Spring Cleaning Your Finances
Estimated reading time: 2.5 minutes
Spring has arrived. Birds are chirping, and the bees are buzzing. It’s time to shake off winter, tidy up, and get your home in order. Ready to spring clean your finances?
Let’s do this.
Give Your Budget a Sweep
Winter tends to be an indulgent time. Most of us overspend during the holidays and do whatever we need to get through winter. With the sun shining again, it’s a good time to shed some light on the old budget. Consistent budgeting can help you develop better spending habits, reach financial milestones, and keep track of where your money is going.
Declutter Your Spending
We all develop habits regarding how we spend money — sometimes that’s good, sometimes it’s not. Take stock of your spending habits and ditch the ones that aren’t serving you. A lot of expenditures seem small in the moment, but they add up quickly. Pro tip: start with your monthly subscriptions. If you’re like most people, there’s bound to be an app or a service you’re being billed for that you no longer use.
Wipe the Slate Clean
If you have debt, make a plan to get rid of it. Anything you’re not actively paying down is just accruing interest — it’s costing you money that you could be using for more exciting things, like a new investment or going on vacation. Get strategic about what you owe; consider techniques like a debt snowball or debt avalanche to pay down your debts faster.
Take an Inventory
Do you have any accounts that are just sitting there? Like an HSA you can’t use with your current health plan, or an old 401(k) from a previous employer? It’s easy for accounts to accumulate over time, but generally speaking it’s best to take a minimalist approach and just keep what you use. Having accounts that you don’t check in on leaves you at greater risk for things like identity theft, so ultimately, it’s easier to get rid of anything you’re not keeping track of.
Get Your Papers in Order
Even in an increasingly digital world, a lot of financial documents are still printed or sent through the mail. Sort through your documents and shred anything you don’t need. Many financial documents like medical bills, bank statements, receipts, and such, can be disposed of after three years. Loan records should be kept for seven years.
Put a Shine On Your Future
Now that you’ve taken a good look at your finances and put things in order, it’s time to plan for the future. How much have you invested in your retirement? Are you on track to meet your goals? Now is a good time to check in, reassess your goals, and adjust contributions to your retirement plan if need be. If you’re currently contributing to a Self-Directed IRA, you’re off to a great start.