Five Ways to Spring Clean Your Finances

May 2, 2019 |

(From Financial Literacy Blog) – The grass is beginning to turn green, the birds are singing, and the snow is all gone – even up in Aroostook County! Since it’s starting to feel like winter is actually behind us, now is the perfect time to begin your spring cleaning. Don’t limit your efforts to yard work. Take this opportunity to organize your finances as well. Here are five ways to spring clean your finances:

  1. Shred Old Documents:  It’s easy to have your financial documents pile up over time. And when looking for some fiscal documentation that you actually need, it can often be buried among paperwork you simply don’t have to hold onto anymore. Check here to see how long you should be holding onto documents in their physical form. This could be the year you go paperless once and for all! As you’re going through your documents this spring, create digital copies of your important files, backing them up on an external hard drive. Once you have them saved away, feed the excess papers to the shredder.
  2. Check Your Credit:  Equifax, Experian, and TransUnion, the three main credit reporting agencies, allow you to request a free copy of your credit report once a year at AnnualCreditReport.com. Take some time to review your credit report each spring to ensure your score is in good standing. Reviewing each year can help you track your progress and determine any inaccuracies. Proactively checking in on your report is a great way to stay in control of your finances and progress your fiscal goals.
  3. Cancel Old Subscriptions and Memberships:  How many 30-day free trials have you signed up for and forgot to cancel? Are you going to the gym often enough to justify your monthly membership fee? Take a look at some of your recent credit union statements and figure out exactly what you’re paying for every month. The costs of television packages, magazines, and other subscriptions add up, and can become more costly than you anticipated. If you aren’t taking advantage of it, cancel it. If you still utilize the services, conduct some research to see if there are cheaper options or alternatives. If you still have cable, consider cutting the cord. By taking a few minutes to assess where your money is going, you can save yourself from spending more than you need.
  4. Increase Retirement Savings:  According to a report by the Center for Financial Services Innovation, 42% of adults aren’t saving for retirement at all. The average person should expect to require about 80% of their pre-retirement income to live comfortably after leaving the workforce. Now is the perfect time to switch things up. If you don’t know how much money you are  contributing or what your end goal amount should be, it might be time to re-evaluate your contribution, or seek guidance from a financial advisor. After you apply some spring cleaning to your finances, determine if the money you’ve saved can be applied to your retirement savings.
  5. Create a Budget:  Are you someone who typically looks at your account balance before making a purchase? Although it’s good to stay on top of your account totals, oftentimes, your balance is an unreliable way of determining what you can and can’t afford. Your account balance can’t communicate, for instance, how much money needs to be left untouched to pay your taxes this year or to repair your car. Get into the habit of referencing your budget instead of your account balance before spending your hard-earned money.