So who has started spring cleaning? Do you have a good system in place so it doesn’t take hours and hours to get the job done? There certainly are a lot of cleaning checklists on Pinterest and Instagram. As we’re thinking about spring cleaning our homes, it’s also the perfect time to spring clean your finances. The first quarter is over, and last year taxes have been completed so let’s get organized financially for the rest of the year.
Here are 10 ideas for spring cleaning your finances.
Check your credit reports. You can check your credit report from each of the three credit bureaus once a year so I recommend checking one at the end of April, one at the end of August, and one at the end of December. Credit report mistakes can prevent you from getting a loan or force you into paying a higher interest rate. If you see any errors or fraudulent activity on your credit report, file a dispute with the credit bureau right away.
Review your monthly budget. Your current budget may need to be adjusted. Maybe you got a raise. Maybe you’re paying more for groceries. Budgets are meant to be reviewed and revised as needed and as things in your life change. Planning appropriately for these changes will help you be able to stick to your budget and prevent overspending!
If you don’t already have a budget, now is the time to create one. If you need help with that, check out our Fund Your Freedom bundle and learn how to be good with money in just 7 days!
Clean out and organize your paperwork. Whether you have a file cabinet full of paperwork or all of your important papers are digital and saved on your computer, this is a good time to clean and organize your files. If your files are saved digitally, ensure that you have a reliable backup system in place and you are only keeping files that you need. We can still be overwhelmed by digital documents if we continue to save things we don’t need.
Automate your savings and investments. If you’re not already doing this, please consider setting this up today. Automation is the easiest way to make sure you are paying yourself first and consistently making progress towards your savings and investment goals.
Automate bill paying. Automating the bill paying process will eliminate late fees and make this monthly process so easy! You can include the bill pay dates in your budget so you know that you always have the funds to pay your bills. And then when the money is withdrawn from your bank account on the same day each month, you will know that your bills are paid in full and on time!
Adjust your tax withholding if needed. If you received a tax refund or owed the IRS money this tax season, then your tax withholding may need to be adjusted. If you’re withholding too much money from your paycheck, you are essentially allowing the government to “borrow” your money. If you are having too little money withheld, you may incur IRS penalties and have to pay them a lump sum before the tax deadline.
Click here for the IRS Tax Withholding Estimator to help you estimate the federal income tax you want withheld from your paycheck.
Consolidate your accounts. Managing multiple accounts at different banks and/or credit card institutions can be very time consuming. Do you have to log into multiple accounts each month to check statements? Are you driving to multiple banks to take care of your finances? If you have accounts that are not serving a specific purpose, then this is a perfect time to look at those and make some decisions about consolidating.
Evaluate your financial goals. Check on your progress towards meeting your financial goals and make adjustments as needed so you can stay on track. Some questions to ask yourself may be: Do you have enough cash in your emergency fund? Are you paying off any credit card debt? Can you increase the amount of money that you’re putting in a retirement account?
Plan and budget for irregular expenses. Irregular expenses can easily derail even a well-planned budget if they are not accounted for. Summertime is fast approaching and along with it can be graduations, weddings, showers, vacations and then right after Summer we quickly move into the holiday season.
It’s best to budget for these irregular expenses - if you don’t know yet exactly what you’ll need the money for, you can keep the category general. But be sure that you’re budgeting for it each month so these unexpected expenses don’t derail your progress towards your goals.
Create a simple system for tracking your money. I know it can be difficult to find a tracking system that works for you. But if you’re not tracking where your money is going, then you’re not likely going to have success in reaching your goals. I developed a system that is streamlined, all-inclusive, and easy to use. The Personal Financial Planner will help you keep track of your money as you progress toward your goals. It also helps ease the anxiety around money and finances because it’s simple and easy to use.
A clean and organized home and finances don’t happen overnight or without a little work, but once you have a system in place, getting them both your home and your finances “sparkling clean” becomes much easier and less time-consuming. So set aside some time to tackle your spring cleaning. Doing the cleaning now will help set you up for success for the rest of the year!
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