Spring cleaning is an opportunity to refresh and organize your home, office, or wardrobe among other things by maximizing the use of what you do have and clearing old clutter, often to make to way for new things.
Your finances are also something you shouldn’t pass up on a yearly Spring cleaning. As the year progresses, your financial situation will experience ups and downs and changes that can potentially block you from achieving your goals and hinder your growth if you don’t reorganize and clean out to accommodate.
Let’s look at some impactful ways to do a little Spring cleaning with your finances and ensure everything is in good order.
Update Your Budget According to Income and Changes
Maybe you got a raise this year with your job, perhaps your childcare expenses went up, or possibly you paid off a large loan; financial situations change throughout the year. It’s essential to update your budget to accommodate any changes in spending or cash inflow. An accurate budget is going to give you the best shot at saving money and achieving your financial goals.
Assess Your Debt
Debt can be a large part of your finances, and just as your income and spending will change over time, so will your debt situation. Make sure you know where your debt stands and what can be done to reduce your overall debt to income ratio. Regularly checking in on your debt and ensuring that you’re on the right track to pay off your outstanding loans is an excellent way to keep your finances healthy.
As the year progresses, goals that you previously set might have changed, or you may have accomplished some of them. Take the time to evaluate your financial goals and where they stand. Check off anything completed, remove goals that are no longer necessary, and make additions that can benefit your financial situation.
Check in on Your Savings
Your savings can be a good reflection of the overall health of your finances, and it’s vital that you look over the progress you’ve made in this area to ensure it’s appropriately maximized and growing. You may find that your savings have slowed down or stopped, which warrants some budget adjustments to get you back on the right track.
Look for Ways to Reduce Spending
When not monitored regularly, things like monthly bills, grocery shopping, gas, and other purchases can consume more of your budget than necessary. Utilize your budget to check into what you are regularly spending on and see where cut-backs can be made:
- Are you paying for unused subscription services that can be canceled?
- Where can you reduce utility usages, such as electric, heat, and water?
- Are you purchasing groceries that go unused and end up being tossed?
- Are you overpaying on your cell phone bill?
- How often are you dining out or buying coffee?
Say Bye to Harmful Habits
We all have bad financial habits that can stand to be eliminated. They often build up without us even noticing but can have some severe consequences for our budget if we don’t pay attention and improve our habits regularly. Reflect on what bad habits you can wipe clean from your budget. Some examples could be:
- Buying unnecessary items at the grocery store regularly
- Not paying bills on time and having to pay late fees
- Signing up for unnecessary subscription services
- Insisting on always buying name brand
- Always buying lunch instead of bringing it from home
- Frequenting your favorite coffee shop too much
- Driving aggressively and wasting gas
- Regularly paying out of network or area ATM fees