Declutter your finances with these 4 money-organising steps

Simon Wells
Authored by Simon Wells
Posted Tuesday, March 30, 2021 - 2:16pm

There may always be something you can prioritise over organising your finances. However, there is no time like the present to declutter your finances and get your money organised. Doing so will make your life less stressful and give you greater clarity over your financial future.

Where do you start to declutter your finances? Here are four steps on your path to getting your finances organised.

1. Set Up Compartmentalised Bank Accounts 

Like having different drawers for different clothing items, you should adopt a similar ethos for your finances by having compartmentalised bank accounts. Organising your finances this way will give you greater visibility of your finances and more control of your money.

The various compartmentalised accounts you could set up include regular bills, essential spending, savings, and so on. Separating your finances in this way will give you a complete overview of your money. It also makes sense to keep the money you might be saving for a holiday away from that which you spend on your bills. 

Any money you set aside as long-term savings would be better off in a special savings account or an ISA. For your everyday and regular spending, having different current accounts is sufficient. You can set these up using a mobile banking application, and it is then straightforward to move money between each compartment. 

The result? Decluttered, organised, and more transparent finances.

2. Regularly Review Bills and Direct Debit Payments

When you've set up your various compartments, you can also use your banking app to review your regular payments. Setting up direct debits and standing orders makes paying bills easy. However, it also means you may not notice price rises.

Regularly spending a few minutes checking what's leaving your accounts could surprise you. The costs of mobile phone contracts, broadband services, or TV packages tend to increase. If you're not using them to their full capacity, consider downgrading or looking for a cheaper alternative.

Similarly, when it comes to renewing insurance policies. Generally, you'll get a great deal as a new customer, but the price may not remain low. Again, shop around for cheaper providers, and look for new introductory deals. You can save yourself a considerable amount of cash through this bit of finance decluttering.

You can also save yourself a fair bit of stress by organising your regular payments. Setting direct debits and standing orders to leave your account just after your monthly wages arrive in your account means that there should always be enough money available to pay your bills. Paying this way will save you the worry of not having enough left to cover your financial commitments. 

3. Get Rid of Your Debt

Getting freedom from your debts is a great feeling, and you can start doing it straight away by making some small sacrifices to your spending and lifestyle. Rather than concerning yourself with the things you'll miss, focus on the beautiful feeling that comes from being debt-free. 

Getting started on getting rid of your debts can seem daunting to begin with, particularly if you have amassed a considerable amount of debt or multiple debts. Listing your debts and prioritising them will help you get yourself organised and give you a plan of action. When dealing with your debts, you should tackle the debts with the most considerable amount of interest first. Ridding yourself of these high-interest payments will leave you more money available with which to clear the others. 

Debt can be damaging emotionally as well as financially. If you find yourself struggling to pay off your debts, there are support services that can help you.

4. Look After The ‘Future You’

Getting your finances in order will not only allow you to have a more enjoyable life in the present, but it also enables you to provide for yourself in the future. It can be challenging to understand how your life will be in three or four decades. However, starting to plan and save as soon as possible will mean that you have plenty of time to prepare for your retirement.

Where To Start With A Pension?

Part of looking after your future self is ensuring that you provide some income for the future. One of the best ways to do this is through a pension, but where do you start? The good news is that if you are employed earning over £10,000 and aged over twenty-two, you should be enrolled in a workplace pension scheme. Currently, 8% of your gross salary’s value gets contributed to such a pension. You pay 5% of your gross salary, which goes into your pension pot tax-free. The other 3% is made up of contributions from your employer.

If you don’t have any other private pension, having a workplace pension is a great fall-back. You will also receive the State Pension when you retire. Depending on your age, the point at which you receive this money may have risen. You can check your State Pension on the government website.

When looking at options for your private or workplace pension, get in touch with a regulated financial adviser such as Portafina or, view the info at Pension Wise.


 

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