With the holidays behind us and spring in the air, you should take this opportunity to re-evaluate your finances and give them a good spring cleaning. For those of us who tend to leave things messy year-round, April offers consumers a great time to take an in-depth look at their financial picture, streamline it and making things easier to understand and manage. To get started, consider implementing these strategies:
1. Get organized. If you typically use the shoebox method of financial management, it's time to upgrade your strategy. Put together a basic filing system for your documents. Include monthly bills, tax return copies and credit card and investment account statements. When tax time rolls around, you'll be prepared--and if you need to access an old statement or research a possible error, you'll know where to find it.
2. Review all bills for hidden fees. Due to the recession, many companies have introduced new and often exhausting fees to the American consumer. A host of banks, credit card companies and insurance providers have modified their terms and conditions to allow for steep fees should you break even the most insignificant rules. Review your monthly bills to see if any strange fees have been charged and call the billing department immediately to get them removed.
3. Scope out the competition. Make sure you're paying as little as possible for monthly services like cable TV, Internet or cell phone plan. Consumers have options in this economy and introductory teaser deals are readily available. If you do make a switch, try to avoid signing a long-term contract, which can make it tougher to jump ship should you find something better down the road.
4. Look for simple fixes to your money leaks. Like rusty pipes, disorganized finances can develop leaks. If you have a flex spending account for your health insurance, make sure you don't leave any money on the table at the end of the year. If you rent a storage unit for all that "stuff" you never use, clean it out, sell what you can and donate the rest. If you have unused gift cards lying around, use them or sell them on a website such as Plastic Jungle.
5. Streamline charitable giving. Budget your charitable giving. Set an annual limit for your giving and stick to it. Pick the two or three charities most important to you and make your donation once a year. If you limit yourself to an annual contribution, you can justify resisting those "impulse donations" you feel the urge to make when you're cold-called by a charity.
Final thoughts. Effectively managing your finances can seem difficult and time-consuming, but like any maintenance project, the reward justifies the effort. Once you've set up a well-organized system, sustain it. Add monthly statements and new obligations to your files as they come in, so when you file your taxes or audit yourself, it will be a breeze.
How organized are your finances?
David Bakke is a featured contributor for the personal finance resource, MoneyCrashers.com. The site features advice for money management, home improvement and even tips for spring cleaning your house.
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