Spring cleaning your home is probably not new to you. You declutter the garage, clean windows, wipe down baseboards, clear out your basement, and more. But, what about your finances? It pays to spend some time spring cleaning your finances too. Below are seven ways to get your finances in order.
1. Organize Your Financial Records
One of the first things to do when you organize your finances is to gather together all your information in one place. Certain things you'll want to consider in this financial inventory include:
- Financial accounts
- Credit reports
- Monthly statements
- Debit and credit card details
- HSA and retirement accounts
- Legal documents
- Insurance agreements
- Other investment statements
If storing this information digitally, it’s a good idea to create a folder on your desktop where you can find and store your financial documents easily. Be sure to keep a hardcopy of your passwords and usernames for all financial accounts. Should something ever happen to you, your partner or another relative will be able to access your files. Keep this document in a secure place.
2. Set Up a Budget
Go over your spending habits from the last several months, or, preferably, year. Look for any improvement areas, whether in the saving or expense departments. Are there areas you can cut back on your spending? Did you allocate too much money in one place and not enough in another?
This is the time to set up a budget — or review one you currently have in place. Consistently follow this realistic but effective budget to keep you on track for the months and years ahead.
3. Review Your Expenses
Really dive in and review your expenses to find areas where you can cut back or reap discounts. Make phone calls to service providers, such as your insurance agency and cable provider, for example, and see if there are any discounts available. Go through each, one-by-one, to see where you can potentially save.
4. Review Current Loans
Loans typically make up your largest monthly expenses. However, they also offer the best opportunity to save more each month. Consider switching your loans to the credit union. By refinancing, you could take advantage of lower interest rates and reduce your monthly payments, as well as pay less interest over the life of your loans.
You might also want to perform an interest rate review. First, review the interest rates you’re currently paying on your loans – compare these with the credit union’s offers to see where you could save. Then, analyze the yields you’re receiving on your savings and investment accounts with our current yields. Both loans and investments are a great way to save and earn more money.
5. Automate Your Savings
One of the easiest and most effective ways to increase your savings is by putting it on autopilot. As a credit union member, you have access to tools, such as Payroll Deduction and Automatic Transfers to help you accomplish this task.
Using these services, you’re able to specify a certain amount of money to transfer into your savings each month automatically – either on a specific day or when you receive your paycheck. By automating, saving becomes a turnkey process, and soon you won’t even realize money is coming out of your paycheck.
6. Review Retirement and Investment Accounts
At least once per year, or more frequently if possible, review your retirement and investment accounts. Do they need rebalancing? Can you afford to increase contributions? If you have children, have you set up their college funds? Consider working with a financial advisor to help you create a comprehensive retirement plan for you and your spouse.
7. Set Financial Goals
While this is last on this list, it’s by no means less important. Set up both short-term and long-term financial goals. Financial goal setting is a key step to becoming financially secure. If you’re new to setting financial goals or often struggle to stay on track, begin with smaller goals. Doing so can help you build confidence and assist in finding the right system that works for you.
We’re Here to Help!
The beginning of the year is a great time to take action to get your financial house in order. Whether that means streamlining expense payments, setting up automatic savings deposits, or refinancing your loans, we’re ready to answer all your questions and help you save.
To learn more, give us a call at 202-479-2270 or email us at firstname.lastname@example.org.
Are you planning on doing a financial spring cleaning? Tell us about in the comments!