Spring Cleaning isn’t just for your houses, kitchens, and closets. You can Spring Clean anything! It’s in your favor to take a look at your budget and finances and spring clean your finances also. Especially, coming out of the season of giving and the cold winter days.
The hustle and bustle of winter can leave you feeling spent and stiff. It’s a good idea to take a hard look at your holiday spending, health insurance, and long-term savings goals/accounts. All of our vital to your overall financial wellbeing.
Before you read the tips below; understand this. It’s best to tackle one area at a time. Don’t focus on saving 15% of your income or tens of thousands for your kids’ college fund—that can get overwhelming! Set a timetable for yourself for each task.
There’s no need to compare your progress to everyone else’s and think you’re not winning because you’re not at their level. Give yourself time, and work towards your financial goals. Start with a small task.
If you begin cleaning and organizing your grocery budget, do something small and simple like going over the weekly expenditures with your spouse to get yourself into a work groove and see some progress. Just like your debt snowball where you target one debt at a time, starting with the smallest.
It’s time to make a budget to kick off your spring-cleaning efforts. Check out these, 7 Tips About Spring Cleaning Your Finances You Can’t Afford To Miss.
Related: How to Make a $1,000 in One Month
Spring Cleaning Your Finances Tip 1: Change passwords for bank accounts and credit cards.
A change in seasons is a great time to update. This way, you only have the same password or pin for 3-4 months out of the year. Changing them frequently keeps the chance of your information getting stolen to a minimum.
Spring Cleaning Your Finances Tip 2: Go through financial paperwork and do a deep clean.
- Becoming aware of your financial health. You can’t change something you’re unaware of.
- Participate in a daily challenge – write down everything you spend your money on.
- What’s your debt to savings ratio?
- Get serious about how you’re spending, & where you can be saving.
- Use a Cash Envelope System
- Use a Cash Envelope System – is setting aside X amount for expenses per week.
- Allows you to see how you’re spending habits.
- Use a Budgeting App Like Personal Capital
- Set up a budget for each area of your spending (like rent, food, travel, and clothing) and see what you have and what you owe at a glance.
- I personally use this to track my net worth & it works wonders. I highly recommend it, it’s interface is user-friendly.
- It’s Mint on STEROIDS. I highly recommend it
Spring Cleaning Your Finances Tip 3: Take stock of your assets and adjust them.
Embrace investments if you haven’t already. Go to HR and review your assets. You should be saving in Roth IRA, IRA or 401(k). With a Roth you save with after-tax dollars, so, unlike with a regular 401(k), you won’t pay income taxes on withdrawals. That’s a good deal if you’ll be in a higher tax bracket at retirement, as is the case for many young investors
Spring Cleaning Your Finances Tip 4: See what’s on your credit report.
It’s important to pay off your credit cards. Next, Credit Karma allows you to view your credit score for free. A healthy credit score is above 650, and an exemplary score is over 700. Your score is important because it’s the first point of reference a lender has for your trustworthiness with money–and if someone is going to lend you the money to buy a house or go to graduate school, they’re going to want to know that you’re trustworthy.
Spring Cleaning Your Finances Tip 5: Make any necessary updates to your budget.
Not Having a Budget.
- Over half of Americans report that they don’t have a budget at all, and about 20% say they don’t have a good idea of how much they spend on housing, food, and entertainment.
What is budgeting?
- Budgeting Is the process of creating a plan to spend your money. Budgeting is simply balancing your expenses with your income.
Creating a spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do.
- Budget with Belle has an entire (free!) course on how to establish and implement an effective budget, working on our perfect budget breakdown: the 50/20/30 Rule.
- No more than 50% of your net income should go to essentials (rent, utilities, daily transportation, groceries),
- At least 20% should go to your financial priorities (emergency fund, retirement savings, debt repayment) and no more than
- 30% should go to your lifestyle choices (eating out, shopping, gym, travel, etc.)
Spring Cleaning Your Finances Tip 6: Decide what trips you take when the weather warms up and start planning accordingly.
A lot of times when we think about traveling internationally, the affordability factor always plays a role. International travel isn’t as expensive daunting as you may think. Well, your plane ticket usually is, but, with that in mind; you can travel internationally well under $1000! Lodging, food, and activities are on the lighter side of your budget.
Spring Cleaning Your Finances Tip 7: Finish paying off any debt from the holidays.
Many people say they feel like they’ve gotten a raise simply by knowing where their money is going—it’s like earning a couple hundred dollars right off the bat! That could be you, and it’s easier than you think using our free budget worksheet. There’s no better time to get started than right now.