Happy 1st day of March! Spring is quickly approaching and it’s time to get on top of your finances. Many of us tend to set resolutions at the end of each year. However, it can be difficult to stick to those resolutions. I find it more manageable to set goals closer to spring instead of New Year’s. It never fails when starting a new year I would set resolutions and find that I can’t immediately start them because I’m recovering financially from Christmas. For the past few years I’ve been using the “Financial Spring Cleaning Method” and found that it works better for me. Here are a few tips that helped me along the road to financial success.
- Be Proactive
In order to maintain your personal finances, you have to stay consistent. Take the time to plan and tackle your goals one at a time. It can be easy to procrastinate when handling financial tasks. I know at one point in time for me it was lack of awareness and not able to identify what was important. I found that when I write tasks or goals down I tend to complete them faster
- Write down your goals and monitor your progress
Find out what works best for you! You can use a notebook, spreadsheet, or financial software. Make an effort to use it consistently. I found that when I write tasks or goals down I tend to complete them faster. If you’re new to this start with short term goals. Ask yourself where do you want to be financially in the next 90 days? Then keep your goal list in place you can see on a regular basis.
- List, organize, track, budget
Pick a day of the week to review your expenses and monitor your budget. In my case Thursday is “create and review day!” I typically review all of my bills, write out a grocery list, and decide on what pay date I will pay certain bills. By using a notebook this allows me to review it at any time and make changes if needed. When organizing bills I typically write out the next three pay dates and list each bill based on the due dates. In some cases I may create multiple list and then narrow down the best options to tackle those priority expenses.
- Cash only and savings
Once your bills are listed you want to make sure you have enough funds to make it to your next paycheck and possible have a savings. Determine what it cost for transportation, expenses to and from work. Depending on the amount, this is what you need to set aside first before tackling any expenses. Let’s face it, in order to pay for priority expenses you have to make it to work! In the past, I’ve had an issue with swiping my debit card for gas and lunch. It was easier for me to pull the exact amount of cash I needed to carry me through the next payday. Depending on how discipline you are, it may benefit you to have a certain amount daily instead of weekly or bi-weekly. In the event that life happens, you may or may not start a savings just yet. However, this is helping to prepare you to create a savings in the future.
- Declutter and increase your piggy bank
Since we’re on the topic of spring cleaning! This is a good time to purge your home of unnecessary clutter. That goes for clothes, electronics, decorations etc. My rule of thumb is if it has not been used in the past season it’s time to let it go, unless it’s something of sentimental value. If it’s an item that’s in good condition it may be worth selling, this will help with creating a savings. If you can’t sell it donate it this will help going into the next tax year.
- Review your credit report and plan to get out of debt
If you haven’t reviewed your credit report in the last 12 months, do so. You’re entitled to a free credit report every 12 months. You can obtain all three credit reports by visiting www.annualcreditreport.com. Review your reports for any errors and debt balances. Since you’ve already determined your budget, now you can find out if you can afford to start paying off your debt. Review your credit card statements to determine your interest rates and benefits. This will help you decide if you should work to pay off one account verses the other.
- Educate yourself
Make a goal to become more financially literate even if you’re confident in your personal finances it always something new to learn. Utilize all resources, online, mobile apps, family, or professional resources. The more information you have, the better prepared you will be on making important decisions for your present and future financial well-being.
As good as it feels to spring clean your home and have a fresh start, it can be done with your personal finances. Start spring productively and with a solid understanding of your financial situation. Good luck on your way to a healthier financial year!