail and review the information you choose to share with apps.
Review spending habits
Take stock of your expenses to identify patterns and areas that you can improve to keep your overall financial standing lean. Take this opportunity to filter through your list of subscriptions and unsubscribe from the ones you enjoy least (as well as those that you signed up for a free trial and forgot to cancel!).
Don’t forget to review your investment strategy and asset allocation. Fine tune your strategy based on your portfolio’s past performance and your future goals. If you need guidance, you can speak with a financial advisor.
There’s no wrong time to spring clean your finances. Make it a point to do the steps above every quarter and your financial standing will be a lot healthier.
This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy among Malaysians. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve all our well-being. This, in turn, achieves CIMB’s purpose of advancing customers and society.