Breathe Fresh Air! It’s Time to Spring Clean Your Finances
Spring is around the corner, and I’m sure many of you already started opening your windows and cleaning the dust that accumulated during the winter. While cleaning your house is important, don’t forget to give some fresh air to your finances.
As organizing a messy closet makes you feel more comfortable and happier, getting rid of financial problems will give you piece of mind. I know that tackling financial problems can be a tough task, but it shouldn’t be seen as a negative experience. Instead look at it as a way to help your kids through college, enjoy a nice retirement and eliminate debt.
Here are five tips to spring clean your finances:
•Clear out the clutter: Addressing financial problems becomes much easier when records are organized. You should take advantage of tax season to establish new filing habits. For example, you can organize receipts, credit card statements and credit reports into different folders. This habit not only will help you to keep your finances organized, but it will allow you to track spending.
•Perform a credit checkup: A clean credit report can be a valuable asset. You can request a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies. You should check your report carefully for accuracy and report any mistakes. Reviewing a credit report is also a great way to get a snapshot of your financial obligations.
•Wipe out debt: This time of the year is ideal to pay off debt. As soon as you receive your tax refund, put that amount toward your credit card payment. If you need more money to eliminate debt, design a saving plan to finish paying your debt by the end of the year.
•Review monthly withholding: You can check if you overpaid or underpaid on your taxes last year. If you paid too much, you can reduce the amount held from your paycheck and put that money aside to pay off debt or start an emergency fund.
•Check investments: An unstable stock market and a weak economy have affected the investments of many individuals. It’s wise to sit for a couple of minutes to review the interest accrued on investments and make any necessary adjustments to increase capital gains. It’s also important to maintain a healthy balance between the level of risk and earnings—being too aggressive may put your finances in danger.