5 easy ways to spring-clean your finances
Prepare your dust pans and sponges - because spring cleaning season is officially here! For most people, that means tidying up their houses or getting started on yard work. However, this time of year is also the perfect opportunity to freshen up your finances. Continue reading for 5 easy ways to spring-clean your finances this season!
1.refresh your budget
A well-organized and detailed budget is key to maintaining excellent financial health! Refresh yours this season by determining if your budget needs to be reworked or your savings plan needs to be adjusted. You can also take this time to look for new areas to cut back on spending - such as canceling unused subscriptions or dining out less.
If you don’t currently have a budget, get one started now! Financial experts agree - budgeting is essential for anyone trying to save money, pay off debt, or make a large upcoming purchase. A clear budget can also help you build an emergency fund and avoid the dreaded “paycheck-to-paycheck” lifestyle.
If you’re unsure how to start a budget - BlueOx has you covered! We offer many fantastic resources intended to help people save money and build a proper budget, such as:
pro tip – Create a monthly budget in two easy steps with this budgeting worksheet! With this worksheet, you’ll calculate your monthly expenses and income to get a clear idea of how much money you have to work with each month and how much you can realistically save.
2. revisit your financial goals
Were you among the many people who set new financial goals at the beginning of the year? If so, this is the perfect time to revisit them! Even if it wasn't your New Year's Resolution to save money, reviewing your financial goals every few months is beneficial. This will allow you to evaluate your progress and help you stay motivated. Also, you may need to adjust your plan or start fresh and establish new goals!
If you don't have any financial goals to revisit, take this as an opportunity to create some. Whether it's for a new vehicle or paying down debt – we all have something we could be saving for!
pro tip – Use the S.M.A.R.T method to create the most satisfactory financial goals. Creating a S.M.A.R.T. goal will significantly increase your chance of accomplishing your plan and help you stay focused.
3. review your credit report
Checking your credit report is the best way to gain a distinct understanding of your credit position. It’s incredibly important to stay aware of your credit history and score. A good or excellent credit score will give you better purchasing power and lower interest rates. Reviewing your score often will help you maintain a good score or make necessary improvements.
When reviewing your credit report, keep an eye out for potential errors - such as accounts that are reported more than once or an incorrect spelling of your name. If something doesn’t look right, you’ll want to dispute it with the credit bureau – especially if you see signs of identity theft. These include wrong account numbers, inaccurate credit limits, and accounts that aren’t yours.
Errors in your report can negatively affect your credit score, making it harder to get a loan, open a credit card, or rent an apartment. Check out this helpful article for everything you need to know about fixing errors on your report.
pro tip – The concept of credit can be a confusing financial topic. This is unfortunate, considering understanding your credit history is vital to financial wellness. Luckily, there are resources available to help you learn! Use this tip sheet for information about the factors affecting your credit score and how to improve it.
4. make a plan for your debt
Spring is the perfect time to freshen up your debt management plan! Especially if you used your credit card a little more than usual around the holidays. To start, list all your debts and their interest rates, including credit card debt, auto loans, and personal loans. Then determine how you'll pay them off and within what timeframe. The right debt strategy will depend on a few factors - such as your balances, credit score, and current financial obligations. Two of the most popular methods to consider are the snowball and the avalanche:
- Snowball method – Pay off your smallest debts first before moving on to the larger ones.
- Avalanche method – Pay off your debts with the highest interest rates first.
When choosing your payoff goal date, make sure you stay realistic and consider your monthly finances. We’d all love to be completely debt free by the following year, but sometimes, it’s not a possibility. Using a debt payoff calculator is an accurate and easy way to set an achievable goal. You can also see how making minor adjustments to your payments will save you money in interest.
pro tip – Debt consolidation is the process of using new financing to combine multiple debts into a single monthly payment. You may benefit from this tactic if you have a good credit score and want to pay off high-interest debt. Check out our blog, Everything You Need to Know About Debt Consolidation, to learn more.
5. organize your financial documents
Are you someone whose desk seems to continuously accumulate paperwork? If so, you’re definitely not alone! Most people have at least one folder that's packed full of outdated documents. Take some time throughout your spring cleaning to toss out your old papers and organize the files you need to keep – just make sure to have a shredder around for any sensitive information!
If you’re still getting paper statements from your financial institution, consider switching to eStatements and paperless transactions instead. Not only is this an eco-friendly option, but it'll also help you declutter your space! Digital banking allows you to do most financial transactions directly from your phone or computer, including paying bills, checking your balances, and transferring money - saving you an inconvenient trip to the bank! You can free up even more space by uploading your important paper records into a digital vault. This approach will help you stay organized in the future and protect your privacy.
what’s next?
Need some help freshening up your finances?? Our partners at GreenPath Financial Wellness are available! GreenPath has over 60 years of experience helping people build financial health and resiliency. Call today at 877-377-3399, and one of their kind, caring NFCC-certified counselors will help you develop an action plan to make informed financial decisions and find your path to a bright financial future. It's FREE, no pressure, and 100% confidential!
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