How to Spring Clean Your Finances

spring clean your finances

Please welcome back our usual Tuesday contributor, Cat from Budget Blonde. After reading Cat’s post, head over to Personal Capital and read my first post for them – Does the MyRA Solve the Retirement Saving Crisis?

You’ll have to excuse me for writing about how to spring clean your finances today: I am in a major organizing and nesting phase right now. Random things are getting labeled everywhere. Come and visit me, and you might leave with a sticky note stuck to your back. Seriously, I packed my hospital bag at 26 weeks pregnant. I might be overdoing it a little bit. :-)

Of course, when I clean and organize, I work on my finances too. That’s where the notion of how to spring clean your finances came from :-) I’m of the opinion that just because it isn’t spring just yet doesn’t mean you can’t spring clean your finances. After all, we’re all worthy of a little springtime magic given the horrible weather lately across the country (seriously – snow in Louisiana people!)

So, how does one go about cleaning up their finances? Easy. Just follow the steps below.

1. Check Your Credit Scores

The beginning of the year is a great time to check your credit score, and you have no excuse because it’s free, baby!

What you’re looking for are adverse accounts, which will show you if you were late on a payment or have something in collections.

My credit report looked great this year, but last year I received quite the shock because the LIBRARY – yes, the public library – sent me to collections for not returning a book. It was a huge pain, and I had to go through my storage to find the book, send it back to the library, and then it was taken off my credit report.

So, even if you are savvy with your finances and think your credit report is perfect, you just never know what you might be missing. Also, return your library books because those librarians mean business.

2. Find a System To Make Your Taxes Organized

Every time I do my taxes, I wish I would have been more organized the year before.

Since this will be my first year as a self-employed business owner, I have extra motivation to ensure that all of my details are crystal clear. I do not want to spend 2015 trying to find receipts or remember a business expense that happened months before.

My organization was okay with my taxes this year, but it could have been better. If you are in the same boat, take the time to develop a system now in the beginning of the year, and set aside an hour or two at the end of each month to ensure you have documentation for all the big things that happened that month.

3. Finally, Spring Clean Your Finances by Automating Your Savings

We’ve chatted about this before, and I know that not everyone agrees with automating your finances. So, even if you don’t want to do that, at least set aside a time to put money in savings each month. This includes your general savings and your retirement savings. I love that money gets automatically put into my IRA and buy orders automatically go through every month. It’s one less thing I have to think about.

Of course, I had to make phone calls to the bank to make sure that everything was set up for 2014 and that it was all organized to come out on the right dates. It took a good chunk of time to set it all in motion, but now that that part of my financial life got the spring cleaning treatment, and I am happy.

There are tons of other ways to spring clean your finances, from tweaking your budget to finding the best way to track your spending. How will you spring clean your finances this year?

 

Photo Credit: StoreBukkeBruse

 

 

 

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About the author:

Catherine Alford is a personal finance freelance writer and blogger. She received a B.A. from The College of William and Mary and an M.A. from Virginia Tech. When she is not writing for other websites on all topics frugal and fabulous, she enjoys sharing her adventures on her blog, www.BudgetBlonde.com. You can connect via Twitter / Facebook.

42 comments on “How to Spring Clean Your Finances

  1. I had no idea that the library could affect your credit report/score. That’s crazy. At least they took it off the report though once you returned the book. I’m always wanting/needing to be more organized come tax time but it never seems to happen. Maybe 2014 will be the year.

  2. These are some good points. I usually just get a manila folder and label it with the tax year. Then, I just add whatever documentation I need for throughout the year. I can understand though that being self-employed probably requires a lot of documentation of income and expenses.
    Liz recently posted..January {In Review}My Profile

  3. I think that spring cleaning is an excellent exercise no matter what time of year. It is a great way to dust off your life and realize what you need, and I completely agree that you should do it financially as well. I completely agree about checking your credit score. I have an email reminder to check it every few months because you never know when something might pop up.
    Shannon @ Financially Blonde recently posted..Tales of Two Thrift ShoppersMy Profile

  4. A few times a year we look back at our spending to address any outliers. Usually there are one or two categories on which we can cut back. Like you, we’ve also automated our savings and paying of bills. We monitor our accounts frequently, so we not disengaged. But, having all this automated ensures that we pay ourselves first and that bills get paid early or on time, thereby increasing our credit scores. Helpful article. Thanks!
    John Schneider recently posted..What We Can All Learn from James FrancoMy Profile

  5. We are big believers in automating our savings! We also automate our debt repayments so that with every paycheck (we get paid every two weeks) we send a payment to the student loan companies and the mortgage company. We end up paying extra on each that way AND it comes off the top of our paychecks so we never have an excuse to NOT do it!
    Dee @ Color Me Frugal recently posted..February Goals and Life UpdateMy Profile

  6. Great tips! I also create a file for the year’s taxes and put every relevant document I receive into that file during the year. I failed to put in some pay stubs for side jobs but was able to verify the 1099 I received against invoices (something I should probably save in a tax file, too!). I haven’t checked my credit score in a while but after reading this post, it’s clear I should get on it! Thanks Cat. :)
    Kendal @HassleFreeSaver recently posted..It’s Not Me, It’s YouMy Profile

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