Tips for Tidying Up Your Finances

For many, the onset of spring and fresh air outside means spring cleaning inside. It’s time to swap sweaters for shorts and to get rid of the dust and clutter that’s built up over the cold months. While you’re at it, you might want to take time to spring clean your finances with these seven steps:

1. Refresh Your Budget - Being the most important piece of your financial planning, your budget is a good place to start when tidying up your finances. Take an afternoon to go over your spending during the past few months. Do you notice any problem spending areas? Or are there any areas where you’re overestimating expenses? Adjust your budget accordingly.

2. Clean Up Your Credit - Get to know your credit report better. Dedicate spring cleaning time, which coincidentally enough is also tax time, as the annual time to review your credit report and make sure everything looks in order. You can access a free credit report at www.annualcreditreport.com or by calling (877)-322-8228.
   
   Now that you know your credit score, let’s clean up that not so great credit. Fixing bad credit is about getting back on track by paying bills on time, budgeting, and using credit wisely. At the first sign of a late or missed payment, inform creditors of your present situation and how you plan to resolve your financial problems. If you have a good payment history, you may be able to negotiate your next payment. Pay down the credit cards and loans with the highest interest rates first, or consider looking into a balance transfer that may offer a lower interest rate and a single monthly payment.

3. Opt For Paperless Billing - Most accounts these days have a paperless billing option. Not receiving all those paper bills in the mail (especially if you log in online to pay bills, anyway) can cut back on those piles of paper taking over the kitchen counter. Decreasing the number of bills sent to your home can also help fight identity theft!

4. Clean Up Old Paperwork - This step is great for spring cleaning both your home and your finances. Take time to sort through your paperwork and files and shred the documents you no longer need. For instance, the federal government recommends that you only need to keep bank statements for a year, and you can discard tax documents (and their supporting records) after seven years. Just be sure you adequately shred any documents that include personal information.

5. Check Your Withholdings - Tax return checks seem wonderful. Who doesn’t want a free lump sum of money every spring? That's the issue though, it’s not free money. If you received a big return this year, it just means you were kind enough to give the government an interest-free loan out of your paychecks throughout the previous year. When setting up your withholding, your goal should be to achieve a balance. You want to get as much as possible in your paychecks without owing the internal revenue service money when you file taxes. So adjust your withholding as needed to get to this point.

6. Create a Home Inventory - If you have homeowners or renters insurance (which you should), you need to have a home inventory of all your possessions. An inventory will make it much easier to replace your items in case of a disaster. If you don’t have one, it’s time to put it together! Take photos of most of the items in your home, write down the approximate amount you paid for the item and start saving receipts for new items you bring into your home.

7. Shop Around - If you haven't checked up on the rates you're paying for most of your recurring expenses, chances are you could be overspending. Double-check expenses such as your car insurance, phone plan, internet, or other recurring items to see if there are better rates available to you.