Spring Clean Your Finances
Nothing’s better than those first few nice days of spring, when you can finally throw open the windows and get some fresh air. (If you live in Wisconsin like I do, those windows are once again closed because it is snowing in the middle of April…ugh!) Either way, spring is a great time to clear out the clutter and get ready for some very productive summer months. Here are seven ways to spring clean your finances:
- Review your credit card statements. We all know how easy it is to start accumulating charges on our credit cards. Maybe it was a free trial that has now ended. Maybe it was a subscription you felt would be helpful but you haven’t looked at it in two months. Maybe it was that gym membership you started in January and no longer use. Take a quick look at all the automatic charges on your card and assess the value. If you are still using the items you’re paying for, keep them going. If you aren’t using them, take five minutes to cancel and save yourself a few dollars every month.
- Bolster your emergency fund. It is common to deplete your savings during the holidays or the spring break vacation you just took. Take a moment to make sure your savings account balance is where you would like it and if not, come up with a plan to refill that bucket in the next four months.
- Increase your 401(k) contribution by 1%. Each year, when it is benefit enrollment time at work, we take a look at our 401(k) contributions, but then we tend to forget about them. It is time to dust off that statement. Does the account need to be rebalanced? Are the investments you are in still appropriate for your risk tolerance and retirement goals? Beyond that, I would like to challenge you to increase your contribution by 1%. The change is small enough that you most likely won’t notice, but over the long term could have an impact on your retirement lifestyle.
- Make a date with the shredder. As “virtual” as our world may seem, I still accumulate a lot of paper, from statements to receipts and healthcare visit summaries. These papers contain confidential information and shouldn’t be casually stored or tossed in the trash. During spring, take advantage of any local shredding events. Many banks or financial institutions will offer a shredding day to safely take care of your confidential information.
- Adjust your tax withholdings. Another tax return season has come and gone, so it is the perfect time to set yourself up for success in 2023. Did you receive a large refund or have to pay a large amount? Review your anticipated income for 2023 and make any adjustments to your tax withholdings now to help you avoid any large surprises next year.
- Check your credit score. You can check your credit score once a year for free at all three major credit bureaus. You can submit your request at annualcreditreport.com. Once you receive the report, review it for completeness and accuracy. You should immediately look into any past due bills or accounts that you feel are not accurate because this could be a flag for identity theft.
- Re-forecast your budget. Did you make an annual budget at the beginning of the year? Life happens, so now is the time to dust off that budget and re-forecast the rest of 2023. Take your spending year-to-date and add your anticipated spending for the remainder of the year. Compare this total to your original budgeted amount. Evaluate any large swings and adjust if needed. This is not a time for judgment; rather, it is time to take a clean look at your financial situation and figure out what a successful financial plan should look like for the rest of the year.
Spring cleaning your finances is an opportunity to make some small changes to help you continue on the path to your ideal financial future. Plus, you can get rid of any cobwebs hiding in the corners!