How to Spring Clean Your Finances

Spring is in the air, and you likely have already developed the cleaning bug. While you are working on de-cluttering and deep cleaning your home, now is the perfect time to clean up your finances.

Re-Evaluate Your Budget

When was the last time you gave your budget a once-over? Budgets are not set in stone; they change just as your income and priorities do. If it has been awhile since you last updated your budget, now is a perfect time!

Go through all of the past years bank and credit card statements. Match your expenses to their appropriate categories and see if you still have a realistic budget. Are there any places that you could cut back? Maybe you need to increase some areas of your budget. Should you be contributing more to your savings or retirement accounts? Evaluate your spending and make the necessary changes.

Organize the Paperwork

If you don’t already, you need a filing system for your paperwork; the simpler, the better. Try making a file folder for each month of the year. All utility, phone, and cable bills go into the appropriate files according to the month they were paid in.

Once twelve months have passed, and you come to an entire folder from the previous year, you can sort through those documents and shred what you no longer need. Any copies that need to be kept longer can go into more permanent files, and this is a straightforward way to keep paperwork under control.

If you prefer to keep copies of your paid bills longer, you can make individual folders for each company or one yearly folder for all to stash away.

Make additional folders for documents that need to keep longer, such as bank statements, investment account statements, receipts, paycheck stubs, and tax returns.

Cut Expenses

Now that your financial documents are in working order and you clearly understand where you stand budget-wise, check for any bills that could potentially be lowered. Look at your phone, internet, and cable bills. Have any of these gone up in the past year? You can generally call your provider and lower these without compromising your current services.

Other expenses you may be able to cut back on are groceries, transportation, eating out, and clothes. There will undoubtedly be at least one area where you can cut your expenses.

While you are busy weeding unnecessary items out of your household, don’t forget to do the same for your finances! Updating your budget, organizing your filing system, and cutting back certain expenses will bring you a sense of relief. Your documents will be easy to find, and you can feel confident that you know exactly where your money is going.

Asks More Experts:

Jim from Bankrate recently wrote a guest post on CreditKarma covering the topic. He suggests, “Now is also a good time to review your credit. Get a free credit report from the credit bureaus via AnnualCreditReport.com and check for mistakes. Fix errors and make it a point to note which areas could use some improvement.”
We also asked a Reddit Personal Finance community we are a part of for their feedback. Their suggestions are below; click the link above for their total replies:

• Re-evaluate your insurance for home, disability, life, auto, etc., to ensure you have enough coverage and are taking advantage of any possible savings on your premiums.
• Review subscribed services such as Cable and Internet to find cheaper alternatives.
• Ensure you’re on track with your investment goals and adjust if necessary.
• Review your budget vs. spending over the last year and pinpoint areas to cut back.
• Scan the paperwork you need to save and pitch (shred) what you don’t need.
• Track your spending with an App like Mint,YNAB, Goodbudget, etc., to get a visual of your spending habits and see what areas can be reduced
• Calculate your Net Worth
• Replace the batteries in your smoke detectors once a year. (It’s cheap insurance!)