Could your finances benefit from a spring clean? You could take some inspiration from the Swedes. They believe in ‘döstädning,’ or ‘death cleaning.’ Despite the name, it’s really about simplifying life, reducing clutter and making things easier for the people around you.
The concept became widely known after the 2018 book The Gentle Art of Swedish Death Cleaning by Margareta Magnusson. While it focuses on organising your home and belongings, many of the same principles work brilliantly for your finances too.
Why should you spring clean your finances?
Firstly, it can help you feel more in control of your money. Second, it can help you refocus your time (and money) on what matters most to you. And third, taking time to organise your finances now could spare your loved ones from a great deal of emotional and financial stress after you die.
Key steps in a financial spring clean
It’s a good idea to make a checklist and work your way through. Key steps include:
- Streamline your finances - Close accounts you don’t use, cancel unused subscriptions or memberships, and explore ways to cut back on wasteful spending.
- Build a document library - Gather all important documents, including Wills, insurance policies, investment portfolios and property deeds. Consider storing documents securely online. Having an easily-accessible document library will help make sure your loved ones can find critical information quickly when needed.
- Keep beneficiary information up to date - Review and update beneficiary details on life insurance policies, pensions and expressions of wishes to ensure they reflect your current intentions.
- Revisit your investments - Check whether your investments still align with your long-term goals, risk appetite and current circumstances. We’ll monitor performance and rebalance when needed, but updating us on any changes helps ensure recommendations remain suitable.
- Maximise tax-efficiency - The new tax year (6 April) will bring about new opportunities, allowances and reliefs to take advantage of, to reduce your tax liability. This includes revisiting your Inheritance Tax (IHT) strategy, which can help reduce the liability on your estate.
- Consider your retirement plan - Assess whether you’re saving enough for the lifestyle you want in retirement, whether your investments are appropriate and whether consolidating multiple pension pots could be beneficial.
Keeping others informed
Sharing your financial arrangements with trusted family members and updating them on any changes is an important part of the process. Intergenerational financial planning involves managing wealth and financial strategies across multiple generations of a family, focusing on ensuring financial security, preserving assets and facilitating smooth wealth transfer while considering tax implications, estate planning and family values. They’re really valuable conversations to have.
Taking control
A financial spring clean is about more than tidying up paperwork. It’s about simplifying your life, gaining clarity and putting yourself, and those you care about, in a stronger position for the future. Maybe the Swedes are onto something! We can help you get organised so you can focus on enjoying life.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.