Tips for Financial Spring Cleaning
You’ve spruced up your home, but what about your finances? You should try to assess your financial state annually, at the very least, to keep your peace of mind. Spring is the perfect time to not only get your house in order, but to make certain that your financial goals are staying on track.
Look at Your Budget
One of the first steps toward your spring financial overhaul is to look at your overall budget. Did you get a raise or change jobs, which led to an increase or decrease in income? If you have, have you factored that into your budget? Do you have any new bills you need to add? Have you increased or decreased your monthly savings to correlate? If you have not yet made a monthly budget, it’s time to do so. Start by determining your net income. How much is left over? What percentage of this will you be putting away into your savings? Once this is established, you have a basic budget.
What Are Your Goals?
Developing and tweaking goals goes hand in hand with monitoring our budgets. Think about your goals in terms of this particular spring cleaning, but also your long-term financial objectives. What do you want to accomplish by the end of your cleaning session? Do you want your taxes to be organized? Do you need to sort through and manage your expenses? Are you unsure of your credit score, or do you want to improve it? Set some limits so you don’t become overwhelmed with stress and chaos before you start.
It is also prudent to think of your long-term goals. How much do you want to have by retirement? How much do you need to save monthly and yearly to make that happen? Do you have a vacation or some other sizeable expense you would like to save for? Plan out how you can make these goals happen.
One of life’s biggest stressors is debt and its management. In a perfect world, all of our savings would outweigh our debts. If you are trying to eliminate or reduce your debts, it’s a good idea to start with the smallest balance first. While you may want to tackle your largest, seeing balances disappear more quickly can be motivating and help keep you on track. However, if you have large debt in multiple channels, aim for the debt with the highest interest rate to save the most money over time.
You may want to negotiate a new interest rate on your credit card. If you are in a good position with your current credit company, you may be able to talk them into a lower rate based on your past relationship and current standing. Don’t hesitate to tell your company that you will go with another if it means getting a better rate. Often, they will do what they can to keep a customer.
Check Your Credit
It may be easily overlooked, but you should be examining your credit score yearly. Thankfully, many banks and credit companies do a good job of monitoring for fraud, but it is always safest to check your credit score yourself. There may also be a mistake that needs to be addressed, and letting it go unresolved may compound matters later. Dispute any errors, so that they do not affect your overall standing.
If you are looking to improve your score, start by making sure all of your payments are on time. If that means you need to make adjustments in your budget, do so. We rely on our credit scores for many things, including housing and potential loans for large purchases. Keep your score tidy to have access to what you need, when you need it.
To avoid financial stressors, it’s best to keep on top of your budget and fiscal state. Have clearly defined goals and make sure your credit score is stable. It won’t take long to do, and you will feel so much more secure once it’s done.
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