Some of the clutter and chaos in our lives we don’t have control of but, we can de-clutter our financial lives. You know how good you feel after a good spring-cleaning of your closet when everything is thrown out, donated or organized? We have five tips to help spring clean your finances.
- Spending Plan – If you are like me you hate the word “budget!” It feels like we have somehow given up control and don’t have choices. So, let’s create a spending plan and feel empowered. There is a lot of psychology at play when dealing with money. Work to be conscious of spending habits. Personally, for my plan to work I need to tweak it quarterly. Take a few hours and go over your spending habits. Are there areas that you could save a little on or is there an expense that you have underestimated? With the dry winter weather my hunt for the perfect moisturizer and face oil has dinged my budget. Having my “plan” helps me be mindful. I am competitive so I like to “win” over my spending plan. That means coming in under my spending plan.
- Consolidate Accounts – get rid of unused accounts and toss dusty, old checks and statements. If you have several retirement accounts from old employers now is the time to consolidate them into one account. You will have a better asset allocation with less replication of the same products in multiple accounts. Also, having your money in one retirement account could increase the service you receive from that institution. Customers with larger balances/accounts receive a different level of service.
- Go Paperless – Getting rid of monthly “paper bills” that come to you through the mail that you pay on line or through automatic debit is a painless way to organize and declutter your financial life. Make the time to do it now!
- Check Your Withholding – If you get a large refund from Uncle Sam every year adjust your withholding to match the taxes you need to pay. You don’t want to give Uncle Sam interest free use of your money for months.
- Review Your Insurance Policies – Most of us have either “homeowners” or “renters” insurance. It’s time to do two things: a) Photograph your possessions so you have digital documentation, b) get an up to date estimate of replacement cost if everything is lost. Rebuilding is expensive. Take a look at life insurance policies and determine if you are adequately covered. There may have been a life event, like a new baby, that would require a reassessment of your coverage.
We hope your spring cleaning goes well and you feel empowered to keep on top of the clutter and chaos in your life.