Each year, many people spend the last few days of January frantically going through paperwork to meet the tax return deadline. There are, of course, others who can smugly say that they had the return filed the previous April. But aside from avoiding the panic of HMRC deadlines, there are many other benefits to being well-organised when it comes to your finances.
Here at Serenity Financial Planning, we believe being organised is not just a way of feeling more in control of your money and having a greater peace of mind. Well-organised finances are also a great facilitator in turning your ideal life plan into a reality.
Here are four habits that will help you to make peace with your finances so that you always have what you need to hand for any situation, whether it be applying for a remortgage, a home improvement loan or that dreaded tax return.
Do you really need that loan agreement for that three piece suite you bought for your first flat in 1997? Of course not. HMRC requires that you keep records going back for five years after the final submission date so just bin anything that’s older than six. Few of us have time to go through all our files in one sweep, so simply get into the habit of filing each new item you actually need to keep and taking a few things out at the same time. This way you will have space to store your more recent records as well as being able to file incoming receipts and paperwork for future returns.
Go as paperless as possible
In the digital age, we don’t need to keep many records as a hard, paper copy. Switch to receiving statements online only and filing emailed receipts in a clearly labelled folder on your computer which can be so easily kept in date order. Not only will you be able to access whatever financial information you need with a simple search on the computer, but the absence of paper in your office space will have a knock-on effect to keeping other areas of your home – and life – clutter free.
Turn your monthly audit into a treat
It is far easier to work out expenses and to keep track of your progress in meeting your life plan goals if you have kept records month by month as you are going along. The best way to do this is to have a monthly check of all your statements. This will enable you to have a regular reality check on what you are spending and any monies that may have come out in error as well as highlighting any regular payments that are being made for things that you no longer use (club memberships, magazine subscriptions) or areas where you can save money by switching supplier or renewing insurance. To do just one of these every month can help boost your savings pot or enable you to plan for a treat like a family weekend away or a theatre trip later in the year. The extreme scenario is that you may just realise you don’t actually need to be working as hard as you do because you don’t need to earn quite so much month by month, something that is not so unusual for Serenity Financial Planning clients to discover.
Pretend April is January
For most self assessments, the tax year ends in April but you have another nine months to file your return. Usually, that means eight months of procrastinating. So why not just set yourself a new deadline to get it done by the end of April? Not only will the feeling of smugness be immense for the rest of the year but, once you have calculated your tax bill, you’ll have time to enjoy anything that is leftover that you would have unnecessarily kept aside in the tax pot.