Cleaning out the garage, washing walls and vacuuming under the bed might be on the spring cleaning checklist at your house. But don’t forget about your finances. Spring is an excellent time to make sure they are in order.
- review goals
- evaluate the budget
- get rid of credit card debt
- get simple systems in place for bill payment
- profit from your household spring cleaning
- treat savings as optional
- forget to review your credit reports
- neglect insurance
- assume you are getting the best deal at your financial institution
- depend on yourself to pay all bills on time
Good financial planning and budget rely on goal-setting. Spring is a great time to review and revise goals. Some goals will be long-term (saving for retirement or a child’s education), and some will be short-term (saving for an outfit or having time to take a daily walk).
Based on the goals you defined, review and refine your budget and savings. If you don’t already have a budget, it’s time to create one. Budgeting can be simple: use a spreadsheet, pencil and paper, or budget software (much available free online).
Paying off credit card debt at typical interest rates effectively makes an investment that returns 20 percent or more per year. Make a plan for paying it off yourself, or if you need help, contact
Doing so will help you avoid interest charges and late fees, and save time and money. Open all mail – including every bill – as soon as it arrives. Deposit cash or checks as you receive the money. Write checks immediately upon bill receipt (and subtract the amount from the check register), then put the mailing date on the envelope. Place the envelope in a visible place (a folder on your desk, a basket on the kitchen counter, an online calendar, etc.) so you mail it on time. If paying online, see if you can schedule a date for payment.
Earn some revenue from your work cleaning out closets, the basement and garage. Organize unneeded items, and then donate (keep receipts for tax purposes), and then sell what you can – via an online site such as eBay or Craigslist, or a yard sale. Save the proceeds.
Instead, treat it as a mandatory expense, and set up self-billing. Your bank or credit union may offer automatic withdrawal from a checking to a savings account. Employers may offer automatic deposit into a savings accounts.
Everyone should review his or her credit report at least yearly, if not more often. If you’ve not done it yet this year, now is the time. You can get your credit report once a year for free (www.annualcreditreport.com or 877-322-8228). Read it carefully, and correct any errors.
It’s a good idea to check policies once a year for needed updates and to make sure you are getting the best rates.
While many banks and credit unions have been offering very low rates the past few years, you may find higher returns by comparison shopping online. If your savings are mounting up, consider transferring some to a safe savings vehicle, such as a certificate of deposit or bond investment. It may be time to talk with a financial advisor for more input.
Look into automatic-pay options, including online bill payment (often offered free today at consumers’ banks or credit unions) and automatic deduction plans for monthly bills such as phone, utility or rent. Some lenders and utility companies even will provide a reduced interest rate or other rebate for use of their automated payment services.
Taking these steps will help get your financial house in order and make sure you are on the path toward achieving your goals.