A drawer full of invoices and another of unopened bank statements, a pile of receipts in the car and another collection in your wallet – sound familiar?

Many of us lack the structure and control to keep our financial records organised and secure. But consider you can’t manage what you don’t measure, disorganised financial records will lead to disorganised and mismanaged finances.

With September ringing in the start of spring, many of us are embarking on a spring cleaning mission in our homes and cupboards. Why not take the time spring clean your financial life too?

Before you feel overwhelmed by the prospect, relax. We have three simple steps to spring clean and refresh your financial records and kick-start a plan to improve your future financial situation.

1. Where are you now?

Gather and organise all your financial documentation that have not been filed or sorted out.

Action: Organise

Decide on an organisation method that works best for you and stick with it. One way that works well is to organise regular bills and financial statements by month or by account. For bank statements, aim to keep six months’ statements on hand. If necessary, you can always approach your bank for more but this may come at a cost.

Then, one or two files with clear dividers and labels are all you need to order the documentation.

Benefit:

A clear list of what you have, what you owe and to whom, as well as a reference of what you have spent in the past.

This not only makes budgeting and prioritising bills a little easier but will also make life slightly less stressful during tax season.

2. Do you know your credit status?

Your credit score can influence whether you qualify for credit, the interest rates you will be offered, and in some cases even insurance premiums.

Action: Investigate

You can access your credit records and history from a number of credit bureaus with a few mouse clicks and some basic personal details. For example, try https://www.mycreditrecord.co.za/ for an easy process.

Benefit:

Monitoring your credit record will not only help you know your own credit status and help to keep it healthy but will also serve as a reminder of when bad records can be removed. For example, bankruptcy must be removed from your credit report after 10 years and late payments after seven.

Another good and increasingly important reason to check your own credit record, is to monitor for signs of identity theft.

 

3. Honestly, how much debt do you have?

You may be in denial about your debt, but face up to the fact that it is not going away by itself. The only way to change this is by being honest about it, seeking help and putting a plan in place.

Action: Plan

It may seem hard to get to take control of debt, but there are changes you can make to your budget and lifestyle to better manage your money in the long-term.

For the short-term, a professional can also help you consolidate your debt and work out a realistic payment plan.

Working out a payment plan can seem daunting, but it doesn’t have to be. Here are some tips on where to start:

  • Identify the amount of debt owed to each credit provider as well as the interest rate associated with each debt.
  • Pay off debt attracting the highest interest rates first.
  • Do not default on repayments, especially on high-interest debt.
  • Be realistic in your budgeting and cut back on unnecessary expenses.
  • When applying for finance in future, always go for reputable lenders that are registered with the National Credit Regulator.

Benefit:

Findings from Debt Rescue in 2015 showed that the average South African has approximately R70,000 in debt and that more than 11 million of South Africa’s credit active consumers are described as over-indebted.

By eliminating debt, or at least working on a plan to do so, you will be free from the burden of interest and lost sleep over not being able to make the repayments. Give yourself the gift and freedom living debt-free.