Time for a spot of financial spring cleaning

spring letters made from leaves - spring clean your finances

Savings

MoneyPlus Features Team

4th March 2016 at 1:14pm

Spring has now officially sprung, well according to the meteorological calendar anyway, which dates 01 March as the first day of spring. And as a result many of us could be reaching for the feather duster this weekend.

However, if you were to go by the astronomical one (where it all gets very technical), you might want to hold off. The astronomical calendar determines the seasons due to the 23.5 degree tilt of the Earth’s rotational axis in relation to its orbit around the sun (stay with me!) and marks 20 March as the first day.

Where did it all spring from?

There are few rites of spring more satisfying than the annual clean, March for many heralds a time to get your house in order.

So where does this passion to get the Pledge out derive from?

A possible origin of spring cleaning can be traced back to the ancient Jewish practice of thoroughly cleansing the home for the spring-time memorial feast of Passover; this is in remembrance of the Jews’ departure from Egypt following their captivity.

Another posed is that the origins of spring cleaning date back to the Iranian Norouz, the Persian New Year, which falls on the first day of spring. In Iran they continue to practise what they translate as “shaking the house” on the first day of spring which means everything from the drapes to the furniture is cleaned.

Another culture, the Chinese, are also in the running for the originator of spring cleaning. Like Iranians, the Chinese clean their homes in anticipation of the New Year (which occurs mid-February). The tradition involves sweeping the floors to rid the home of bad luck and purge any ill events that befell the home and family in the previous year.

A further view is that this mission to don the marigolds comes from times past when people kept their houses shut tight against the cold of winter, heated them with coal and oil and wood, and lighted them with candles. The coming of spring signalled a welcome opportunity to open the doors and windows and set about making a dingy habitation fresh again.

Dusting down your finances

Wherever it derives from, it’s still a great prompt to indulge in a deep clean. But why stop there? While you’re in the zone why not run a duster over your finances too. Spring is an excellent time to rid your financial house of dust and cobwebs.

A good money makeover could help save hundreds, perhaps thousands, of pounds just by confronting the odd nasty home truth, learning some new tricks, and making sure you’re switched on to the best possible deals.

Earlier in the year we looked at ways to freshen up your finances – whether that’s reviewing your spending habits, putting a budget in place or prioritising your savings pot. And if you’ve not already done so, then now is as good a time as any, especially if you’re in cleaning mode.

Here are some tips that could help you spruce up your spending too:

Work out your budget – you’re likely to know what income you’ve got coming in but how aware are you of what’s going out? If you don’t know what you’re spending then it’s difficult to balance the books. It’s worth using a budget planning tool, sites like moneysaving experts (MSE) and the Money Advice Service provide free planning  tools, they are simple to use and could help you see where you’re going wrong or what savings you could make.

Do a direct debit check-up – check you’re not paying any direct debits for things you don’t use or need anymore. It could be something as simple as some old mobile phone insurance for a phone you no longer have!

Create a debt repayment plan – if you have any outstanding debt, try coming come up with an aggressive debt payment plan.

The “snowball” method is a popular strategy that works for many people. It involves throwing any extra money you have (perhaps from the savings you make following these tips) and use it to whittle away the account with the smallest balance, regardless of interest rate. Once that one’s taken care of, you move down the list to the account with the next-smallest balance, until eventually everything has been paid off.

The idea behind this method is that small victories can mean big gains psychologically. Crossing debts off your list gives you the psychological victory of “winning,” which keeps you motivated.

Online billing – when it comes to running your finances, the internet is your biggest ally. Most of the cheapest deals are for internet customers because it costs less to provide an online service. If you opt for online billing you’ll usually get a discount.

Are you getting the best deal? – price comparison websites will let you compare hundreds of financial products and ensure that you have the best one for your circumstances. Whether it’s car insurance, credit cards or a broadband bundle, there is normally a huge difference between the cheapest and most expensive providers, so it’s worth browsing for the best offers on these websites.

Check, ditch and switch – many products like mortgages, energy fixes, credit cards and car insurance only give a good deal for the short term. So check now when things end, and put a big note in your diary/calendar a month before so you’ve time to ditch and switch.

Drop bad spending habits – something as simple as cutting back on a two lattes a day habit could save you in the region of £1500 a year. It’s amazing when totted up how much certain immediate and short-lived gratifications can cost, reduce those treats and think about your bigger spending goals. Keep track of the savings you are making to keep you motivated and transfer the money you save into your savings account – then you’ll really see how it adds up.

Use cash – almost everyone now has a debit or credit card and it’s all too easy to just stick something on your card and worry about it later.  If you used cash more often like the good old days, handing over real money might just make you think twice before buying something you don’t need.

Get into a regular saving habit – Whether it is little and often or large and occasional, adopt a realistic timeline of when and how much you would like to save. Setting up monthly standing orders into your savings account and earmarking key spending dates in your diary (such as birthdays or trips away) will help you achieve your saving goals in the long-term. Think about the savings products that will work best for your needs.

And finally, did you know?

In China, it is said that if someone can make an egg stand upright on the first day of spring, he/she will have good luck in the future. You might want to aim for the astronomical calendar date of the 20th with this one now, and good luck!

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The information in this blog or any response to comments should not be regarded as financial advice and is based on our understanding in March 2016.