Spring cleaning your finances will fill some of you with dread and others with joy!

We are going to look at this from the twin perspectives of personal and professional.

Personally I would much prefer to be sorting out the ancient tins and bottles in the larder than rifling through old bank statements, but we all have to get on with stuff we’d rather not sometimes.

And… the good feeling you get when you have cleared out your wardrobe (can you believe you have kept that for so long, it hasn’t fitted you for 5 years!) you can also achieve from sorting out your finances..!

Some questions to mull over to get you started:

·     Are you spending your money on the things that you want to be investing in?

·     When did you last check that you were getting the best deal from your suppliers?

·     Are you paying the right amount for your bank account, your insurance, your property?

·     Do you have a budget for the year ahead?

·     Have you worked out how you are going to hit your financial targets?

·     Are you being paid enough?

·     Have you built in contingencies?

·     Are you secure financially if you find yourself in changed circumstances?

·     How could you make more and spend less on the things that don’t bring you happiness, and more on the things that you do?!

Those of you whose ‘inside voice’ is currently screaming ‘I don’t have time!!!’ think of it like this..

If I offered you £1200 for a day or two’s work – would you take it?

Who knows what you could save from spending a little time looking at where your money is going, and whether you are making what you should be… well the answer to that is, you will know. So…..

I have trawled the internet and used my own experience to save you time and share some advice on how to get this done as efficiently as possible so that you can get back outside into the sunshine.

Top Tips

1.    Create an ICE Folder

If you’re the money manager of your household, you owe it to the people you love to put together a folder of information that will help them figure out how to handle your finances in case anything happens to you. This is your “In Case of Emergency,” or ICE, folder.

Include all of the info someone would need to manage your finances, such as your account numbers, login IDs and passwords, a list of bills you pay each month, investment and retirement fund info and anything else that would need to be handled in your absence.

This can be a literal folder or a folder on the desktop of your computer. If you go for the more high-tech option, make sure to rename the folder something innocuous (perhaps not “All Financial Documents Here,” for security reasons) and fill your partner in on the folder’s alias.

If your partner or someone else handles your finances, ask that person to create an ICE folder for you. Not something we really want to talk about but it will save a lot of distress if the worst happens.

If you are a business owner – what happens to your business if something happens to you? Have you made a plan? Is it formal and legal?

While you’re at it, have you got an up to date will? If not – now is the time.

2.    Go retro-spective.

The best way to take a closer look at your budget is to go old-school.

Get your credit card & bank statements from the past six months and three different color highlighters.

Use one color to highlight your necessary costs (utility bills, insurance, supplies, equipment, groceries, toiletries), another to highlight items you bought because you really wanted them (your Netflix subscription or the new cabin bag with built in phone charger and coffee holder that is making those business trips so much easier!), and another to highlight less thoughtful purchases (those two glasses of wine that cost more than a bottle, the new jacket that you still haven’t worn and aren’t sure you like anymore).

Ask yourself whether you are using all those memberships and subscriptions you are paying for, are you reading those magazines or could you just as easily access those articles you do read, online? Are you using the gym..? Would it be more cost effective to buy a bike..!?

Then think about all the cash withdrawals you have made. What have you been spending that on? How much is your take away tea/coffee costing you? What about your lunches?

This exercise is usually eye-popping. Most people don’t realise how much they’re spending on stuff they really don’t need or want.

Awareness is everything when it comes to behavioural change – so this in itself will have you thinking more carefully about whether you ‘want or ‘need’!

3.    Go Paperless

Going back to that feeling of freedom we get when we get rid of clothes you haven’t worn in two years or clutter we have had in the top drawer in the kitchen since we moved in.. getting rid of that filing cabinet filled with old bills and credit card statements can feel just as freeing.

Go paperless. Scanning your important documents allows you to find them quickly, protects them from loss and makes your home less cluttered.

Of course, you shouldn’t just start tossing. Our general rule is to hang onto tax records for seven years, and it might be easiest to keep the hard copies of those. But everything else—including bank and credit card statements, as well as pay stubs—can be scanned and stored in a cloud-based filing provider, such as Dropbox or Google Drive.

4.    Create Your Own Financial Calendar

Let’s face it: It’s too easy to ignore financial tasks right up until the last minute. (Hello, tax prep!) That’s why now is a great time to create your “financial calendar.”

It’s simple: Set reminders throughout the year to do things like review insurance policies, get a credit report or rebalance investments.

I just use my outlook calendar which outlines the tasks I should complete each month, along with resources to help me finish them, for e.g. every month I have a reminder to do my accounts, which I then file so that when it comes time to do my tax return it is all there waiting for me (oh joy!)

5.    Where can you make savings?

  • Are you still getting the best deal from your phone company? When is your contract up? Could you negotiate something better? Are you sticking with that provider for the right reasons?
  • When did you last check whether your insurance was the most competitive?
  • Who is providing you with your landline and internet. Are they still the most competitive? Are they offering new customers much better packages? Are you happy to continue paying at the higher rate?
  • Where can you use technology to speed up processes and save on communications costs?
  • Reconsider your office space; think about downsizing or sharing amenities with another company if you are currently paying more than you should be.
  • Double check your own and your staff expenses to see whether any outgoings can be reduced.
  • Work out which customers are most valuable and target resources at their demographic.

6.    Supplier Arrangements

Building on those points about things like mobile phone contracts and internet suppliers, some of the greatest efficiency savings you could make come from supplier arrangements.

Adopt a constructive tone and be prepared to compromise, but go in knowing what you want and make sure you have some leverage (e.g. a new potential supplier)

Most importantly, get your facts straight before you start negotiating, you need to know:

·     The market rate for the service

·     The value of any additional incentives

·     Any warranty or renewal period details

·     Your contractual obligations

·     Their liability in case of non-delivery of agreed service

·     The factors that make you a valuable customer

7.    Your income, fees and costs.

Nothing stays the same forever and applies to your prices/salary too.

When was the last time you reviewed what is coming in? Negotiated a pay-rise or a price-rise?

Over time inflation will drive up the price of your products and services, couple this with your ever-growing entrepreneurial expertise or your experience in your role and you quickly have an argument for increasing your monetary value.

Not only should this help you gain more value from existing customers or in your current role, but also set a benchmark for new customers or new positions you might take.

Enter into negotiations in a friendly and constructive way. Set out the value you have already provided and help them to see how you and/or your service fits with the future of their business. Be prepared to negotiate and remember to listen to their concerns if they have them. This is about win-win in the long term, not win-lose in the short.

In real life…

Do I want a brand new car, or a 10 year old car and a couple of amazing, life changing and memorable adventures? No brainer for me, I would always choose experiences over physical ‘stuff’ but I still find myself thinking of things I ‘need’ and then having a conversation with myself about whether I really do.

And just because it is only a tenner is no reason to ‘just do it’ – when you look at your accounts and see how many ‘just a tenners’ you have spent you realise how much that collection of dust catchers has cost you and where you might have better spent it.

This applies to the way you spend in your personal and professional lives, so simply ask yourself if this purchase is ‘Want’ or ‘Need’…?

Go for it, good luck – and I hope it proves lucrative!