It’s that time of year, spring cleaning! You’ve likely begun tackling tasks such as organizing closets, washing windows, and other household chores. It’s also the perfect time to break out your financial dustpan and clean up your personal finances.
So how do you spring-clean your finances?
Reevaluate your financial goals
Whether you’re planning for retirement, setting aside money for a college fund, or preparing for your next vacation, everyone has long-term, mid-term, and short-term financial goals.
Life can be unpredictable, and those goals may change. Now is the perfect opportunity to check in on your progress, and adjust your spending, saving, and investing to keep you on track.
Simplify your finances
Over time, we can accumulate things in our finances, just like we do in our homes. How many credit cards do you have? How many bank accounts do you have? Do you have multiple retirement accounts from previous employers? You don’t have to clean it all up at once, instead opt to do the easy things first, like bank accounts. If you have multiple accounts at multiple financial institutions, consider consolidating to one.
Shred and go paperless
Do you have a stack of past statements, bills, and other financial documents cluttering up your home? Many of these you simply don’t need any more with the exception of those from a government entity (federal, state, etc.). Financial documents contain a ton of personal information thieves would love to have; the best option is to shred them.
If you’re still getting paper statements, why not change to paperless? This includes bank account statements, credit card statements, even bills. Going paperless reduces the physical clutter in your home and saves you the time of disposing them. Plus, when you receive statements digitally, you can easily track your finances because your statements are all in one place.
Review your monthly and recurring expenses
When was the last time you took a deep look at your finances? Just like going through your closet, you can take inventory of your income and expenses to determine where to cut wasteful spending.
Recurring expenses such as tv streaming services and monthly delivery subscriptions are gaining in popularity. It’s easy to subscribe and forget. Often these monthly charges are small enough to not notice but add up over time. How many are you subscribed to? Consider canceling the ones you do not use. You can always resubscribe to them in the future.
Budget for the non-monthly expenses
Budgeting for your monthly expenses is easy. No one forgets their rent or mortgage payment. However, most people forget to budget for upcoming weddings, birthdays, and such. Just because these expenses don’t pop up every month, doesn’t mean they can’t throw a wrench in your monthly budget. Instead, plan ahead for the year by setting aside money each month for those extra expenses.
Review your credit report
Your credit report provides a snapshot of your financial history and can have a big impact on your future financial goals. You can check your credit report annually for free at annualcreditreport.com to make sure you are on the right track. Once you review your credit report, you may want to take action on certain items. If you notice something wrong on your report, you can dispute these errors with the credit bureau. This is also a great time to address any negative items on your report and come up with a plan on how to take care of outstanding bills or arrange payment plans.
Financial spring cleaning is not the most glamorous or enjoyable activity. However, taking the time to work through this list can help tie up any loose ends with your finances and allow you to enter the summer months with peace of mind knowing that your finances are in order.