5 WAYS TO SPRING CLEAN YOUR FINANCES

September signals springtime and fresh new growth. What better time to refresh your finances and clear out bad habits that waste money? Take our tips to streamline your spending.

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Are your expenses greater than your income? Just as you clear out old, broken things you no longer use to spring-clean your home, you can get rid of bad money habits that keep you in debt. If you’re already burdened, clear your debts by paying off those with the highest interest rates first – generally micro-lenders, then credit cards and overdrafts. Get professional help from a financial adviser if necessary (see Directory).

1. PUMP UP SAVINGS
Aim to put aside 20% of your disposable income. That’s the money you have left after all your monthly payments have been made. Put this in a savings account where it can grow. Banks reward you for saving by adding a certain percentage to the money you have saved (this varies according to the kind of account – speak to a financial planner for advice on what’s best for you). If you can’t afford 20 percent, even 5 percent is better than nothing, and you’ll be grateful for it one day. You might need it for a new stove or TV, to study or travel, or for a wedding or family emergency. Remember that most savings accounts need a minimum balance (usually around 2 000), or you’ll be charged a monthly account fee.



2. DUST DOWN INSURANCE
You need insurance in case of unexpected accidents or losses. If your home is burgled or your car is wrecked, insurance can help you replace what’s lost. What many people don’t know is that it’s clever to get fresh quotes for your car and home insurance each year. Shop around online and if you find a cheaper quote, check if it means paying higher excesses. Your excess is the amount you have to pay when you make a big insurance claim. If damage to your car will cost 30 000 to fix, for instance, you might have to pay 3 000 yourself. Excess varies depending on your insurance premiums. If you pay higher premiums each month you might not have to pay any excess. If you find an insurance deal that’s better than what you have, give your current insurer an opportunity to match the quote, and to check that your details are up to date. If the value of your car has dropped, for instance, or you’ve put in new home security, your monthly premiums could drop.

3. UNPACK BANK CHARGES
Banks raise their charges during the year, so check out what your bank account is now costing you. Request a meeting with a consultant to go over your accounts and services. They can tell you about new services or better-priced products that could benefit you. They can also help you neaten up your accounts if you have more than one, perhaps consolidating them to save you bank charges.

4. CHECK YOUR CREDIT RECORD
You’re entitled to a free credit check through each of the credit bureaus every year, so make use of this service. You might think your credit record is spotless because you always pay your accounts on time, but there are fraudsters out there who use all kinds of tricks, and one of them is to take out credit using false names and details (such as yours) and racking up debt. So make use of the credit bureaus’ services.

5. USE REWARDS PROGRAMMES
If you have loyalty cards from the stores where you shop (such as your Jet Club card), take a few minutes to check out the exact benefits they offer. You might find that you could have been saving a lot if you’d used all the benefits available to you – for instance, did you know that being a Jet Club member means you get discounted rates at Clicks and Dis-Chem pharmacies? So get familiar with all the benefits available to you, and use them!

DIRECTORY

Financial Planning Institute (to find a certified financial planner)
086 1000 374
letsplan.co.za

National Credit Regulator (for a list of registered debt counsellors)
0860 627 627
ncr.org.za

Credit check bureaus Experian
0861 105 665
experian.co.za

Transunion
0861 482 482
Transunion.co.za

XDS
086 093 7000
xds.co.za

By Glynis Horning