Spring is just around the corner (oh how thankful I am!). This week, we are diving into how you can spring clean some of the important areas of your life to get rid of clutter, freshen things up, and simplify your life. We are starting with spring cleaning your finances, and I think this is one of the most important annual habits to get into!
Of course, giving your finances a once-over doesn’t have to happen in the spring. If your habit is to do it in the fall or another time of year, that works just great too. The key is to make sure you are doing it annually, so your financial system can be maintained and work its best to build wealth for you!
Here are some ideas you can use to get started on spring cleaning your finances. Some may not apply to you, don’t worry, and just move on to the ones that do! By staying on top of your finances annually, it allows you to worry less and be confident in your financial plans.
Spring cleaning your finances!
Simplify your accounts
Review your bank accounts and credit card accounts and see if there are any you can close. Often we get in the habit of just “putting up with” having multiple accounts or moving money around because it seems like a hassle to close accounts.
Take the intentional time to consolidate multiple checking accounts into one so you can simplify your finances and not have to move money around.
If you have multiple credit cards, see if there are any that are not being used or earning rewards that are not important to you anymore. One note, make sure you don’t close your oldest credit card. That account is important for your credit score, so keep it open and being used!
Check on debt repayment progress
If you are focused on paying down debts, make a point to see where you are at on your progress. Take some time to calculate how much you have paid off this year, and identify which debts you are focusing on next.
Once you have done that, take a moment to celebrate! Paying off debt is a long, thankless, and lonely journey. It is important to take time to be proud of your accomplishments and celebrate to help keep you motivated on this path!
Pull a credit report and check for inaccurate information
There are 3 different credit agencies in the US and you are entitled to one free credit report from each agency every year. You can find all the information you need on the FTC website.
Take a moment and pull your credit report from one of the agencies. Look for any negative reports and see if you can identify any errors or credit accounts that you do not have or did not open. If there are any errors or fraud you found, take steps to report these accounts and have them removed.
Cancel unused subscriptions
Review your spending for the past couple of months and look for recurring charges that you don’t recognize or are not using in your daily life. Common sneaky subscriptions are gym memberships, meal prep kits, delivery subscriptions, in-app game charges, tv streaming services. Take a few moments to cancel the ones you are not using and enjoy the extra money you will be saving!
Set up sinking funds for your annual expenses
Sinking funds take the sting out of having to pay for large annual expenses, like insurance payments or annual subscriptions. Fund them with an automatic transfer monthly, and have peace of mind knowing you will not be blindsided in the future by these large bills.
Update monthly transfers
Look at all of your monthly transfers and see if they are still meeting your savings needs and going to the best-targeted savings account for your spending priorities right now. If you are saving for a goal, that is no longer a goal, then redirect that money to something you do want or another priority. Automating is great, but you still need to check on your transfers occasionally.
Review and refresh your budget
If you made a new budget at the start of the year, this is the perfect time to give it a little attention. Budgets never go completely to plan, so look for any areas you are consistently over or under and tweek those categories to match what is happening in the real world.
Price check new insurance
Insurance companies are always trying to get new customers, but many seem to put less effort into retaining their existing customers. Often they give you a sweet deal when you sign up, but then you face a huge increase when the policy renews. Shop around and get a few quotes to see if it would be worth it to you to make a change to save some money!
Check your money apps for balances
It seems like everyone uses a different money app these days. From Venmo, Paypal, and Zelle, I have a special folder on my phone to keep track of these. Many are apps I rarely use, so often I “find” money in them when I do go to use them. Check each one you have and see if there is money in it. If so, transfer it to your checking account and then put that money to work for you by transferring it towards a savings goal, extra debt repayment, or retirement savings.
Automate more of your financial life
These days, I can barely keep track of myself, much less my financial life! By automating everything I possibly can, I can free up that brain space for the other things I have to track.
Using bill pay, automatic payments, and automatic monthly transfers, you can ensure that your bills are paid timely, debt repayments are happening, and you are saving for your future without having to think about it daily. Take some time and see if there are any other payments or transfers you can set up automatically either through your bank or through the vendor’s website and take some extra stress off your shoulders!
Create a file storage system for important documents
Having secure access to your important documents is a critical step for anyone. Take some time to find and organize your important documents, and determine how you can store them so you can access them if needed, but they are secure.
- Vital paperwork like social security card and birth certificate
- Tax returns
- Purchase and sale documents for large purchases like cars or houses
Create a plan for a monthly money meeting
Don’t wait until spring cleaning next year to check in on your finances. Start a brief monthly money meeting to stay on top of your spending, debt repayment, and wealth-building goals. You can learn all about how to set up one of these meetings with yourself or with you and a partner here.
Don’t be overwhelmed
Finances can seem overwhelming and many people find it easier to just ignore them. That can seem easier at the moment, but in order to pay off debt and grow your wealth, you need to face your finances head-on and put them to work for you. This spring cleaning list can be a great start to getting a handle on your finances.
Remember, just because your finances may be struggling or are not where you would like them to be, doesn’t mean that you are failing, worthless, or bad with money. Finances are a learned skill and don’t have any relationship with your value or worth as a person.
Don’t beat yourself up over not having your finances in order. Take it one step at a time and make some plans to get started with controlling your own finances.
If you need some extra spring cleaning ideas, check back later this week to read about how you can spring clean your life and spring cleaning for your kitchen, pantry, and meal planning habits!
What financial spring cleaning do you like to do each year? I would love to hear more about it in the comments below or over on our Instagram page!
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