Spring Clean Your Finances
Take a break from spring cleaning your house and think about a spring cleanup of your finances! While you get to sit down, it’s scarier because it impacts your entire life and future. In 2021 I sat down and did a deep dive into our family finances and it took DAYS! I printed out 3 months worth of bank and credit card statements. Then categorized EVERY SINGLE transaction. It was both eye opening and disgusting at the same time. We were spending an exorbitant amount of money eating out every month. There are five of us and we are busy, just like you, so it’s just easier to pick something up most days. But the funny thing is, we were still spending money every week getting groceries so what was happening to them?
One of the only good things to come out of everything shutting down was that we had a chance to reevaluate what was important to us and what we wanted for our future. Did we want to eat out every meal, just live paycheck to paycheck, or make a change and have bigger better dreams and goals? I want to travel! I want to have experiences with my family. I want to retire before I’m 80 years old. Those are the things that mean more to me than the convenience of eating out. Long story short, we set a budget for eating out. We opened a separate checking account just for that so we know exactly how much is in there at all times. We started on a not-horribly-painful path to achieve our dreams.
So, spring is not just a great time of year to clear your house of accumulated junk and make it sparkle; it’s also a good time to do the same for your finances! Junk can accumulate there, too. Whatever your current situation, a thorough spring-cleaning for your finances is a responsible move this time of year.
Here are some ways to spring clean your finances:
Sweep out your budget
It’s time to shake out the dust in your budget! Review your monthly spending and find ways to cut back. Have you been overdoing the takeout food this year? Buying up more shoes than you can possibly wear? Pare down your budget until it’s looking neat and trim.
Freshen up your W-4
Tax season is prime time for revisiting the withholdings on your W-4. If you received an especially large refund this year, you may want to adjust the amount you withhold. The IRS’s tax withholding estimator can be a useful tool to help you determine the perfect number.
Deep clean your accounts
If you’ve switched from one bank or credit union to another, you may have dormant accounts that are still open and may be charging you fees. Or, perhaps they’re holding onto money you’ve forgotten you have! Visit the unclaimed property page at the Texas Comptrollers Office and do some research! And don’t forget about the 401(k) you may have from an old job. Now may be the time to transfer those funds to your current 401(k).
This spring, do a Marie Kondo on your finances and get rid of any accounts you don’t need any longer. A minimalist approach to your finances will make it easier to manage your accounts. It will also give your savings a greater chance at growth, and help you avoid fees for unused accounts.
Toss out your debt
Get ready to kick that debt for good!
If you’ve been stuck on the debt cycle for too long, make this spring the season you create a plan to break free.
First, trim your budget or consider a side hustle for earning some pocket money, designating these extra funds for your debts. Next, choose a popular debt-busting approach, such as the avalanche method, in which you pay off debts in order from highest interest rate to lowest, or the snowball method, where you start with the smallest debt and then move up your list as each is paid off. Once you’ve chosen your approach, maximize payments to the first debt on your list, making sure not to neglect the minimum monthly payments on your other debts. It might be a grind, but you will have so much peace of mind as that dept pile decreases.
Dust off your saving habits
Have you been remembering to pay yourself first? Get into the habit of maximizing your savings this spring with a tangible financial goal. You can also make savings an itemized line in your budget. This way, you’ll have funds set aside for this purpose, instead of savings only happening if there’s money left over at the end of the month. Finally, automate your savings by setting up a monthly transfer from your checking account to your savings account. Never forget to pay yourself first again!
Make your investments sparkle
Whether you’re an experienced investor or you’re just getting your feet wet, it’s time for a spring cleaning of your investments. Check if your allocation strategy is still serving you well, whether you need to adjust your diversification and if your retirement accounts are on track for your estimated retirement timeline.
Check out our Banzai! page for budgeting, saving, and debt payoff coaches and calculators. Also, take a look at our How To’s section of the blog to learn how to set up automatic transfers, keep an eagle eye on your debit card spending and so much more!
