Spring is the perfect time for cleaning out the clutter in your life and giving your space a fresh start. Your finances are no exception. A financial spring cleaning can help declutter your budget, reduce debt, and set you up for financial success.
Go through your statements and look for any recurring charges you no longer need or want. Things like unused streaming services, gym memberships, credit cards with annual fees, etc. Cancel them. Not only will you save that money each month, but you’ll simplify your budget.
Review your debts and make a plan to pay them off. List all your debts from highest to lowest interest rate. Pay off high-interest debts first while making minimum payments on the rest. Once the first debt is paid, roll that payment into the next debt. This snowball effect will help you gain momentum and stay motivated.
Shred or securely delete old financial documents you no longer need. Things like old bank statements, tax returns, investment records, etc. Check with your state regulations on document retention before shredding. Keep anything related to your current taxes or investment portfolio.
Consolidate accounts when possible. If you have multiple bank accounts, investment accounts or credit cards with different institutions, consider consolidating them to simplify your financial life. Make sure any fees or interest rates on new accounts are lower than what you currently have.
Meet with your financial advisor. If you work with a financial advisor, schedule a meeting to review your investment allocations and financial plan. Rebalance your portfolio if needed and make sure your financial goals and timelines are still realistic and on track. Get advice on any other ways to improve your financial well-being.
Revisit your budget and make sure your spending aligns with your financial goals. Look for expenses that have increased and see if you can cut back. Also look for ways to increase your income, whether through a job change, promotion, or developing additional revenue streams. Update your budget to reflect any changes.
Check your credit report for any errors. Request a free credit report and check for any signs of fraud or identity theft. Look for any errors on the report as well and dispute them. Good credit is important for so many financial areas of your life, so monitoring your credit regularly is key.
Make a financial action plan for the next few months. Having concrete goals and timelines will keep you accountable. Things like paying off a certain amount of debt, increasing your retirement contributions, saving a larger portion of your income, etc. Review and revise the plan as needed to keep you on track.
Celebrate your wins, big and small. As you work through decluttering your finances, be sure to reward yourself for milestones achieved. Staying motivated and positive will help you continue your success. A financial spring cleaning can do wonders for your financial and mental well-being. Stick with it and enjoy the fresh start!