After a long, hard winter that seemed to go on forever, it seems that spring has finally arrived. Spring is a time of renewal and many take this time to clean their house from top to bottom. It’s a good idea to clean house and this includes finding ways to freshen up your finances.
- Start with your budget. If you don’t already have one, sit down and make one. How can you expect to freshen up your finances if you don’t even know where your money is going? There are plenty of free online tools that can really help you set up your budget and keep track of your household expenses. Take advantage of these. While you are setting up your budget, make sure you take into account any major changes that have occurred in your life over the last year. For example, did you get married or have a new baby?
- Review your financial statements. Take this time to sort through all of your account statements. This includes statements from your bank, insurance company, etc. Look for any extra fees that you weren’t aware you were paying. Also, consider any ways you can save money with each of these accounts. For example, you can often save money if you bundle some of your services such as television and internet or phone. What better way to freshen your finances than to find some savings?
- Opt for e-bills wherever possible. Bills and other pieces of mail can have a tendency to pile up if you don’t stay on top of it. One quick way to combat this clutter is to opt for e-bills wherever they are offered. Instead of getting the bills through the mail, you will simply receive an email containing your bill information. Companies offering e-bills often have an option to pay automatically as well. If it is set up automatically, there won’t be any late charges either. This seemingly small step is a great way to freshen up your finances, especially for those bills that do not vary from month to month. In addition to reducing the amount of clutter in your house, this can also reduce the chances of having your identity stolen.
- Check your credit score. This is really important if you want to freshen up your finances. If you haven’t checked your credit score in awhile, it is important to do so on a regular basis. You can now obtain a free annual credit report from each of the three credit reporting agencies. It is free so there is no reason not to do so. More importantly, you need to know where you stand. You also need to make sure your credit report is accurate. Are all the accounts listed yours? You need to go through each report carefully and look for any mistakes or inaccurate information. After all, your credit score will help determine the credit offers available to you and the rates you are offered. Lower rates mean more savings for you. This can add up to hundreds or thousands of dollars over the course of a car loan or the mortgage on your house.
- Pay down debt. This is a huge step if you really want to freshen up your finances. Any debt that you are carrying over month to month is costing you money in interest. The longer it takes you to pay off a debt, the more that debt is costing you. Therefore, it makes sense to pay off any debt you can as fast as you can. Making just the minimum payment on your credit cards each month is a bad idea. Resolve to pay more than just the minimum. Even if you cannot pay off the balance in full each month, it really helps to at least pay more than the minimum. This will help you in two ways. First it will cost you less in interest over the long run. Also, paying down your credit card balances lowers your credit utilization and this helps your credit score.
- Start building an emergency fund. You never know when something unexpected will happen. Your car might break down or your hot water heater might go out. It could be anything and you need to be prepared for these unexpected emergencies. In general, it is a good idea to set aside about three months worth of expenses. Having this emergency fund available if something goes wrong can go a long way in giving you peace of mind. What better way to freshen up your finances than giving yourself a little peace of mind?
With spring in the air, go ahead and take this opportunity to freshen up your finances. You’ll be more organized, feel less stress and have less clutter in your home. Plus, you’re bound to find some savings in the process.