Ah, spring is FINALLY upon us! The daylight last longer…the plants are blooming AND if we’re honest enough to admit it, the effects of holiday (over)spending is beginning to take its toll.
BUT THERE’S HOPE!!
Spring has always symbolized a rebirth of sorts. Growing up, there were those lovely spring weekends when I was awaken at an ungodly hour to the sound of a vacuum cleaner and clanging dishes, to participate in the annual ritual known as ‘Spring Cleaning’(also known as: I-can’t-wait-until-I’m-old-enough-to-move-far-away-and-never-have-to-clean-another-baseboard-for-the-rest-of-my-life, ever).
Needless to say, this sacred ritual didn’t completely carry over into my adult life but I did manage to apply some of the lessons learned to help get rid of my financial clutter.
Evaluate Where You Are Financially
While the holiday season may seem long gone, the financial impact may last a lot longer than expected. The saying goes ‘it’s better to give than to receive’ and I half-heartedly agree. On the one hand, it’s great to see the expression on your family or friends’ face when you give them something that they appreciate – however the feeling of receiving the credit card bill at the end of the statement cycle (likely after the recipient has stopped using said gift) is one most would rather avoid.
As unfortunate as this may feel in the present, this is the perfect opportunity to take inventory of your financial position and avoid feeling the same way next year. If you carry a balance on your credit cards, figure out what it would take to have them paid by the end of the year.
In some cases, this might mean transferring the balance to a card that offers a lower APR for a specific amount of time. At the very least, coming face-to-face with your true financial picture can remove any uncertainty and set you on the right course for the rest of the year.
Revisit Your Budget
With nearly one-fourth of the year in the rear-view, this is a great time to revisit your budget and make adjustments. One tip that I have found useful when spring cleaning my budget was to make a list of the holidays, birthdays, weddings, etc. that I anticipated for the rest of the year, and set a dollar amount to spend on each.
This has helped avoid additional credit card debt and has also limited splurges as there are limits to what I can spend and I even take it a step further by paying cash.
If you’re looking for some online solutions to help get your budget on the right track I would recommend looking into Mint.com, You Need a Budget and Personal Capital. I only have experience with using mint.com but have heard great things about the other sites, as well.
Check Your Credit Report
Most of us don’t think twice about putting our credit card information online to make purchases and generally we’re pretty trusting of the companies where we physically use our cards. If we haven’t learned anything else over the past few years, we know that NO ONE is exempt from having their information compromised (looking at you Target).
Now is the perfect time to reach out to each of the three major credit bureaus to get a free copy of your credit report. I have used annualcreditreport.com in the past but there are other reputable sites that will provide the same information – just be sure that you are not paying a fee for the report.
If you find any errors or worse, fraudulent activity, reach out to the respective credit bureau in writing and dispute that validity of the item. You will also want to make sure that anything you send to them is sent as a certified letter – this will insure that you have a signed record that someone physically received your correspondence.
Simplify Your Finances
I think it’s safe to say that as a generation, we tend to be pretty tech savvy. With that said, there are several tools that allow us to lean on technology to simplify our finances. Switching to paperless delivery of statements and receipts is one step in the right direction.
Remember: Cash is King!
Using cash not only eliminates overspending (you can’t spend what you don’t have) but it also makes you really consider your purchases. There’s something about the emotional connection to parting with your hard-earned cash that doesn’t happen when you swipe a card.
The last tip for simplifying your finances is automation. Automate, automate, automate. This can be applied to everything from your retirement contributions at work to your monthly expenses. Automating eliminates the guess work and allows you to effortlessly save for the future while also ensuring that payments are received on time avoiding late fees and interest.
What are some of the tips that you use to ‘Spring Clean’ your finances? Let’s talk about it!