Bank Better, Live Better

Spring clean! Declutter your finances with this habit

While spring cleaning your finances may feel daunting, there’s one habit that can quickly help you declutter your financial life.

The negative effects of financial clutter

Unfinished tasks can be to your brain what an open tab is to your computer: If there are too many, nothing works as it should (or as fast as it should). Clutter in general causes stress because it constantly sends signals to your brain to take action – in other words, clean-up, organise or clear away.

Just like your mind, your finances can also get cluttered by money tasks you’ve been putting off (for example, saving towards your emergency fund or doing your tax return before the deadline) and the bills you need to pay.

Mental clutter caused by money worries – or financial clutter – makes it difficult to process information, make decisions or focus. Just the perception of not being in a good space financially has been found to lower your IQ by 9 – 10 points. An entire night without sleep has a similar effect.

Get your finances on track

The one habit that can help you to get your finances in order is a well thought through money plan. At the beginning of the year you probably promised yourself you’d cut your spending, pay off your debt and start saving. If you’re wondering what happened to those plans, one thing’s for sure, you didn’t stick to a personal money plan.

Money planning is the simple habit of regularly structuring your finances so you don’t end up wondering where it went. You may already track your spending, but without a money plan you were just recording clutter.

A money plan gives you control over your finances. It will relieve the stress of constantly wondering how you’re doing financially. It will also free up mental space to think, make good decisions and focus.

Tips for an effective money plan

Step 1: Earnings
How much do you earn? Write down your monthly salary plus any extra money that comes your way, such as rent, gifts, your annual bonus and side hustle money.


Step 2: Spending
Check your bank statements and receipts. Write down Every. Cent. Spent. That will tell you where your money really goes. Get into the habit of tracking every purchase you make. You can keep a physical money diary or if you’re a Capitec client download our app and track your spending on your bank statements for free.


Step 3: Put monthly expenses into categories
Now decide which things are essential (needs) and which are not essential (wants). You want to work towards a 50/30/20 split – 50% for living expenses, 30% for savings and other financial products, and 20% for lifestyle expenses. Be sure to also pay yourself first by transferring your savings into a savings plan at the beginning of the month. If you only transfer your savings at the end of the month you’re less likely to reach your savings goal and more likely to buy unnecessary things.


Step 4: See where you can make cuts
A money plan is ever-evolving and you have to keep chipping away at it, see where you can make smart cuts to save money. For instance, sharing monthly subscriptions to music or entertainment streaming services with family can save you hundreds of Rands in a year.

Simplify banking

While you’ve been decluttering your finances, we have decluttered banking. Use our app to help simplify the money planning process. Check your balances, bank statements and transfer money into savings plans from anywhere 24/7. Capitec clients pay no fees for these transactions, helping you to take control of your finances.

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