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Spring Clean Your Finances

Spring is an opportune time to tidy up your finances, eliminate unnecessary clutter, and commence anew. Whether you need to adjust your budget to have more money at the end of the month, reassess automatic expenses, or curb excessive credit card spending, consider these seven recommendations to gain better control of your finances this season.

1. Clean Up Your Spending

Whether you refer to it as a budget or a spending plan, it is only necessary to look back on the past few months and record your recurring bills and expenses. Assign a priority number between one and three to these expenses, with one indicating bills that are crucial to avoiding eviction and three representing non-essential expenditures. Eliminate or significantly reduce your level three expenses. For instance, consider cancelling your $75 cable bill and opting for cheaper streaming services instead.

2. Clear the Decks and Put Your Savings on Autopilot

The money you saved by disconnecting your cable service can be automatically sent to your emergency fund. Without at least six months' worth of expenses covered in your emergency fund, you may be only a paycheck or two away from potential financial disaster.

3. Review Your Tax Withholding

Anticipating a sizable tax refund this year may seem exciting, but in reality, you've given the U.S. Government a 12-month interest-free loan. Consider adjusting your withholding to achieve a better balance, and use the extra money as an upfront monthly paycheck increase. Redirect these additional funds into savings or another investment plan to benefit yourself instead.

4. Inventory Your Material Wealth

Allocate an hour or two to take photos and create a record of your household belongings, focusing on high-value items such as furniture and costly electronics. Note down the estimated purchase price and date of each item. Whenever you buy new things, keep the receipts and revise your inventory accordingly.

5. Check Into Your Renter or Home-Owner Insurance

As part of your spring cleaning, it's important to conduct a thorough check-up of your insurance coverage. Take the time to review your insurance policies and carefully read the details. Is your coverage sufficient to replace all the items you listed in the household inventory you created? Keep in mind that replacement costs have increased in recent years, particularly for homeowners. It's important to ensure that you have adequate coverage.

Additionally, it may be worthwhile to assess your life insurance and consider increasing your coverage, particularly if your family has grown or your income has increased.

6. Plug Into Technology

Take advantage of the free and secure technology available on your online banking platform to help you stay on track. Many banking websites offer settings that can automate tasks you might neglect to do for yourself. For example, you can set up alerts to notify you via email or text message when your account balance falls below a certain threshold or your credit card spending exceeds a specified amount.

7. Get Your Paper Files in Order

To keep track of important financial documents, create an organized filing system. If you prefer a simple method, purchase an expandable folder with tabs for each month. Place the papers you typically discard each month in the corresponding tab.

Don't forget that poor financial habits often stem from neglect and making passive spending decisions. Use spring as an opportunity to take control and reassess your overall financial situation. Clear out any clutter and eliminate what isn't benefiting you.