If you’re anything like us, you’re in full spring cleaning mode. This month, we’re bringing you a series of posts on how to tidy up everything in your life, from your finances to your wardrobe. This week, we present to you some important tips for tidying up your financial life.
While plenty of people use the first of the year to set big financial goals, by March, many of those have fallen by the wayside. Instead of letting your abandoned budget get you down, use the change in season as a motivator. As the weather improves, many of us get into spring cleaning mode, ready to clear out our closets and cabinets. Take advantage of this momentum to dust the cobwebs off your calculator and get your budget back on track, too. From maintenance tasks to rebalancing your spending, here are some tips for spring cleaning your finances.
One of my favorite ways to spring clean my finances is to plug my spending leaks. This can be as simple as going through your credit card statement to ensure you’re not paying for a service you don’t use anymore or that you’re not double-paying for a subscription. For example, a few years ago, I realized I had two Dollar Shave Club subscriptions for some reason — I was wondering why I was getting so many razors in the mail! I caught this silly error by sitting down and combing through my credit and debit card transactions. From there, it was a simple fix to save an extra $10 a month.
Take it a step further and check on the balances of your HSA card, your transit pass, gift cards or reloadable credit cards that are floating around in your purse, and anywhere else that you may have five to ten dollars leftover on a gift card or maybe even in your Paypal account. Even if you don’t spend any of the funds you find right away, you’ll know you have them and can strategically decide how to use the money you’ve discovered. Finally, take a look at the escheat website for your state to make sure that you don’t have any abandoned “property” (like a forgotten rebate or utility bill deposit) that the state is holding onto in your name.
Next up, analyze your spending to see if there are ways you can stop shelling out extra money. My internet provider seems to jack up my rate every March by at least 10%, so I put a task on my calendar to call and renegotiate with them before they do so. In the past, this has saved me anywhere from $5-20 a month.
Even though I hate talking on the phone, this is absolutely worth a 15-minute phone call once a year. I also take a look at my car insurance and confirm that it hasn’t increased. Ditto for renter’s insurance, cell phone contracts, gym memberships, and anything you pay for yearly or semiannually. Even if you can’t talk the provider down from raising your rate, at least you’ll be able to budget for that increase rather than being unpleasantly surprised by it instead.
Once you’ve tackled the first two categories and know how much money you’re going to save — or spend– going forward, you can use that information to readjust your budget. Examine your spending categories. If one category has increased substantially, figure out another category you can decrease to balance things out.
If you’ve managed to shave every extra penny from your budget and talk your way into discounts and savings, that’s great news. Then you get to decide where you want that extra money to go. This could be into your emergency fund, paying down debt, or saving for an upcoming summer vacation. Rebalancing your budget can also help you evaluate how much you thought you needed for certain categories compared to how much you actually spend. No longer shelling out $50 on entertainment each month because you cut a streaming service and started listening to ads with your music? Figure out where that extra money needs to go to work its hardest for you and reallocate it. Similarly, if you’re overspending on certain things, this is a good time to reevaluate some of your problem spending areas!
Raise your hand if you’ve heard you should check your credit report at least once a year, but almost never actually get around to it. *Raises both hands* A lot of us are probably guilty of thinking about checking our credit reports without actually carrying out the crucial step. However, it’s a good tool to help guard against identity theft and fraud. Tracking your credit report will also help you keep an eye on anything that will negatively impact your credit score.
Your credit report and score are two different things. Your report is much more important and includes a list of all of the credit accounts in your name. You can get a copy of your credit report from each of the three major bureaus — TransUnion, Experian, and Equifax — for free each year at annualcreditreport.com. Your score is a reflection of what’s in your report. Sites like WalletHub and CreditKarma will tell you what your score looks like, and some credit card statements will show you your score, too.
One of the easier things you can do to improve your credit score is to request a line of credit increase from your credit card company. If you pay your credit card off in full every month and trust yourself to use it responsibly, asking your credit card company for a line of credit increase will decrease your credit utilization rate. This basically means that you will have much more credit available to you than you actually use each month. This tells potential future creditors that you do a good job of managing your credit because you’re far from spending the maximum amount available to you.
If you’re in the debt payoff stage of your credit card journey, you can try to renegotiate your interest rate, too. You will be most successful in renegotiating if you do a little homework ahead of time and shop around to see what rates other companies offer. Then you’ll be in a better position to ask your current company to match a competitor’s rate. Offer some concrete reasons for them to consider your request, including how long you’ve had the card and that you make your payments on time each month. Be polite but persistent, and ask to speak to someone else in the chain of command if the person initially addressing your case can’t authorize a lower rate. Ultimately, the worst they can say is no.
The term “spring cleaning” might bring to mind mops and feather dusters, but don’t limit yourself to the physical task of readying your home for a new season. Sitting down for a scrub session with your finances will put you in a good position to tackle the rest of the year, wiser and, hopefully, wealthier.
A grant writer by day and personal finance fanatic by night, Marisa is an avid traveler who now lives in Boston. When she’s not reading or writing for work or play, she enjoys running, thrifting, and searching for the most authentic Mexican food in the city.
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