We've all fallen guilty to it. The sudden desire to declutter our houses, throw everything out and only keep the things that 'spark joy' – a nod to Marie Kondo. But when it comes to our personal finances it can be much harder to organise.
In a world that uses jargon it can be intimidating to even approach the labyrinth that is your personal finances. But it doesn't have to be that way. As we approach the end of the financial year, it is the perfect time to get a grip on your finances and ultimately make them work for you.
Question: What is the first step in decluttering our finances?
Caroline Raffan: We have all fallen guilty to it. The sudden desire to declutter our homes, throw everything out and only keep items that "spark joy" but when it comes to our personal finances it can be much harder to organise. The most important part about embarking on a declutter journey is to understand what matters to you and removing all items that are not valuable to you. This same mindset can be applied to budgeting, ensure your budgets are set to your values and what you value. Once you establish what you value you can start with the easy to declutter items. Think about it, when decluttering a room, you start with the stacks of unread magazines and newspapers – not with the family heirlooms.
Question: How does doing this enable us to take control of our money and live more freely?
Caroline Raffan: Decluttering means giving every item a dedicated place so that when an item is out of place it can be spotted and returned. Once you start arranging your money into dedicated accounts or savings accounts you start to have more control and understanding of your cashflow and financial habits. With more knowledge comes more confidences, control and freedom. You understand when and where you can splurge or when and where you need to tighten your spending.
Question: What is the best piece of financial advice you were ever told?
Caroline Raffan: When I first started earning my own pay checks and became independent from the bank of Mum and Dad, my parents encouraged me to have a 'just in case' stash of money at my disposal about 1-2k. This stash (which has been used and replenished over the years) has really helped me out when unexpected expenses have popped up.
Question: Can you share your top tips for decluttering our finance?
Caroline Raffan: Know what you earn
It seems obvious but it's vital to lay out what money is available to you. By tracking your cash flow you will be able to identify where spending is necessary and where savings can be made.
Base your budget on your values
Just as you declutter your house, it's important to prioritise your finances on things that you value spending your money on. Understanding what is important to you and knowing where your money is actually being spent is a powerful tool to change spending habits.
Getting the right credit card for you
Being credit card free is not all it's cracked up to be. Having the right credit card can be a real game changer in managing your personal finances. Find out how to get the best deal for you from a credible credit card specialist like Credit Card Compare.
Simplify your super
It's easy to lose track out your superannuation once you've changed jobs a few times. But your super balance will become one of your biggest financial assets so it is vital to make sure you are receiving the contributions you're entitled to and knowing where they are! You'll thank yourself in the long run.
Interview by Brooke Hunter