With spring just around the corner, March 20th, 2019, “spring cleaning” is on many people’s minds. Spring cleaning can apply to more than just cleaning around your home. It can be applied to your personal finances as well. Here are 5 tips for spring cleaning your personal finances.
- Create/review your budget. If you don’t have a monthly budget, create one! The monthly budget is THE key to your financial success. You need to make a plan, follow it, and stick to it. Tell your money what to do instead of wondering where it went. If you already have a monthly budget, awesome! You should be reviewing your budget monthly because each month is different and reviewing it is how you find out how close you are to your limits for each category and which categories need adjusting.
- Close/Cancel unneeded subscriptions, memberships, etc… Do you have a monthly membership to a gym, streaming service, or club that you aren’t using? Cancel it. The monthly subscription costs can then get added to other categories in your budget or added to your debt elimination plan.
- Create your debt elimination plan. If you’re in debt, make a plan to pay everything off. Credit cards, car loans, student loans, everything. Debt robs the future you! When you don’t have debt payments, you have money in your bank account(s) and can make the most of your financial future. Make a list of your debts and develop your plan to pay them off. It may take you some time to pay everything off, but when you don’t have any payments going out, you have the freedom to spend all of your money however you want! Your budget is the key part to making your debt elimination plan a reality.
- Plan for big purchases. Make a plan for your larger purchases, whether they are for this year, next year, or 3 years from now. Create a category in your budget for these big ticket items and save for them and pay for them in cash. Many times you can get a discount just by paying cash. Plan for Christmas and pay for presents as you buy them, instead of having to pay off Christmas presents next January or February.
- Review your W-4 withholding. Did you get a big tax refund this year? That means you gave the government an interest free loan. Adjust your withholding so you get that money in each paycheck. If you have a tax bill, adjust your withholding so more comes out each paycheck so you don’t have a big tax bill due next spring. Your goal with withholding is to bring as much money home each paycheck without having to pay Uncle Sam when you file your taxes next year.
Have additional ways to spring clean your finances? Post them in the comments below!