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With the arrival of the warmer weather, many people’s thoughts turn to spring-cleaning. Instead of just clearing out the cupboards and washing the windows, why not spring clean your finances and save money at the same time? That way you’re not only dusting away the cobwebs, but also improving your bottom line.
Here are six tips to help you spring clean and save:
Instead of just cleaning your house, make a checklist of all those pesky maintenance jobs that need to be done. Staying on top of repairs and general upkeep will help save you money in the long run. For instance, when was the last time you painted the house? If you leave big jobs like that for too long, they can end up costing you more down the track and, as the tasks pile up, the total repair bill could grow into an overwhelming figure.
While many of us will give our car a good wash and polish, it’s just as important to make sure all is well under the hood. Have your vehicle serviced regularly to avoid costly mechanical problems in the future. Also, set money aside for expected car expenses, such as new tyres, so you don’t have to pay for them on credit.
Many of us are guilty of wasting money on clothes because we haven’t organised our wardrobes properly. Instead of just cleaning out your cupboard this spring, take a full inventory of what you have and what you need in order to avoid unnecessary purchases. Divide your clothes into three piles – one for the bin, one for charity and one to keep. Then compile a list of essential items for spring and summer, so it’s easier to differentiate between needs and wants.
Do an audit on all the services you’re currently paying for each month, and weigh up whether you are using them to their full advantage. While a weekly veggie box delivery may have sounded like a great idea when you signed up for it, it’s not good value if you’re throwing half of it in the bin every week. Take a good look at your phone plan and investigate whether a cheaper plan would still meet your needs. If you have a cable or satellite TV package, ask yourself if you’re getting your money’s worth.
While interest rates are low, consider increasing your monthly mortgage repayments so you can own your home sooner and reduce the interest you pay over the life of the loan. The monthly repayments on a $300,000 mortgage over a 25-year term at 5.0 per cent are around $1,753^. By increasing your monthly repayments by $400 you could save $76,316 in interest and pay the loan off seven years and seven months earlier^^. You can also attack your loan faster by paying fortnightly instead of monthly and making lump sum repayments whenever you can.
On average, Australians have three super accounts each, wasting as much as $1.1billion a year in fees.
Websites such as the Tax Office’s www.superseeker.gov.au can help you track your missing super. Once you have found it, consider consolidating it into a single account to minimize fees. However, be sure to check the insurance options attached to each account and weigh up their usefulness before rolling your super into one account.
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.
^ Figures are based on a $300,000 mortgage with a 25 year term and interest rate of 5.0 per cent using AMP’s online mortgage calculator.
^^ Figures are based on an extra monthly payment of $400 from the beginning of the loan using AMP’s online mortgage calculator.
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