I know you are eager to start your spring cleaning, but put that aside for this week and clean up your finances first. Even if you don’t think your finances are in a mess, take a look anyway. It’s always a good idea to look through them at least once a year and this is the perfect time with taxes right around the corner.
Here are a few pointers to help you jump start your spring cleaning and clean up your personal finances.
Start now. Don’t put it off another second. I don’t mean that you have to stop what your doing right this minute, but you do need to schedule a time to sit down and examine your finances. If you are in a relationship this should involve your partner as well.
Identify your goal. Why do you want to clean up your personal finances? I don’t care if you are a trust fund baby and don’t have to worry about budgeting, you should still know how much money you have and what you are doing with it. Otherwise you risk losing money. Setting a goal will help you hold onto your money and allow you to find a way to use your money to benefit you.
Compile all the right documents. This should be easy these days since everything is electronic. Make sure you have everything in front of you. It’s a great time to do this since taxes are coming up!
Make a budget and stick with it. Some people do well with fancy software and spreadsheets, others do fine with a weekly allowance. Experiment with a few options and don’t give up if one way to budget doesn’t work for you. Personally, I don’t like software and spreadsheets anymore. We used them for a few years to jumpstart our budgeting and now all we need is to check out account daily and pay off the credit card weekly. Do what works for you, not what works for someone else.
If your in debt, make getting out your #1 priority. Stop saving for other things you want to do. Your new purse and wardrobe can wait and so can that vacation. I’m a big fan of the Dave Ramsey snow ball approach where you pay off your smallest debt first while making minimum payments on all your other debts. Then move onto the next smallest debt and so on creating a snow ball effect where you have extra money to put towards your largest debts. The idea is that you create a small victory for yourself and your more likely to stick with the goal of becoming debt free.
Start saving now. Put the same percentage of your paycheck into savings every single month. You never know when you will need that extra cash. Ideally, you should have at least $1000 in savings at all times.
Once you are on your way out of debt, save for the big things like retirement. Meet with a financial advisor and plan for your future.
The main thing you need to do is confront your fears about your finances. Take action today and start cleaning up your personal finances.