Spring is finally here, regardless of whether it feels like it outside or not. Around this time of year, many see it as their obligation to go through their homes and rid themselves of unnecessary items that clutter the place up. The idea that a clean and happy dwelling is a rebirth and a new start. Why not take this same approach to your finances?
At the start of every calendar year, I always suggest creating a new budget for the upcoming year. Mapping out your income and expenses presents saving opportunities and fiscal responsibility. We are now almost three months into the new year and expenses sometimes change. That is why I always do a financial spring cleaning. Below are my favorite three ways to do a financial spring cleaning
Financial Spring Cleaning Tip 1: This first tip is directly related to a normal spring cleaning of the house people already do. Go through your closet and determine which clothes you don’t need anymore. Maybe you have shoes you don’t wear, pants you’ve outgrown, DVD’s you no longer watch because of a Netflix subscription. Gather up these items and donate them to a local shelter like The Salvation Army. Not only will you eliminate these useless items from your place, but you will be giving to those who could benefit from such items. The best part about all of this is most of the times you can receive a tax deduction for your donations. This can lead to a higher income tax return for the 2017 year.
Financial Spring Cleaning Tip 2: Clean out unnecessary clutter in your budget. For example, maybe at the beginning of the year you signed up for a gym membership you no longer use. Cancel it. Go through the various categories in your budget and see if they are relevant to the remainder of the year going forward. Perhaps you dedicated a portion of your budget to pay off debt, but now you no longer have that debt. Eliminate that category. Eliminating categories in your budget makes it simpler and much easier to read and track.
Financial Spring Cleaning Tip 3: Review the dollar allocations in your budget. Say at the beginning of the year you were eating out lunch every day, but now you realize the many health benefits and cost savings of bringing your lunch to work. See if you can slash $30-$50 a month off your food budget. Shop around for car insurance. Perhaps you find the same coverage with a different company for $15 less a month. Eliminating a little bit of money from a few categories adds up and helps boost your savings potential.
Financial spring cleaning allows you to revamp your finances for the remainder of the year. Even if you haven’t done a good job of sticking to your budget, it is never too late. A financial spring cleaning can allow you to set up your financial priorities for the remainder of the year and gives you a clear financial conscious heading into the spring and summer months.