6 Steps to Spring Clean your Finances

Ready to do some spring cleaning? Nothing feels more satisfying than refreshing your home, but what about refreshing your finances? Finances are something that often gets missed in the spring cleaning process, but it’s just as important to do.

Your home won’t clean itself and will often turn into chaos if ignored for too long; your finances will do the same. The goal of breaking out the financial dustpan and cleaning up your personal finances is to assess where you’re currently at and where you want to be so you can end the year in a better position than you started it. Let’s explore how you can get started with the financial spring clean process.

Top Tips to Spring Clean Your Finances

Ready to get started with your financial spring cleaning? Some of the best ways to clean up your finances are to:

Update your Filing System

You don’t have to invest in a lot of file folders or labels, but make sure you can easily find and access the essential documents you are saving. Toss information and documents you won’t need in the future, and make sure you shred all physical documents that you are throwing away to avoid identity theft.

To cut down on physical clutter completely, consider keeping digital files of all your important documents and then backing them up on an external hard drive. This will help ensure you have copies of your files in case you spill coffee on your laptop.

Set and Forget

Schedule your bills, such as utility and insurance, on autopay. Bill payment history is heavily weighted in credit score calculations, so missing a bill payment on a credit account can cause your credit score to take quite a hit.

By activating autopay on credit accounts, you can make sure your score won’t slip if your memory does. Some accounts may even give financial benefits, such as a few dollars off of your bill each month, for setting up autopay.

While you’re automating your bills, consider automating your savings as well. You won’t have to remember to transfer money from your checking account to your savings, which will help you build your savings for large purchases or an emergency fund.

Review What You Need

Is your attic, basement, or garage full of memories from the past? If so, it’s time to consider letting some things go. Hold a yard sale, advertise on Craigslist or similar sites, and help your possessions move on—putting cash in your wallet as you watch them go.

While you’re evaluating physical possessions you don’t want or need any longer, evaluate your streaming services. Are there any that you don’t watch as often as others—or don’t watch at all? Cancel your subscriptions and get extra money in your account each month.

Check on Your Budget and Savings

Check where you are in your savings and start an emergency fund if you haven’t already. Unexpected emergencies happen. Being prepared for the unexpected can relieve stress when something goes wrong. Experts recommend saving for at least six months of living expenses in case of a job loss, which would allow you to use your savings instead of living off of credit cards.

Use this time to also review your budget and whether there is additional money you can contribute to your savings.

Get Debts Under Control

Do you have debts such as credit cards, student loans, and personal loans that you want to get ahead on? Consider debt consolidation. There are several debt consolidation options, such as balance transfer credit cards and consolidation loans, that can help you streamline multiple payments into one payment a month—potentially with less interest and a better repayment timeline.

Update Your Passwords

When was the last time you updated your passwords and devices? Security experts differ on exactly how often you should update your passwords, but the recommended minimum is at least once a year.

Regularly updating your passwords is a good idea to help keep your identity theft risk limited and your accounts less vulnerable to unauthorized access. Remember, complex passwords with a combination of letters and numbers are recommended.

Build a Budget That Works for You

It’s important to periodically review your budget to make sure it’s still working for your current financial situation. Find out our top savings tips and how to be smart with your finances through your budget with our guide to budgeting.