Your Springtime Financial Health Check

Traditionally spring is a time of clearing your house and getting things in order, but there’s no reason this same attitude can’t be applied to other areas of your life, such as your finances. Spring is an excellent time to look at your finances anyway because it falls three months after Christmas expenses and New Year’s resolutions. 

Choose a day in your week or at the weekend to organise your finances and dedicate the time to it. In preparation consider some of the costly lifestyle choices you make like buying coffee and subscription services. In some cases they bring enough joy to your life to justify the expense, but it’s also possible to make savings. 

SELF RESTRAINT 

Springtime is an excellent time to consider your spending behaviour and whether it serves you. Is your financial personality allowing you to save the money you expect? Are you making the financial progress you want and hitting the goals you set for yourself at the beginning of the year? 

If the answer is no then you might want to look at your spending habits and whether you need to optimize them for better results. In most cases self restraint is a powerful ally. If you’re an emotional spender you need to practice reigning yourself in at those key moments. Even if you’re a planner, emotional restraint can be useful. 

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A TEMPTING ENVIRONMENT 

Do you find that you overspend when you’re in certain places and situations, or with certain people? Consider that the spending is a result of the environment rather than a rational and progressive decision that will benefit your life. Too often purchases are made impulsively that don’t add value to your life. 

The environments we live in and socialise in can affect our mental and emotional states leading us to spend money. Convenience can lead to spending when it’s not necessary, so can distraction. Marketing people know that a distracted customer is one more likely to part with their cash, intoxicated people are even more willing. 

EMOTIONS AND MONEY 

Our spending and saving habits are inextricably linked to our emotions and personality. Some people spend money impulsively as soon as they see something they want, others intentionally fill an emotional void in their lives by buying a product or service. But if you bring awareness to your emotions you may spend less. 

Before you buy something ask yourself if this item is something you want or need. If it’s something you want then there’s an opening to try an alternative approach. You could choose not to buy the item and invest it elsewhere instead. Always consider how you feel when it comes to spending and why you feel the need to spend. 

THE CHECKING ACCOUNT 

The vast majority of people have checking accounts that they use for everyday transactions. Checking accounts are very functional and liquid but they are also very inefficient for your money. If you hold money in a checking account it won’t work for you; the interest you receive will be minimal and negligible. 

If you want to improve your financial health in the coming year you need to assess how you store your money and what kind of investments you’re making. At a fundamental level you need to ensure you’re getting the best interest rates for your working capital. Consider access savings accounts and tax free savings accounts. 

CASHLESS SAVINGS 

The world is becoming increasingly cashless which has pros and cons, but for individuals it can represent an opportunity to earn extra on your savings and investments. Recently, India put an end to 500 and 1000 note currencies effectively slashing the countries cash holdings by 80%. More countries are likely to follow as we move into the next decade. 

So what does this mean for you and your money? Well paper money and coins cost money to mint, store and transport. If there is no material to think about there are savings to be made. But financial institutions are still competitive and will pass these savings on to customers. Look for better interest rates and investment opportunities online, in cashless accounts.  

LONG TERM INVESTMENT 

When you consider your springtime financial health you need to think about the short term and the long term. Your short term finances are obviously more relevant, but without adequate planning for the future you will find it difficult to make any progress. One effective way of planning long term is by making investments. 

Emotional spenders don’t tend to be effective long term savers. When we follow our emotions and act on impulse we tend to use money we didn’t expect to spend. This lack of control translates into fewer savings and fewer investment opportunities. Be smart with your investment choices, your energy bills, your car loans, and other household finances. Make sure you always get the best deals and make your money count. 

CHANGING HABITS 

One of the most effective ways to improve your financial health this spring is to change the way you spend and save, often that means changing your lifestyle habits. Do you often buy products and services online? These days this is where most people spend money and it’s becoming easier than ever. 

Online marketing is very savvy. It uses targeted advertising to present the most relevant products to you at the right time. Moreover the sales funnel processes are super slick making it very easy to spend and retain your membership. Cut back on online spending and set some rules for the future.  

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THE COST OF SPENDING 

Spending your money also has associated costs you might not think of or consider. You work so that you can earn money to pay the rent and buy food, but you have to work for other reasons too, and sometimes you want to enjoy the money you earn. After all, what is the point in earning it if you don’t spend it? 

The trouble is that the money you spend is proportional to the time you give up for it, so if you spend it on frivolities it’s the same as watering your time in a job. Moreover, if the money is not in your account it will accrue interest in someone else’s. Don’t let this happen for the sake of an impulse purchase. 

BETTER BUDGETING 

We all have a budget of some kind. Even those without one will have an idea of the money in their accounts and how much they have to spend. A loose budget, however, does not help you to meet your annual goals, you need something that is more effective and organised. 

These days there are some excellent online tools to help you budget better and more efficiently. These tend to be apps that allow you to link to your bank account. A convenient app is the best way to budget these days as it gives you live information on spending and transactions. 

THE NEED FOR LESS 

Everyone has a bottom line when it comes to their financial situation. This bottom line is the bare minimum you need to survive. It takes into account your rent or mortgage, you bills, your food costs, and anything else you deem vital to your life. After this there is spending, this spending is always optional. 

You can improve your financial health this spring by thinking about your bottom line and applying your lifestyle to save the rest. You will find that you can easily reduce your monthly costs by cancelling subscriptions and avoiding expensive takeaways. Even some movement in this direction is worthwhile.