Tips for Financial Spring Cleaning
By Celeste Lohrenz
Now that the weather is finally getting nicer, there are countless projects around the house you may want to tackle. Maybe you’ve already gotten your lawn into better shape, or planted your garden, or even done some annual spring cleaning. Have you given the same attention to your finances? Just as you go through spring maintenance in and around your home, your finances may be in need of some polishing to make sure you’re getting the most out of your money.
Here are some tips to help get you started on getting your finances in shape.
Reduce clutter – If you’ve changed jobs several times during your career, you may have old retirement accounts that you aren’t managing anymore. Looking into closing or moving them into your more active accounts will help you track you overall financial health, and will reduce your security risk by eliminating those accounts you don’t monitor.
Organize your documents – Take some time to make sure all your financial documents are organized in one place. That way, you always know where they are when you need them, and it gives you a chance to do an inventory and locate items you may have misplaced or lost over the years. You can do the same with your digital records – create folders in your computer storage and email specifically for financial records. Be sure to password protecting those files and emails for added security. Physically or digitally shred any old documents you no longer need.
Clean your home – In addition to your financial clutter, you may have acquired a host of items over the years you no longer use. Go through your home and collect those items and sort them into three groups: sell, donate, throw out. You may be able to claim your donations as a tax deduction if you itemize your returns, or you can sell them using local social media sites.
Retirement planning – If you don’t regularly re-assess your retirement finances, take a look at your IRAs and 401k accounts to make sure your contributions and savings are on track for a comfortable retirement.
Look over your budget – Take a close look at your monthly budget. See where you may be overspending or paying for things you don’t need of use, like redundant digital services. It may take several modifications to get to a budget you’re comfortable with. If you haven’t created a budget, this could be a great time to do it. Tracking you spending is the easiest way to start saving more. In addition to a monthly budget, you can set an annual goal for savings.
Create a bill schedule – Most of your bills can probably be set to pay automatically. This will help keep your payments on time and reduce the risk of late fees and credit damage. You can also create a spreadsheet with every monthly bill (mortgage/rent, loans, credit cards, utilities, phone, etc.), so you can more easily track your payments and keep them on time. If you’re living with roommates, this can be a great way to manage combined bills.
Emergency fund – If you’ve had to dip into your emergency fund during the coronavirus pandemic, you should consider making a plan for replenishing it as things start to return to normal. If you don’t have an emergency fund, the current situation is a great example of why you should.
Automate saving – There are many tools that can help you automate saving, like Plinqit, a free tool that lets you set your personal savings targets and schedules based on your budgeting needs. You can even earn additional money in several ways, like reaching your goals, referring others, and using financial education resources.
Cyber security – Make sure all your digital devices have good security software installed, including your smartphones, to reduce the risk of your accounts and finances being compromised. Be sure to use very secure passwords and multiple layers of authentication.
It’s a good idea to regularly monitor all your financial accounts and credit reports to make sure everything is in order and you haven’t been compromised. Going through this financial spring cleaning list can make it easier to manage your financial health. If you need advice or information on any of your accounts, services, or tools, your we are ready to help.