It’s officially Spring and with the season comes spring cleaning. While I’m starting a little late this year, it feels good to get my house cleaned up and organized after the long winter. What many people might not think of is doing the same with finances…and it’s important because things change. Here are 4 tips to help you spring clean your finances:
Ditch your debt / pay it down faster
To save you the most money, start with credit cards or other loans with the highest interest rate. Make higher than the minimum or extra payments to pay it off faster. Or if you need more wiggle room in your budget faster, start with the lowest balance and pay extra to get rid of that debt sooner. Once you’ve paid off the debt of choice, put that payment toward the next highest interest or lowest balance – again, depending on your goal. Another great option is the Debt Management Plan as it will help you pay off debt faster and save money.
Update your budget
Our income, how much we spend, and what we spend our money on can change a lot and sometimes it happens overnight. So compare your income and expenses again to see what your current spending plan looks like. And don’t forget to include those pesky periodic expenses that are forgettable because they’re once or twice a year – like vehicle tabs/maintenance, annual memberships, vet bills, etc. Once you’ve updated, cleaned up, or created your realistic budget, determine what you can save each month. If you haven’t done so in the past, start now and make it automatic. Try to set aside a certain amount every month automatically deposited in a separate savings account specifically for emergencies.
Go paperless, automate, and unsubscribe
If you are still getting any bills in the mail, consider switching to paperless where you receive the bills via email. Then set up automatic payments as long as it’s realistic for you. That will keep mail/clutter from coming into your house so you don’t have to worry about shredding or filing paperwork. Going paperless is great, but are you still receiving a lot of emails you don’t really need from store after store? Go through those store emails and unsubscribe from what you really don’t need. If you save a lot of money by using coupons from one particular place, great. But remember just because it’s on sale doesn’t mean it’s saving you money if you don’t really need it. So ditch those emails that truly aren’t saving you money.
Clean and organize
If you’re still keeping paper documents, shred what you don’t need. Organize what you keep and consider ditching paper if you are able to instead save the documents electronically. Typically it’s a good move to keep pay stubs for a year. However, you may be lucky like me and have all your pay stubs saved online through your employer. I don’t have any paper pay stubs in my house because of it. And it’s great because I hate getting a lot of mail and having to file or shred things. Regarding tax documents, it’s recommended to save them for about 3 years. So if that’s the one file you have to keep, that’s not bad.
So get started now to get your finances in order. If creating a budget seems a little daunting, the good news is there is free and trusted help out there. LSS Financial Counseling is a MN nonprofit that offers free budget, credit, and debt counseling to anyone. Give us a call today at 888.577.2227 for your free session or get started online at any time of the day.
Author Elaina Johannessen is a Program Director with LSS Financial Counseling.