“Spring Cleaning” Your Finances

It’s spring! The warm air is creeping in. The days are getting longer, and the sun is shining brighter. It’s a moment to celebrate the end of winter and breathe in the freshly bloomed trees. But it also means cleaning overhaul time.

Spring cleaning will be in full force soon if you haven’t started already. You’ll be organizing the house from top to bottom. Decluttering the garage and hiding all your winter gear. The vehicle will get a much-needed vacuum from all the mud tracked in.

But there’s something else that needs the spring cleaning treatment – your finances. Although not something always thought of, your finances should get decluttered, organized and thoroughly looked at just like everything else. So here are some spring cleaning tips to help get your finances in order.

Make a Goal

Diving into organizing finances headfirst can get overwhelming, very quickly. Instead, create goals to achieve daily, weekly and even monthly. Whether it be today’s the day to organize the taxes folder or shredding papers from ten years ago, markdown goals you want to get done. It will be the easiest way to organize everything you need to complete. Plus it is rewarding checking off your list one item at a time.

Keep or Shred?

As you start going through documents, you’ll need to know which papers to keep and which to discard. It’s important to keep all the records used to file your taxes each year. You will need them if you are ever audited and have to prove your income.

But at what point do you no longer need to keep all the files? A general guideline is to keep your documents for at least seven years. After that, make sure to shred them rather than throwing away. They contain personal information that you wouldn’t want floating around.

While you’re at it, make sure all your files are backed up. Scan paper documents and keep them organized on your computer. Then, have your financial records backed up on an external hard drive. It’s not a bad idea to also back up your backups, whether it be another external hard drive or a cloud storage service.

Revamp Your Budget

Or maybe create a whole new one. Either way, give your budget a good, hard look throughout the last year and past couple of months. Figure out where the majority of your money was going and where you need to make cuts.

Do you have an emergency fund set up? Have a portion of your budget for a rainy day fund. You’ll want to have money set aside in case you lose your job or have a sudden emergency.

Review Investments and Insurance

You should always be looking at your investments and insurance. But set aside some time to go through everything thoroughly. Are you making or losing money and are your insurance policies still accurate?

Refresh your memory on proper ways to invest, or learn if you don’t already know. Investments can be a great way to keep cash flowing. It can also be a quick way to lose everything.

With your insurance policy, you want to make sure it is still covering all your needs. If you have a term policy, is it expiring soon? How is the cash value of your permanent insurance doing? If you are noticing concerns, speak with your insurance professional right away.

Set yourself up for success right at the beginning. Spring cleaning your finances can be challenging and downright scary. But by setting goals and allowing enough time to do it, you’ll be on the right track. Once you have a better picture of your finances, you’ll be able to get on track for future money goals.