Tips For A Financial Spring Cleaning
By Khari Swann
Springtime brings about warm weather and new beginnings. Out with the old and in with the new. The warm weather gives you the perfect opportunity to do some spring cleaning. When most people think about spring cleaning they imagine going through their homes and tidying up. They think about performing a deep clean in the bathroom, kitchen, common areas, bedrooms, and basements. We go through our homes to get rid of all the clutter built up from the previous seasons as well as shed the old items that we no longer need and welcome in the new and improved version of ourselves.
We believe the same effort you put into cleaning your home, should also be put into spring cleaning your finances. A financial spring cleaning can help you organize what you already have, purge what you don’t need, and take stock of where you currently stand. All of these are great tools to use towards achieving your financial goals.
Continue reading for our helpful tips on spring cleaning your finances. When you’re done, take a listen to this episode of the AFFCU Financial Power Podcast.
Get Organized
Spring cleaning your finances starts with locating and consolidating all your financial documents, bills, and statements into one spot. Find a safe place to collect all those documents where they can be easily found when needed and not just hidden away which may result in a missed payment. Create a system for yourself to strategically file like items together. A great way to make organizing even easier is to sign up for e-statements. That way you always have your statements safe and secure in the palm of your hand with the touch of a button.
For your more important documents, you may want to consider a fireproof lock box to keep items even more secure. You can also consider renting a safe deposit box like those that AFFCU offers for their members, to keep documents and other valuables in a safe and secure location.
Purge And Simplify
Everyone is guilty of building up unnecessary clutter in their homes. We hold onto things far longer than we should and in turn it takes up valuable space. As you organize your financial documents, a major task is to consolidate what you have and identify items to keep and items to shred.
Those monthly bank statements and utility bills from years ago, expired debit and credit cards, old receipts, and any items that are not important but contain personal information should all be securely shredded. Be sure to remain vigilant that you are not getting rid of anything important. Items like automotive titles, warranty information, investment documents, deeds/mortgage paperwork, tax records, change of ownership documentation, etc. should not be shredded. Some great tools your financial institutions may offer to cut down on unnecessary physical documents include online and mobile banking and E-Statements.
Assess Your Financial Situation
Once you have organized and purged what you no longer need it’s time to take stock of where you stand financially. This is all about writing down your monthly bills with due dates and amounts included. It’s time to clear up any past due balances and outstanding debt. Schedule and budget out your money to make bill paying easier and less stressful for yourself. Set up your budget before the beginning of each month and prioritize your finances. Figure out what expenses are wants versus needs and plan ahead for any upcoming expenses, like trips and other activities.
Lastly, get used to budgeting to zero every month. After budgeting out your monthly income against all your bills, savings, and any other expenses, you should not have any money left over.
If you are in need of help regarding creating a plan for your finances, we are here for you. Talk with one of our in-house Certified Credit Union Financial Counselors by calling us at 410-584-7474 or schedule an appointment online. You also have access to our free KOFE financial guidance resources and their free financial coaches.
“Replant” Your Finances
As you assess your financial situation and review your updated budget, it may be a good time to what opportunities you have. The springtime is when many financial institutions begin to offer lending promotions. Perhaps you’ll find that you’ve over-extended your finances and need to borrow some money. Or maybe there is an opportunity to consolidate your debts into a single monthly payment with lower interest.
From Home Equity promotions, lower rate credit cards, and personal loans, there may be opportunities for you to consolidate debt to take some of the weight off your shoulders. This is a great way to lower your monthly payments and help make the rest of your year that much easier.
Remember that spring cleaning does not end with just tidying up your home. It’s also a great time to get your finances back in order. Organizing what you currently have in your possession, purge and shred everything unnecessary, and taking stock in your financial situation can keep you on the path to a brighter financial future.