Social distancing amid the coronavirus pandemic is a necessary step to protect yourself. But it’s also a great time to declutter your finances, here’s how:
On March 23, South African President Cyril Ramaphosa announced a national shutdown for the next 21 days, starting from March 26 midnight, in the fight against the spread of Covid-19. This will give you time to, among other things, reflect on your financial behaviour. Why not use this time to declutter your finances? Here are ten ways to do that:
- Clean up
Piles of statements stuffed into drawers, cubby-hole your car or living room will only raise your blood pressure. Allocate time to sort through grungy folders and records. Shred what you don’t need to avoid identify theft.
- Get sorted
Locate and safely store important documents, such as birth and marriage certificates, passports, and car registration certificates. Taxpayers must also keep records and supporting documents for five years from the date on which SARS received the tax assessment for that year.
- Go paperless
Electronic statements reduce the amount of paper you have to process or shred, and are better for the environment. Set up folders on your device so that you can easily locate mail.
- Stick to a system
Some people have the time to do a daily check on bills and balances, many find it more realistic to process a batch of paperwork in one go, say once a week. The important thing is to stick to a system that works for you. Log into your bank account to check balances, pay your bills, and generally keep track to help avoid potential problems. Consider automating some payments.
- Check where your money goes
Download a money app or write down what you spend in a notebook. This way, you can’t evade the evidence. Does a large amount go on eating out and bookings on ride-sharing apps? Dig deep and get to the root of your spending habits.
- Come clean
Sitting down with your significant other or holding a family meeting to talk about finances can lead to agreement on priorities and cost-cutting. Debt consolidation may be a lifesaver, with one affordable monthly repayment, giving more breathing room and protecting assets from repossession.
- Decide what you really need
Check what policies and investments you hold and whether these still suit your circumstances. You could be paying too much for car insurance, and too little on life insurance, for example
- Trim the excess
Do you really need four credit cards, a gym membership you never use, and investments with a range of service providers? Reducing these numbers can give you a clearer idea of where your money goes and will cut the amount of mail you receive.
- Budget better
Determining what is really important to you will encourage you not to fritter away money.
- Spark joy
Keep up the momentum. Decluttering and organising must be ongoing, but the payoffs are well worth it. Break up a big job into a series of small tasks, and you will remain ahead of the game. Revel in knowing you have freed up your finances to do things that bring you more contentment and happiness.
Words: Sarah Nicholson, commercial manager of personal finance website Justmoney.