Tips to Clean Up Your Finances
Tidying up isn’t just about organizing your junk drawer – it’s also about addressing your finances. Set aside time to review your financial goals so you can organize and optimize for the months ahead.
● Review Your Budget. Take a long, hard look at your budget from the past year. Are there any areas where you consistently overspent? Are you budgeting too much money for takeout and not enough for groceries? Realistically evaluate your habits and adjust your budget to reflect your current financial priorities and goals.
● Set New Financial Goals. Whether saving for a big summer vacation, a down payment on a home, or retirement, having clear goals will help you stay focused and motivated.
● Check Your Credit Report. Your credit report is a barometer of financial health. Review it annually to ensure there are no errors or signs of fraudulent activity. If you notice any discrepancies or red flags, contact a credit reporting company to place a fraud alert on your report.
● Cut Unnecessary Expenses. We’ve all signed up for a free trial and forgotten to cancel it or enrolled in a membership program we didn’t end up using. Put some money back in your pocket by identifying and canceling recurring expenses you no longer need.
● Organize Your Financial Documents. Conquer your junk drawer and consolidate all your important financial documents. From bank statements and tax returns to insurance policies and investment statements, properly storing and labeling these documents can save you time and stress in the future. If you don’t want to keep up with physical copies, go paperless and request e-documents only.
● Review Your Investments. In addition to your budget, take a look at your investments. If you notice any imbalances or underperforming assets, consider rebalancing your portfolio or consulting a financial advisor. This will help ensure your investment strategy aligns with your risk tolerance and long-term objectives.
● Check Your Emergency Fund. If you don't already have an emergency fund, now is the time to start one. Aim to save enough to cover three to six months' worth of living expenses in case of unexpected financial setbacks.
● Plan for Tax Season. After you’ve organized your financial documents, take a moment to plan ahead for tax season. Keep track of your eligible expenses throughout the year so you can maximize deductions and credits when filing season rolls around.
● Keep Learning. Financial literacy is a lifelong process, and investing in your financial education can pay big dividends in the long run. Keep growing by taking advantage of resources like community workshops, podcasts, and books.
Breathe new life into your budget by taking stock of your financial situation. Then create a roadmap to a more secure financial future. Need help getting started? Check out our blog for more practical financial tips.