Spring is in the air, and with that comes the urge to clean out the cobwebs in our lives, including our finances.
Here are five ways to get started decluttering your financial life.
1. Redo Your Budget
Revisit your budget at least once a year to get aligned with your spending. Redoing or refreshing your budget can also help you decide if it’s not working. There isn’t just one way to budget, and a different approach might work better. One example is the 50/30/20 technique, where you put 50% toward necessary expenses, 30% toward discretionary costs, and 20% toward savings and debt payments.
2. Organize Your Docs
While you’re cleaning out your closets and drawers, it’s a good time to shred old documents and digitize the ones you want to save. Apps like Scannable, Adobe Scan, or Microsoft Lens allow you to use your phone to scan documents so you can ditch the paper. Next, go paperless with your credit cards, bills, and loans. Not only will it help you declutter, but you’ll also be helping the planet by reducing waste.
3. Check Your Credit Report
Review your credit report to ensure no discrepancies or inaccuracies could impact your overall financial health. This will also help you stay proactive against fraud and take steps to fix your credit score if it’s dropped. You can access your three credit reports (Equifax, TransUnion and Experian), for free by visiting www.annualcreditreport.com. You won’t get your credit score, but it’s not necessary if you are just checking for what is being reported and if there are any errors listed.
4. Save for the Holidays
You might wonder why we’re telling you to start saving for the holidays when it’s only spring. But people often wait until late fall before they start thinking about it, which is usually too late. Unfortunately, holiday spending typically ends up as new credit card debt in the new year. Putting money away now can help you circumvent that tired pattern.
5. Consolidate Your Credit Card Debt with a DMP
Getting your credit card debt in order can seem overwhelming, but working with a credit counseling agency can help you enroll in a debt management plan (DMP). These credit professionals will work with your credit card companies to consolidate your unsecured debt and lower your interest rate, so you can pay off your loans more quickly and efficiently.
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