Seven Tips for Spring Cleaning Your Finances
What’s better than the feeling of spring, of freshness? Starting with a clean slate is refreshing, and Spring-cleaning your finances is of the best ways to feel confident and at ease with your financial situation. Here are ten things to do this season to put the spring back in your step when it comes to your financial sustainability:
1) Cash Flow Audit – First and foremost, you need to know exactly where your money is going. Too many people swipe their debit or credit cards and don’t think about it again. Have a look at your bank account transactions, eliminate payments to things you no longer need, such as cancelled gym memberships, magazine subscriptions, and extended warranties. Also, go through everything with a fine-tooth comb, and you may find double payments. For example, if you or your family member had another Netflix account that you never use, but are still paying for, you should cancel the account and save yourself from making that unnecessary payment.
2) Life Insurance – It’s not the most fun topic of conversation, but discussing life insurance is important. If you have made any major life changes, such as a new house, new job, or an addition to the family, you should re-evaluate your life insurance policy and payment.
3) Home and Auto Insurance – The same applies to home and auto insurance. You may be paying more than is necessary for your current situation, or perhaps you are not paying enough and do not have the coverage that could protect you in a tough situation.
4) Consolidate – One of the biggest drains on money comes from interest on debts. Many Americans have significant debts, from student loans to credit cards and mortgages, which require consistent attention and payments. It’s a good idea to look into loan consolidation, especially if you can find a consolidation program with a lower interest rate. Not only will it keep some of that money from leaving your wallet, but it also makes payments more convenient, so you don’t have as many transactions to keep track of.
5) Review Expenses – During this cleaning out process, it’s important to take a second look at what you are spending money on. If money is tight, and you notice in your research that you are spending a great deal on restaurants and entertainment, then it might be worthwhile to plan to eat at home more, or rent movies rather than seeing them in theaters.
6) Create a Budget, Set Your Goals – Part two of reviewing your expenses is making a budget. Some people love it, some people hate it, but it is always a very useful tool to keep track of, and hold on to, your money. You can set savings goals, or debt-paying goals, determine how much you want to spend on certain things like food and entertainment, and in the long run keep more money in your pockets.
7) Savings – Depending on your financial situation, your savings account may not be something that gets a lot of attention. A great part of spring-cleaning your finances is finding and allocating extra money that you can repurpose to become a nest egg in your savings account. Adding to your savings is also a great budgeting goal!