The blooming daffodils of your garden have signaled a fresh start. Yes, spring is here! Embrace the warm sunlight and get ready for a new beginning. The winter has already covered your home and finances with a layer of dust. Now, it’s time to scrub off the grime from both your home and finances.
So, how will you wipe out the thick layer of dust from your financial house?
‘Get organized’ - it sounds like a typical spring cleaning advice. Right? You should follow this piece of advice while you clean your finances in the springtime. Arrange all your important documents and keep them in one place , and toss out the ones that you no longer need. Keep your closet and drawers clutter-free so that, you can find out everything in its own place. ‘Staying organized’ also prevents you from making any impulsive purchase. Thus, it helps to save your money.
Besides your home, your finances need a fresh start too. It’s obvious that your financial condition has gone through a change in the past year. If you’re the main breadwinner in your family, then this is the time to update your budget. This’ll help you to find out the loopholes in your budget that you overlooked last year. Make a list of the things that you need to do first like paying off holiday debts, and so on. Revisit your budget at regular intervals and make the necessary changes to wipe out the extra expenses.
Read more: Master the art of budgeting: 8 Apps that make the task easy-peasy
A mistake in your credit report drags down your financial status. It hurts your credit score too. Your credit score is important everywhere starting from buying a house or a car to getting a job. So, if you have a poor credit score, then you might miss your dream job.
Go for a financial check up and ask the credit bureaus to provide you a copy of your credit report. Do you know that you can get one for free? Yes? Then why aren’t you using this opportunity? Check your credit report from the three credit bureaus, and point out any wrong information that is pulling your score down. Remember, a low credit score will make you less reliable financially.
You carry some responsibilities on your shoulder as the main money manager of your household. Your family always looks up to you financially. So, it’s your duty to look after the financial well-being of your family. God forbid, what will you do if anything wrong happens to you tomorrow? How will your family survive that difficult situation without money? Have you thought about it? No? Well, it’s high time that you should prepare an emergency fund for the rainy days.
Financial experts will always tell you to keep aside, at least, three months of living expenses, so that you have the time to cope up with the unpredictable, such as a job loss. The size of your emergency fund depends on certain factors like:
Keep all your financial details in one folder such as:
Share these financial details with the person who is capable of handling your finances well in your absence. This simple step will make your life easier in the case of any emergency.
Do you already have an emergency fund? If so, then you must try to save for at least six months of living expenses. If you still don’t have an emergency fund, then you must open an account immediately. Remember, “better late than never”.
Review the terms and conditions of your credit cards at regular intervals to make sure they’re still the same with what you’ve originally enrolled. Do you know, U.S. credit card issuers are bringing in EMV chip credit cards to put an end to credit card fraud? Get one for yourself now and keep the hackers away from your credit account.
If your house is covered by a plethora of statements and receipts, then shift to paperless transactions. This’ll make your life more simple and save the environment also. Go for:
Have you completed your financial spring cleaning? Yes? It’s good! But, have you checked each and every corner of your financial house? If not, then take a look at your finances all over again. Do a complete financial review this time and discover the loopholes, if any. You must review your insurance policies, annuity contracts, retirement plans, and educational savings accounts.
Have a talk with your current service providers and ask for better rates. Negotiate better prices and get discounts on home utility services and free up money to pay off your debts. For example, you can bargain with your cable, the Internet, and phone service providers for better rates.
Make a list of the debt you have to pay. At first, you might get a shock after knowing the total amount of debt you have to pay. Your tension would get reduced if you do it smartly. This spring, if you receive a tax refund, then use that money to pay off your high-interest credit card debt. You can also take out a personal loan to pay off balances if your financial condition demands.
According to the demands of the financial market, a financial advisor is capable of making the correct financial decisions. Even if you don’t have a huge income, a well-calculated investment plan can help you achieve your monetary goals. This is only possible with the advice of a financial expert, who knows the nitty-gritty of the financial market well. This spring make sure to find the right financial advisor for yourself.
A personal financial statement helps to keep track of an “individual’s financial status at a particular moment in time”. In order to manage your money well, you need to have a good understanding of your finances. Creating an annual personal financial statement will help you to track your assets, liabilities, and net worth every year. This is because spring coincides with the tax season and a personal financial statement will help you manage your finances efficiently.
"A nail is driven out by another nail. Habit is overcome by habit." - Desiderius Erasmus
Bad money habits will only put your financial health in danger. During this year’s financial spring cleaning, make an effort to erase your bad financial habits. Habits are hard to change! But remember, good financial habits will keep you economically fit and healthy.
Check out: 5 Secrets to save money by practicing good habits
If you are wondering what good financial habits you should adopt, then here goes the list for you:
Well, the list is never ending! These good financial habits will only make your Mr. Money breathe fresh air again.
Do you have any other financial spring cleaning ideas in your mind? If yes, then do share your thoughts with us.
A Happy Spring to all of you!