Springtime is an exciting period of growth and renewal, making it the perfect season to focus attention on your finances.
Following the tips below, you can not only tidy up your financial house but save money, too. Learn about decluttering, simplifying and refreshing your important money matters.
Air Out Your Budget
Chances are you’ve recently completed your annual tax return, or you will be very soon. With your income and tax expenses fresh in mind, it’s a great time to evaluate how well the money you work hard for is working for you in return. Here are some questions I’ve asked myself while evaluating my finances that you should be asking.
Did I recently receive a raise (or is it time to ask for one)?
Get paid what you’re worth, but don’t let yourself get caught up in lifestyle inflation by spending all of your additional income. Use it to pay off debt or invest it.
Have I increased my 401k contributions this year to match my salary increase?
One or two percent additional savings can make a big difference in your retirement years but is small enough now not to make a considerable change in your take-home pay.
Am I putting a percentage of my paycheck directly into a savings or an investment account?
You can maximize savings by paying into these accounts right when you get your paycheck.
Am I paying for subscriptions that I’m not using or for services I no longer need?
Maybe you don’t really need Hulu, Netflix and Amazon’s Fire TV Stick.
Can I pack my own lunch?
It might sound silly, but if you can pack your own lunch in lieu of eating out, the savings will add up quickly. Money saved can be used instead to eliminate debt and build an emergency fund.
Sweep Your Banks
When my husband and I got married, we owned more than eight savings and checking accounts combined at three different banks. Simplifying those accounts down to two banks, one brick and mortar and one online, helped streamline our finances.
Online banking offers many benefits, often paying higher interest rates on savings accounts and certificates of deposit. You might still need a brick and mortar institution, but probably not more than one.
Set up automatic bill pays to ensure you’re not late making proper payments. Further, to make sure you’re meeting your savings goals, create scheduled transfers of funds between accounts.
Dust Off Your Insurance Policies
Review your auto, home, life, disability and any other insurance policies. You should requote these for possible savings, especially on auto and home, as these are known to change frequently.
Add, subtract and modify policies based on household changes. Ask yourself such questions as: Did I add on to my home or pay off my car loan? Does it make sense to increase my deductible or secure additional life insurance now that I’ve welcomed my second child? While you’re at it, update beneficiary designations on life insurance if needed.
Finally, consider whether or not it is time for an umbrella policy to protect your increased net worth.
Polish Your Investments
Two years ago, I spent time rolling over old 401ks from long-ago jobs for both my husband and me. Dealing with just one brokerage account now saves us time and money.
Regardless of whether you’re consolidating old 401ks and unifying brokerage accounts or not, it’s important to re-evaluate your investments. Analyze fees being charged to your account(s) — you want to aim for far less than one percent — and rebalance your portfolio to match your age, risk tolerance and time until retirement
Clean Up Your Credit
You are entitled to a free credit report annually from each of the three leading consumer-reporting agencies: Equifax, Experian and TransUnion. You can obtain all three reports at once or stagger them throughout the year, receiving one every four months.
Once you have them, examine the reports. You’ll want to clean up any reporting errors, consider increasing credit limits to improve credit utilization and, if you won’t be applying for any new credit soon, freezing your credit might be a good idea to help protect against identity theft.
Declutter Your Documents
Organizing your financial documents and shredding what you no longer need is key to an uncluttered, money-savvy home life.
Start by determining what you need to hold onto, and which paperwork you can purge. Scan tax documents and necessary receipts, and file originals in a secure place. Shred all documents you no longer need before trashing.
In terms of security, update and safeguard passwords for your electronic files and mobile devices, keeping in mind that you can always use an online password manager such as LastPass or Dashlane to help you. Further, scan or make copies of the contents of your wallet in case of loss or theft. Organize critical family documents, too, such as birth certificates, passports, marriage and divorce papers and insurance policies, and keep backup copies in a separate and secure space.
Spring-cleaning your financial house now will set you up for organized and healthy finances all year long, saving you money, time and frustration later.
Click here to read more about ways to simplify (or streamline) your money life.