Are You Stressed With Chaotic Money Issues? Decluttering Your Finances Could Help

 Saying goodbye to Winter usually means the start of some Spring cleaning around the home. What better time to tidy up your finances too, and get your money matters in order. 

Decluttering your finances might well bring some order to your fiscal arrangements and help reduce stress, but how do you do it? This 4-step guide aims to show you the way. Keep reading to find out how to declutter your finances.

1. Compartmentalise your bank accounts

Try viewing your money as you would view different types of documents, and keep it compartmentalised. For example, on your office or personal computer, you might have separate folders for work documents, personal files, photos, etc. Doing the same for your money will help keep your finances more organised. For instance, you could set up separate accounts for bills, savings, living expenses, commuting costs, etc. Compartmentalising your money in this way will avoid you overspending on some things and being left short on others. 

If you think about it, organising your finances in this way makes perfect sense. Why would you want to have the money you’re saving for a holiday in the same account as that you use for weekly treats. The temptation to dip into those savings is going to be challenging to avoid, right! However, it is straightforward to set up different accounts by using a mobile banking application. With a couple of taps of a keypad, you can have your finances compartmentalised and start reducing your monetary stress. 

2. Review Your Spending

Another good use of your mobile banking app is to review your spending regularly. You may have direct debits and other automatic payments set up for things that you no longer need or don’t get total value from them. Also, the things you still use may have gone up in price considerably. Regularly reviewing your spending will allow you to trim your spending by getting rid of stuff you no longer need and then search for better deals on those you want to keep.

For those direct debit and regular purchases that you want to maintain, set them up so that they leave your account immediately after your salary arrives. This way, you will have a clear picture of your finances for the remainder of the month and avoid stressing about having enough money to pay essential bills. 

3. Eliminate Your Debts

There are few things more satisfying than getting rid of your debt, which should be a high priority. You may think that eliminating your debt is challenging, but making some small sacrifices and minor lifestyle changes can significantly impact your debt levels. 

You may recoil at the thought of making sacrifices, as it may suggest altering your routine. However, rather than focusing on short-term sacrifices, consider the incredible feeling you’ll have when you clear your debt. Also, think of the additional freedom you’ll enjoy when you have no debts.

It might feel overwhelming deciding where to begin to clear your debts. A good starting point is to list all of your debts in order of how much interest you’re paying. Tackling the highest interest debts first will leave you with more disposable income to tackle the remainder quicker. 

4. Look After Your Future Self

Hopefully, you will start to plan for your retirement when it is decades away. However, it is a challenge to envisage the person you’ll be then, what your lifestyle will be like, and how much money you’ll need. This situation applies even if your retirement is coming around more quickly. One thing is for sure; you will thank yourself for acting now to look after your future self. You can do this by starting to save for your retirement immediately and make it a regular habit. The sooner you start, the more you’ll have when you need it. 

Where To Start Saving For Your Retirement

The good news is, you’ve probably started already, and you may not be aware of it. If you are employed, aged twenty-two or over, and earning at least £10,000 per year, you will automatically be enrolled into a workplace pension scheme. The equivalent of 8% of your gross salary gets paid into your pension through personal contributions, employer contributions, and tax relief from the government. If you don’t think you’ve any pension savings, this is excellent news and a springboard on which to save more. When thinking about your pension, speak to a regulated financial adviser such as Portafina or, view the information at The Money Advice Service.

The State Pension

When you hit your mid-sixties, you should be entitled to receive the State Pension. At £179.60 for the full entitlement, the State Pension may not be sufficient to sustain the lifestyle you want in your retirement. However, it is an excellent supplement to your personal or workplace pension schemes or other retirement income. If you haven’t yet made any other provision for your retirement, other than the State Pension, now would be an excellent time to start. 

Conclusion

Dealing with finances can be stressful, whether you have too much money or not enough. Decluttering your finances is an excellent way to regain control and take some of the financial stress away from your life.