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Spring Clean Your Wallet In 2021

Spring cleaning your wallet in 2021

Last Updated on May 14, 2021 by Mr. FightToFIRE

Do you feel the spring fever?  Figuratively of course, otherwise I suggest you go see a doctor.

If you do, there is a good chance that you feel the urge to start cleaning and scrubbing and remove all the clutter out of the house. Maybe now is also a good time to take a look at your personal finances. Really go through your financial life and find out which clutter you can remove from your life to make it simpler and less stressful.
With these simple tips, your cleaning duties might also save you some money.

12 top tips for spring cleaning your personal finances

1. Dust of old money habits and streamline your budget

Take a good look at your groceries and recent purchases. Which of those costs were really needed and which ones were things you wanted because you thought you needed them? Which ones are costing you more than expected? For example, do you really need that many shoes? Or can you eat healthier and ditch all that candy?

Budgeting your life and clearing the clutter is a great way to reach your financial goals.  But just as things change in life (a child, new home, or job) so should your budget. Compare your income, expenses, and what’s left-over:

  • Will this get you to your financial goals?
  • Do you need to increase your income?
  • Do you need to reduce expenses?
  • How much/month needs to go to savings or emergency funds? Investing?

These are some of the questions you can answer through your budgeting process.

In the process you can learn a thing or two about yourself.

2. Evaluate your checking account(s)

The costs of a checking account are increasing every year due to low interest rates. Banks forward these costs to their clients more and more. As recent as April 2021, ING announced increased costs for some of its products.

However, even now, these costs can vary a lot. Of course, if you have a mortgage you don’t always have a choice, but if you have multiple accounts as I do, it can be interesting to look for more interesting options to at least reduce costs. You can easily compare checking and savings accounts on www.wikifin.be.

At the moment, the most interesting ones are:

3. Update your bank stuff

Continuing with banks; Look at your statements with a magnifying glass and make sure the withdrawals make sense.
Do you recognize them and are recurring costs such as subscriptions still needed?

4. Organize your administration

Even clearing the clutter can help you save money. By putting papers into binders and clearly organizing them immediately upon receiving them, you prevent fines and late fees.

This is especially important if you are self-employed. By staying on top of your administration you prevent missing out on tax deductions and benefits. Did you know that every year, you can get back withholding taxes on dividends?

5. Collect all your doctor notes

You might still have some laying around the house. Deposit them as soon as possible in your nearest national health insurance mailbox. The refunds you get from them are yours. Pay attention to the deadline though. You have two years to send them.

6. Go through your insurances with a comb

What is the most recent list of insurances you have? Do you know all of them, and if so, are you sure you aren’t double insured? Or maybe you can change the insurer and get covered cheaper or better. Stay on top of these as they can save you a lot of headaches when you actually need them. I speak from experience with this because thanks to good insurance and a quick response, I was able to save 1500 EUR last year.

7. Modernize your car insurance (if you have a car, obviously)

Remove unneeded ‘omnium’ insurance the moment your car is more than 3 to 5 years old. As soon as your car leaves the garage, it loses its value. After about 2 to 3 years, some models will have lost almost half their value [1] making full coverage obsolete as it will cost you more in premiums than repairs costs.

If you rarely drive your car, maybe kilometer insurance is more appropriate.

8. Clean up your utility contracts

Are you sure you still have the cheapest offer with your energy supplier? Compare the most recent rates using the compare tool of VREG.be. You can save up to €500 – €600 per year by just switching providers.

Important to note is that by using the comparison tool, you don’t get to see the ongoing promotions. It’s worth investing time in finding the best deal. In fact, nothing is stopping you from switching every year or two. Be careful though, these discounts can’t apply to the tax part, only the energy part and usually, there are strings attached. So, even with the V-test it’s important to pay attention to these points:

  •  Price
  • Fixed or variable rate
  • Green or old school
  • Big vs. small provider
  • Contract length

9. Scrub your subscriptions

As mentioned in point 3. cancel any and all subscriptions you don’t need or (barely) use.
Check if you can find a cheaper offer for the same service somewhere else.

10. Collect pocket change

While doing the actual spring cleaning in your house, collect all change in a jar and do something fun with it. Maybe you can go for a drink with your partner or friends after Corona?

11. Start saving more

Once you’ve done the above tips you might actually have some money left to save. Or better yet, save at the beginning of the month. budget your savings first. Learn to live with less to save more.

If you don’t have a small stash of cash in a savings account or (at the very least) a checking account, it’s time to build one. This highly depends on your personal situation:

  • Single or with a partner
  • Kids or no kids
  • Renting or owning a home
  •  Lease or a personal car

Depending on the variables your buffer can be anything between two months to 6 months. More than 6 shouldn’t be needed thanks to the social security system in place. Also note that this is an emergency fund and shouldn’t be considered as saving for other goals or early retirement 😉

12. Make your money work for you

What should be considered to retire early is investing anything you might have left into an efficient and solid investment portfolio. My own portfolio is growing steadily each month and year. I have now reached a point where some days an increase or decrease in value is worth a month’s salary. It won’t take long for it to surprise my yearly deposits and really start working for me.

Your money could start working for you as well. The sooner you start the better and you don’t need much. The plan for my daughter is something that will fit most people just fine.

Mr. FightToFIRE

I'm a developer for a major financial institution in Belgium that is present in over 40 countries. I have over 8 years of working experience in the development of customer applications focussing on all aspects of banking. This helped me gain a deep understanding of the inner workings of a commercial bank. All of this experience in both banking and life culminates in this blog about personal finance and my fight towards FIRE.

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