A guide to decluttering your finances (and your life!)

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Retirement and our golden years can often find us in some interesting situations.

Being around longer than most people, the propensity to accumulate odds and ends increases as time goes on. What's worse is that we clutter our finances with little debts that gnaw away at our savings and nest egg.

Credit card debts might seem harmless when we're buying a little luxury here or there; the reality is that it's costing us hundreds or thousands of dollars in interest.

Here's a guide to decluttering one's finances - and our homes - tackling both problems with a similar approach.

You may have heard about the tidying craze pioneered by Japanese organising consultant (that's a real job, we're assured) Marie Kondo, who says that getting rid of unwanted clutter is as simple as asking oneself if the item "sparks joy".

If it does not spark joy or happiness (or even utility), then throw it away.

You should also be "ruthless" in terms of getting rid of clutter. Asking an impartial friend over to help is one way to keep you on task.

Decluttering also means you can sell what you don't need in a garage sale or piece by piece online using Gumtree or eBay.

A good reason to declutter is to downsize your home. If you're living in your original family home with three or four bedrooms or two storeys as a couple, downsizing to a smaller home can help with your finances.

Selling your large home for a small home can often wipe out smaller debts if you choose a home that's cheaper than the value of your original dwelling.

Of course, this may not be an option for some retirees, so debt consolidation is the next best choice.

Some banks and lenders will lend retirees money to consolidate debts.

Though you may not work full time anymore, you may be asset rich or have regular income from your pension or super fund.

Banks and lenders understand that self-funded retirees may need faster access to cash than what their fund allows.

"Consolidating debts with a personal loan will wipe out your high-interest debts so you can manage repayments in one single figure," says loan expert and Savvy CEO Bill Tsouvalas.

"This keeps your finances free of clutter from annoying little debts!"

As always, there is eligibility criteria to meet. This may be financial statements from "irregular" income sources such as investments, asset balances, and other information.

Ask a lender or broker to help you with all the documentation. Remember: don't apply for a loan unless you're 100 per cent ready. Multiple loan applications can hurt your credit file and chances of approval.

For more information go to www.savvy.com.au

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