Thursday, March 31, 2011

Time for Spring Cleaning - Your Finances

So many of us are familiar with the idea of spring rolling around and picking up the feather duster (really? does anyone really own one of those?) and getting those nooks and crannies taken care of. You may do the windows or flip the mattress, or just other minor details that are not part of the regular cleaning schedule. What about other areas of your life? Let's look at a few ways you can spring clean your finances.

  1. Re-evaluate your budget. This is something that needs to be done from time to time anyway, so why not sit down with your spouse and seriously plow through it. Talk about what is working and what is not. See if there are any changes you can make from the last time it was modified. Make sure you are massaging it to work for you the best possible way.

  2. Check out your insurance policies. Can you drop your full coverage (we just did!)? Have you lost weight and might benefit from letting your life insurance carrier know this? Do you need to add life insurance now that you've added a new baby to the family?

  3. Revisit your beneficiaries. Make sure all of your insurance policies, 401k, etc have the correct beneficiary info on them in the event your unexpected demise (isn't that a happy thought?)

  4. Do you need those subscriptions? Are you using Netflix? Do you find yourself always returning those Featured Movies because you forgot to decline it? Do you actually read that magazine? Can you downgrade from a daily paper to Sundays only? Take a look at all of those things you get charged for monthly without a thought.

  5. Can you close any accounts? A lot of people only accounts with online banks that offer $25 FREE UPON SIGNUP and never use that account. Take the money out and close the account. You aren't using it and it's just something else cluttering up your life even when you give it no thought.

  6. Re-evaluate your financial goals. Will you pay off your debt sooner than expected? Make sure there is a plan to make that happen. Are you now debt-free and need to start saving? Make that change NOW.

  7. Clean out your personal finance records. I'm not saying trash everything, but make sure everything you are keeping is all relevant and stored together in some order that someone other than just you can decipher. Keep tax documents. Throw out ATM receipts. Shred any documents that are going to be trashed.

  8. Automate OR Unautomate your bills. What?! I know...sounds crazy. For those of you who are always paying your bills late, set up automatic bill payment with your bank. Of course, you'll have to make sure the money is in there when the bill is due, but you won't ever pay it late again. I would be shocked if your bank does not offer this. For those of you who cannot keep track of your money because it is automated, unautomate it and return to writing and mailing checks, or just manually paying bills online. This sounds crazy I know, but different strokes for different folks, you know. Make sure your system is working for you. Also--automate some money into your savings and/or retirement accounts while you are at it. You'll get to where you don't even miss it and your older self with thank you!

  9. Start your Christmas/birthday fund. I know it is hard to think about it now, but if you start saving for those special events now, you'll find that you are not stressed about where the money will come from when the big day arrives.

  10. Run one of your credit reports. I do this every 4 months so that annually I have check all three reports throughout the year for free as I'm entitled to. I discuss that more here if you want/need details.

  11. Close open accounts. Do you have store credit card accounts that are empty and need to be closed? I know, you'll reduce your available credit but you'll also reduce your chances of having your identity stolen. Since I wouldn't recommend closing them all down at once if you are concerned about your FICO score, go ahead and close all of the small ones now. The others can be closed as you pay them off if you desire.

  12. Shop for better service. Whether it be for your technology package, your garbage, your cell phone or your lawn service, call around and see if your provider still has the best price for the service. Do the same with your banking service.

  13. Check out your investments. Look at your IRA or 401k and make sure you are invested where you need to be. If you still need to throw some money into your IRA to claim it for 2010 taxes you have until April 15th, so make sure that happens.

  14. Evaluate your tax withholdings. By now you've probably done your taxes (if not, just do this step as soon as they are done) and you know how your withholdings compared to what you owed. Make any adjustments needed to make sure you don't owe next year or don't get as huge of a refund (unless that's just your thing).

  15. Look for things to sell. Look! This one cleans up your house and your finances! Find things around your house that are glorified paperweights. If you use your treadmill as a clothes hanger, put it up on Craigslist. If you have baby gear and no more babies, take them to consignment. If you have clothes that you just cannot or will not wear, take them to consignment or even donate them (get a donation receipt if you can). If you have a baseball card collection sitting in the spare bedroom in boxes and it hasn't seen the sunlight in 15 years, put that sucker up on ebay. This will free up some physical space in your house as well as give you some cash to apply toward your financial goals.

So take advantage of the warmer weather and breathe some fresh air into your finances!

Do you have any other suggestions?

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