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3 Tips for Your Financial Spring Cleaning

Barefoot man using vacuum cleaner

Now is the perfect time to tie up all the loose ends you’ve been meaning to get to, but never seem to find the time. And, since you’re already digging through your finances to get your taxes taken care of, why not take the chance to take a step back and evaluate whether you’re on track to meet all your financial goals by doing a financial spring cleaning.

Get your budget in order

Starting a budget is easy. Simply create a list of your expenses and apply the 50/30/20 rule: set aside 50 percent of your budget for “needs,” 30 percent for “wants,” and the rest toward savings and debt. Then keep track of how much you’re really spending and make sure that purchases are within your allocated budget.

If you hate math, don’t worry — you can still budget effectively. For example, a simple budget template from Google Sheets could provide a stress-free (and calculator-free) option for keeping track of your finances. There are also several personal finance apps that can simplify your budget and give you better visibility into your spending habits, such as YNAB or Mint.

Remember, the most important part of managing your finances is identifying and addressing budgeting issues early. Make spending adjustments instead of ignoring your budget. This can help avoid all sorts of costly problems, including relying on higher-interest credit cards, for large purchases.

Manage debt wisely

Making payments on-time and paying more than the minimum payment on your credit cards is only the beginning of effectively managing your credit. Smart credit management includes using the financial tools available to your maximum advantage.

For example, if you have good credit but have a high balance on a high-interest credit card, you may benefit from consolidating via a personal loan. With a personal loan, borrowers often see lower interest rates compared to credit cards and a single monthly payment–which is usually a lot easier to keep track of than multiple credit card payments.

People unable to secure a personal loan may benefit from a balance transfer to a card with a lower interest rate, but often introductory interest rates advertised are only temporary, so it pays to pay attention.

Another situation where you might benefit from re-evaluating is if you have a mortgage or other sizable loan, like a student loan. There are sometimes attractive refinancing offers available that could lower your interest rate. Just make sure that you read the fine print and understand all the fees and details of the new loan when you decide what’s right for you.

Make sure you’re on track for retirement

It’s a good idea to periodically check your retirement contributions to ensure you’re getting the most out of it and meeting your individual retirement goals. Another way to monitor this is to schedule a meeting with a financial advisor, who can help you determine where you stand (and whether you need to make any adjustments).

Either way, make sure you prioritize your retirement savings and don’t neglect your contributions.

Spring clean your finances

There you have it — while financial spring cleaning may sound a little daunting, it’s as important, if not more, than getting the house and yard cleaned up for the summer.

Once you have both done, you’ll have extra peace of mind as you enjoy the great outdoors or relax poolside and soak up some sun.

Read more

  • 4 Financial Mistakes You Can Fix ASAP
  • The Complete Guide to Managing Consumer Debt
  • Using a Personal Loan to Pay off a Credit Card
  • 10 Habits of Debt-Free People You Can Start Now

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The post 3 Tips for Your Financial Spring Cleaning appeared first on Prosper.

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