The sun is finally out in Hong Kong and it is indeed time for that spring-clean…
When we think about spring cleaning we think about dusting, sweeping and polishing. However, there are other areas besides your house that could use a good annual clean out, like your finances.
Here are six things you should do this spring to make sure your money management strategy is as neat and orderly as your home.
1. Remove Unnecessary Expenses
Are you paying for more cable channels than you really need? Do you still have a gym membership when you haven’t gone in months? (Is your PURE membership card collecting dust?) Take a look at your annual and monthly expenses and slash anything that’s no longer benefiting you.
2. Come Up With a Debt Payment Plan
If you have any outstanding debt, it’s time to come up with an assertive debt payment plan. The “snowball” method is a popular strategy that works for many people. It involves using any extra money you have and paying your debt account with the smallest balance. Once that one is paid off, you move down the list to the next account with the smallest balance, until eventually everything has been paid off. Debt is a burden that seriously limits your ability to make the most of your money. Make this the year you finally eliminate it.
3. Review Your Current Investments and Savings Plans
Chances are you’ve had some changes in your life (Say “hello” to my brood of 5) since you first signed up for your current investments and savings plans. Review these regularly to ensure your money is working the hardest it can be for you. It is a great time to be thinking about what savings and investments you do have and if you could be putting more away to create wealth for a rainy day and secure you and your family’s future (aka schooling in Hong Kong!).
4. Check Your Credit Score
Your credit report holds the most important information of your financial life. The difference between applying for a loan with great credit versus applying for a loan with bad credit can yield a difference of tens of thousands of dollars over a 30-year mortgage. You’re entitled to request a free credit report each year from each of the three major credit reporting agencies: Experian, Equifax and TransUnion (or CallCredit for UK). Read your report carefully to make sure nothing looks incorrect. If you see anything you don’t recognise contact the reporting agency immediately.
5. Shop Around for Better Deals
We often shop around for the best deal when we sign up for a new service, but once it’s become a monthly payment in our budget, we tend to pay it and forget about it. (Yes, we’re talking about that subscription to Netflix!) Take this time to re-evaluate your regular expenses and see where you can save some money.
6. Revisit Your Budget
Our needs change over time, so your budget should be flexible enough to change with them. (And if anyone knows flexibility – it’s us, mamas!) Revisiting your budget at least once a year ensures that it still works for you and your family. Your budget will only be successful if it’s in line with your current life and priorities.