A declutter that takes places around a bank holiday is incredibly cathartic. There’s something about going through your home and systematically ridding yourself of all the things gathering dust and getting in the way. But you don’t just have to stop with your home, because decluttering is a great idea for your finances too.
This can start with your current account and clearing out direct debits that aren’t doing you any good. You might unearth payments you’d forgotten about that you’re getting no value from – for things like unused memberships or duplicate insurances.
It’s also a chance to weigh up whether the direct debits you know about are delivering enough value to be worthwhile. You’ll need to check you’ve completed any minimum terms, and contact the company to cancel, but then you can delete the debris. Scan for regular payments coming out of your account too. There could be subscriptions you set up on a card that you can cancel.
While you’re there, you can get rid of some of the regular faff around your finances. If you’re having to constantly remind yourself to pay bills, make credit card repayments, or put money into savings, it can absorb so much of your energy that you don’t have time to consider building for the future. By far the best approach is to automate all these things and set up direct debits, so you can free up the brain space for the bigger picture.
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The next step is to group together details of all the similar accounts you have. You might have more than one current account, a few savings accounts or a number of pensions. In some cases, you may have done this very deliberately. You might have a fallback current account for emergencies or be keeping an older pension that you haven’t looked at for a while. because it comes with such large penalties for closing it that it’s not worth it.
If you haven’t made active decisions to build this clutter, then it might just be creating needless admin. If this is the case, now is the time to go through the accounts and close any you don’t need. However, be sure to check with things like pensions that you aren’t incurring any expensive exit charges or missing out on any valuable benefits by transferring elsewhere.
If a significant chunk of the accounts you hold are credit cards and loans, it makes sense to declutter your debts too. This doesn’t just mean consolidating them – it means paying them down. This isn’t going to happen overnight, but if you draw up a budget of your earnings and spending, you can see where to cut back and free up cash to pay those debts off over time.