Scott Malcolm guests posts this month on decluttering your financial life. Scott is a Financial Adviser for Money Mechanics and he’s fabulous at what he does. He’s not just any financial adviser… I’m proud to say he’s the adviser I use and trust. Recently he’s assisted me with insurances and superannuation. I know a few of my clients also use Scott. As he’s so good at what he does, I thought who better to write about getting your financial life in order than Scott. Here are the ins and outs about how to declutter your financial life.
Advice from Scott Malcolm, Money Mechanics
As a financial adviser, people often ask me what paperwork they should hang onto. If you are like me you will agree we are definitely not yet living in a paperless society.
When it comes to decluttering your financial life, what could you be doing to declutter and give your finances a bit of a spruce up? How can you get on the path to feeling empowered and in control of your money? Here are some ideas.
What documents to keep
You need to keep some records for the tax office. The last five years. You could scan things into electronic format so avoid filing cabinets full of documents.
Most banks will have online statements these days, which you can access and save to your records if you want. If you have investments, keep a file for the current year and shred the rest. Or as I say go electronic and get everything online as a soft copy where you can.
Clear out your cash flow
I admit to being a person who lived pay-to-pay when I first started working. The day after payday I would often wonder – where did it all go? I didn’t like feeling that my money was in control of me rather than the other way around.
The hardest part to this change is committing to making the time to go through your bank statement and spending habits. Invest in yourself and your financial wellbeing. Write it down and know your lifestyle number. (The number of dollars you need each week or fortnight to live your life). Once you know this, setup a working cash account. Each pay, have this amount deposited into this account to cover your lifestyle costs. Once it is gone, no more spending for that pay cycle. I also suggest you have a separate ‘bills’ account for structure and transparency on what you spend.
Review your existing expenses. Find things that you can switch from if you’re paying too much. Like insurances, gas, electricity, or your mobile phone bills). Look for things you can ditch. They may be things your not using anymore (companies love getting you stuck on regular monthly payments as it boost their cash flow). Maybe it’s things that you just don’t need anymore – recycle or sell them online. Remember every dollar you spend today is a dollar you can not spend in the future.
Spruce up your superannuation
There’s still $12 Billion in lost superannuation in Australia. Some of it could be yours so jump online and see what you can find. Only keep the super paperwork for the last 12 months and shred the rest.
Consolidate your funds into the one fund. Compare the pair… remembering to check the fees, investment performance and any insurance options you have built in. Check out the government’s Money Smart website which has some great resources to compare your existing super funds.
If you need help exploring issues of decluttering your financial life, talk to a professional. Start your journey to being free around your money and creating wealth with understanding.
About the author
Scott Malcolm (firstname.lastname@example.org) is Director of Money Mechanics (ph: 6257 5557) a fee for service advice firm which is authorised to provide financial advice through PATRON Financial Advice AFSL 307379.
The information provided on this article is of a general nature only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information you should consider its appropriateness having regard to your own objectives, financial situation and needs.