People love to save money by developing new habits and resolutions for the New Year, but you can clean out old habits and create new ones any time of year! You don’t have to wait for January to start creating an amazing financial future. With Spring in the air, take a moment to give your finances a little spring cleaning and follow simple steps to get your financial game in check.
Spring Cleaning Finances: What Not to Do
It’s easy to get lost in the spending, tracking, and taxes this time of year, right? Just like the essential tips and tricks for regular spring cleaning, there are basic guidelines for financial spring cleaning. Here’s what not to do while picking up your finances.
Don’t Close Credit Accounts
Even though it may feel counterintuitive to leave a credit account open that you no longer use, I am here to say this: Don’t close out credit cards! Going over your credit limit can be stressful, and spending money on your credit card also keeps your mindless spending out of sight and out of mind, it’s hard to stay on top of your spending that way. Many of my clients want to celebrate paying off a card by closing it out completely. What you may not realize is that this can hurt your credit – not help it. Closing a card could cause your credit to go down; It reduces how much available credit you have and that could negatively impact your overall Credit Utilization. Also, closing a card won’t fix your over spending problem, only conscious decision making will do that.
By cleaning up your credit cards and credit history, you will start to feel that fresh start feeling. Do this instead:
- Start by tracking what you are being paid each pay check.
- After bills are paid from your paycheck, what’s left? This is the money you have to spend that pay period. Challenge yourself to only spend what you have.
- Put the cards on ice! Literally, put them on ice. Place your credit cards in a plastic baggie and fill her up with water. Stick that sucker in the freezer, it will be much harder to use your cards if you have to thaw them out first!
Don’t Splurge the Tax Refund
Even though you may want to, don’t splurge with your tax refund. Tax refunds usually come to us every spring and we all know it’s exciting to get that extra money. But taking some time to plan, save, and track that money could be the ticket you need to actually feel on top of your finances this year. Taking care of important bills and debt should be first, but don’t forget to celebrate your financial wins along the way! Here’s my spring cleaning tip: chunk out your tax refund by 20/40/40. Put 40% of your tax refund in savings, take 40% of the refund and pay off a credit card and give yourself 20% to spend – buy that home decor you’ve been wanting, or the new yoga pants for that spring bod. This is a healthy and balanced way to plan your money.
Spring Cleaning To Do’s: Getting Organized
Just like spring cleaning your house, getting organized is the key to success! Following simple steps will help you make better moves with your money this season and all year long.
- Take a Financial Inventory
The best thing to do to start to feel like you have your money under control is to have all of your documents in one place. Think about credit reports, bank accounts, bank statements, debt, count your credit cards, credit limits, and current credit usage, and other investments you’ve made along the way. Keep track of everything in a single folder and/or spreadsheets so you can see everything at once. This could be an eye-opening experience, but it’s okay – you got this! (And I’m here to cheer you on)
- Manage Bad Spending Habits
We waste a lot of money without even realizing it because we’re avoiding our money or just doing what feels good in the moment. In the long run, those purchases could be preventing us from enjoying the bigger financial investments – like buying a home or going on vacation! While you’re looking at the little things, take a look at all those small monthly service charges too – do you need Netflix, DirectTV, Amazon, Hulu, and HBO?? Hmmmmm? Take a closer look so you know what you’re actually spending your hard earned money on each month. By trimming the spending fat, you will gain Financial Growth.
- Toss Out Unnecessary Debt
Staying in debt can feel an awful lot like holding on to those old pairs of jeans you haven’t worn in five years. It’s holding you back, dragging you down, and taking up room that you can use for better jeans! Holding onto old debt can make it hard to move forward and start fresh. Setting up a plan to get rid of your debt can be challenging and you may not be able to get rid of all of it by this spring season, but it’s worth Setting up a plan to get the process started!
Spring Cleaning your finances can be soooo beneficial, even if you just do one or two of the steps above. Keep it simple with simple tracking and follow my Get It Together Money Course if you need some help along the way. Growing your future and getting your $hit together is possible! It all starts with action, and Spring is the perfect time to start. Stick with me for financial support along the way, and creating a future that you love is within reach and this is the perfect season to get started. Happy Spring Cleaning!