Spring is a season that is full of change, and excitement as the warm and beautiful summer months make their way back into our lives. Many people take the opportunity to clean out their homes in the spring season, after a long winter of staying inside.
While that is a good idea, it is also a great time to spring clean your finances, especially right after you file your income taxes for the year. Take some time out of your schedule to get your finances in order prior to summer so you can spend more time outside enjoying the weather and less time worrying about your bank accounts.
If you’re looking for where to start in order to spring clean your finances, the below tips should help.
Step One – Take an Overview
Before you can make any changes regarding your financial life, it helps to have a good picture of where you currently stand. If you don’t already do this on an ongoing basis, make a list of all of your various accounts and what they look like at the moment.
That includes bank accounts and any investments that you own, as well as any debts that you have to pay on a regular basis. Getting everything organized in front of you for an easy overview will help you understand what changes might need to be made.
Step Two – Cut the Fat
Do you have any budget leaks? Take a critical look at all of your regular and recurring payments to see if any of them are possibilities for a reduction or complete elimination. While you might not want to get rid of you cable TV service, for example, you could opt for a less-expensive package to save money every month.
Don’t just stop at the cable though, look at things like saving money on your cell phone bill, grocery spending and on down the line. The point here is to challenge all of your expenses to see where you can cut the fat. Please also remember this isn’t something to save only for spring cleaning but should be done on a regular basis.
Step Three – Set New Saving Goals
With your overview taken and some of your unnecessary expenses gone, you can now turn your attention to saving goals for the months ahead. Try to settle on a dollar amount that you hope to move into savings each month above and beyond what you need for your regular budget.
Even if this savings amount is modest, it will help to be able to put something away month after month. Hopefully, as time goes by, you will be able to increase that amount gradually until you have a nice little nest egg put away for later.
Step Four – Automate the Process
Now would also be a good time to get all of your payments on auto-pay so you don’t accidentally get behind on any of your bills. Almost all of your payments should be eligible for some kind of auto-pay system, which can be a great time saver and can also save you stress knowing you aren’t forgetting to make any of your payments.
You still want to monitor your bank account regularly to make sure the payments are coming out for the right amounts and that no unauthorized activity is taking place. My favorite tool to do this is Personal Capital. What I love about Personal Capital is that it’s completely free and allows you to keep track of your spending as well as manage your investments.
What do you do when you spring clean your finances? Do you like to automate your finances as much as possible? What expense are you going to challenge over the next few months?
Photo courtesy of: DebMomOf3