Flowers are beginning to bloom. The sun is starting to peek out behind the gray winter clouds. And our thoughts are turning to spring, a time for new beginnings—and maybe dusting those cobwebs that have lingered in the corner of your bedroom for far too long.
But as you contemplate a spring cleaning of
your house, it’s also a good time for a deep cleanse for your finances.
Here are five ways to spring clean your finances this spring
Organize those documents
If you’re still holding on to decades-old
credit card bills, tax documents and bank statements, it’s time to find a
shredder. Here’s when you can recycle those old documents
- Income tax returns: You typically should keep these for seven years, according to the Internal Revenue Service.
- Other records: The Federal Trade Commission recommends that you shred credit card or utility bills as soon as you pay them. After a year, you also can recycle those bank statements, pay stubs and medical bills—unless an insurance dispute remains unresolved.
Once you’ve pared down your paperwork
collection, it’s time to get it in one place. You can invest in a fancy filing
system, but a three-ring binder where you can gather your documents will do.
the clutter and go digital
Now that your financial documents are in
order, you’ll want to keep them that way. To cut down on paperwork, consider
opting for paperless billing. Banks, credit card companies, utility providers
and other lenders typically offer the option. Instead of getting something in
the mail, you can pull up your statements at any time online.
Just be sure that you still have a way to keep
track of due dates when paper bills don’t arrive in your mailbox once a month.
This bill calendar from the Consumer
Financial Protection Bureau can help you track what’s due and when.
off your budget
Has this all-important document been gathering
dust since you made it? Now is the time to pull it out, dust it off and
determine if you’re on track. Are you spending too much or saving too little?
Was there an unexpected expense that threw you off? Or, did you get a raise or
tax return that means you can sock more away in your emergency fund?
Take a hard look to find out where you’ve been, so you can map out a solid strategy for the path forward. Don’t have a budget? Now is the perfect time to get started!
down your debt
Holding onto debt isn’t good for your
pocketbook—or your psyche. There’s no time like the present to determine how
much you really owe and make a plan to clear the balance. If you’re not sure
how you’ll ever be able to pay it all off, take action now. Contact your lender
or credit card company to learn about any alternative payment options or call a
credit counselor, such as those at CESI, to help you find a way out of debt.
for big purchases
What major expenses do you have planned this
year? Is a family vacation on the calendar? Do you need a new car for a more
reliable ride to work? Or, are you still paying off credit card debt from
holiday splurges and plan on the same level of giving this Christmas?
Whatever it is, determine how much money you
will need to cover those purchases and make plans now to sock away extra money
for them. You could even open a separate account to funnel that money into, so
it’s out of sight and out of mind—until you need it to pay for that summer
beach vacation or all those Christmas presents for the grandkids.
As they say, spring is a time for new beginnings—and not just outside, but in your home and with your finances. Make plans now to get both in order.
We’ve also prepared a fun Spring Cleaning for Your Finances Infographic to help you take on the little financial tasks you may have been avoiding.
If you are experiencing financial difficulty and are looking for a solution, non-profit credit counseling can help you make sense of all your options. Contact us today for a free financial assessment with one of our certified credit counselors.