Top tips for spring cleaning your finances

Despite our best intentions, a recent study by Forbes*1 found that the average New Year's Resolution lasts just 3.74 months. The problem? More often than not, the resolutions we set for ourselves are so huge that it’s impossible to know how to achieve them.

But spring is a fresh opportunity to re-start. The key to achieving a huge financial goal – whether that’s to rid yourself of debt, save a certain amount of money, or increase your pension pot – is setting habits. The goal is what you want to achieve by the end of the year, but the habits (the things you do regularly) are the process that’ll get you there.

With that said, here are six top tips for spring cleaning your finances this spring:

1) Check your accounts regularly

It might seem like an obvious one, but regularly checking your bank accounts means you’ll know exactly what’s coming in, what’s going out and what you can afford to spend right now.

Even better, it means you can stop problems in their tracks; whether that be fraudulent charges or simply being a little too close to your overdraft (and the fees that come along with it) than you’d like.

So this spring, make checking your accounts a priority. This might be a weekly sit-down session where you review what you’ve spent and what you’ve got left to spend – or, if it feels more achievable – a quick balance check once per day.

2) Regularly review your bills

Bills might be essential, but it doesn’t mean they’re set in stone. Setting aside some time to go through your utility, broadband and phone bills a couple of times this season and beyond could potentially save you hundreds of pounds.

Use comparison sites to see if you could reduce your monthly or annual outgoings for broadband, TV and mobile services, as well as car, home, life and pet insurance payments – especially if you’re out of contract or it’s due for renewal.

If you do spot cheaper deals, it’s always worth haggling with your current provider, who’ll often be keen to keep you on board.

3) Track your non-essential spending

Reviewing your non-essential spending could greatly impact your financial health in spring, especially if you’ve got vacations to save up for.

Once every few months, take a look at your bank statement and write down what you’ve spent in the previous month and why. It can be helpful to split these into categories – for example, eating out, takeaways, gifts for friends/family and clothes shopping.

Once you’ve got the figures in front of you, it should be easy to see where you can cut back. This way, you can adjust your spending and direct money to where you need it more, such as into your savings account or to pay off debt.

4) Automate your savings account

Life is busy – and tends to get even busier in spring, when the weather is warmer – which means transferring money into your savings account might be the last thing on your priority list.

If you’re able to, setting up a standing order from your current to your savings account is a great way to automate the savings process. Scheduling it to go out immediately after you get paid is a good idea, too.

This means you’ll make saving a priority over your non-essential spending, rather than just saving whatever happens to be left in your account at the end of each month.

5) Create pots for special occasions

Having an everyday savings account is a great idea, but having to dip into it for Christmas, birthdays and vacations can make it feel impossible to build a substantial fund.

Instead, consider creating a savings pot for specific occasions that you know you’ll need extra funds for each year. Most online banking apps allow you to set up unlimited pots and automate the amount you put in each month.

For example, you might choose to put $30 a month into your Christmas pot. If you start in April, this means you’ll have $270 to put towards your festive spending once December rolls around, without having to take it out of your main savings account.

6) Aim to only buy what you can afford

Our research on Buy Now Pay Later (BNPL) services revealed that 15% of adults are missing important bill payments to ensure they have the money to meet a BNPL deadline, while one in six (16%) are missing BNPL payments regularly.

The danger of BNPL services is that they encourage you to overextend your finances and buy things you might not usually be able to afford. Many people don’t realise that BNPL is a form of credit, which means missed payments can have a detrimental impact on your credit score and impact what you’re able to borrow in the future.

So while it can sometimes make sense to spread the cost of purchases, aiming to save up and buy items outright wherever possible is a healthy habit to form this spring..

Become a more intentional buyer

Shopping for items you don’t need – but spontaneously notice – can add up fast. Being more intentional with your spending this spring, using the tips below, will lead to a much more financially healthy year:

• Create lists: When you think of an item you genuinely need, add it to a shopping list. Use this list to control what you spend your money on and re-consider impulse purchases – if it’s not on the list, do you really need it?
• Use the 48-hour rule: If you spot something you really want to buy but don’t necessarily need, wait 48 hours before buying. This gives you enough time to consider the purchase and research other options to make sure it's worth spending your money on.
• Research & compare prices: If you have something specific in mind, look for the best deals, compare prices online and seek out discount codes before buying.
• Beware of sales & special offers: Avoid being taken in by extreme discounts. If you don’t need an item, then you aren’t saving money by getting it at a lower price.

*1 New Year’s Resolutions Statistics 2024 - www.forbes.com/health/mind/new-years-resolutions-statistics/