woman who cleaned up her finances and found extra cash

11 Tips on How to Clean Up Your Finances

Melanie Communications

By Mélanie Préfontaine-Darius, Communications  BA, FMA, FCSI, CDMS, CFE, CETS

When we think of spring cleaning the first thing that may come to mind is doing a deep clean of the house and of the yard.  Spring is also a time when we file our personal taxes.  With the house, yard and personal taxes in order, it is a good time to do a pulse check on our finances.  Below are a few tips to help you with this.

Tips To Help Clean Your Finances:

  1. Complete a financial health check to know where you are today, you can do this by listing your assets and liabilities.
  2. If your list of liabilities is long, it is helpful to break it down with a table that includes headers like type of product, credit limit, interest rate being charged, balance owing, minimum payment and minimum payment due date. For example:

  1. Once you have the list of liabilities/obligations completed you need to show how you are paying these off using your current sources of income. If you are making minimum payments only, it will take you much longer to pay off and the more you will pay on the initial amount borrowed in the end.
  2. It is usually best to pay off the high interest obligations first because they cost you more.
  3. If you have room on a lower interest product, such as shown in the example above with the low balance on the TD LOC, you could transfer the balance from the TD VISA to the LOC.  This consolidates your monthly payment onto the lower interest product.  You can now focus on paying off the LOC by making more than the minimum payment.
  4. Only put on your credit card what you know you can pay back before you start getting charged interest.  This can differ from product to product but is usually three weeks.  Remember that credit is not free money, it is an IOU to the bank. 
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holding a savings jar
  1. If the monthly minimum payments for all obligations is more than you can financially support, you should consider contacting your bank to ask about a consolidation loan. A consolidation loan consolidates all balances owing onto one product, usually at a lower interest rate resulting in a manageable single monthly payment to get you back on track.
  2. If you have multiple credit products with different institutions you can contact a credit counselling company such as Money Mentors to help you with consolidating your obligations and getting you on a payment plan to freedom.
  3. To prevent credit from getting out of control you can start by building a budget, reviewing it regularly and sticking to it. It’s your personal cash flow statement. Identify your sources of income monthly and identify each of your expenses monthly.  The general rule of thumb is not to spend more than 70% of what you make.  The remaining 30% is split between charitable donations, savings and capital projects/investments.
  4. Also, It is a good idea to check your credit report regularly with either Equifax or Trans Union to make sure there are no errors, and to see your credit rating improve over time.
  5. Setting up a filing system for your financial documents is important. These documents should be easily accessible.
Melanie Communications
About the Author

I healed my autoimmune disease and have been cancer free for more than ten years.  I attribute much of this healing success to my commitment and positive attitude to making specific lifestyle changes, being disciplined in the process and continuously learning/studying.  I respect and understand that a one size fits all approach to health or medicine is the wrong approach and can leave many harmed.  I am currently a student enrolled in a holistic nutrition program and anticipate successfully completing the program and becoming a Certified Holistic Nutritional Consultant (C.H.N.C) in Alberta, soon.  In good health, Mélanie.

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