Many of us are spending time “spring cleaning”. We’ve cleaned out the garage, the closets and the storage room. Hours have been spent cleaning out the flowerbeds and sprucing up the appearance of our homes – inside and out. But, how much time have we given to our finances? What have we done to clean and tidy up things around our money?
For most people, we do not spend our spring thinking about finances. The reality is we don’t spend much time at all thinking about our finances.
Like anything else, some preventive maintenance will help you manage your financial picture in a way that brings about less stress and more peace. You could spend many hours in your financial spruce up, but working on these few items now can help you manage your finances throughout the rest of the year.
1. Start a Spending Plan – Are you managing what you spend, living on less than you make and saving for the future, as well as any emergencies? By simply spending a few minutes at the beginning of each month and planning your income and outflow, you can learn to live on less than what you make while, at the same time, work to get out of debt and begin to build some wealth from our labor.
2. Avoid Credit – Begin today to cutoff off all credit – including the credit cards. Cut up the cards and begin a systematic approach to paying off the debt you have.
3. Bills Management – Are you managing your bills or are they managing you? Do you have too many due at one specific time of the month? Take a calendar and mark each day a bill is due in a typical month. From that picture, work with the companies to change your billing schedule to help improve your cash flow. This step will also help you manage to your spending plan.
4. Balance Your Accounts – When was the last time you balanced your checking/savings/brokerage accounts? Did you know that financial institutions make honest mistakes frequently? Your opportunity to correct those mistakes, while it varies by institution, is a very small window. Balancing your account against your statement(s) will help you stay on top of any issues and help you maintain an accurate balance going forward.
5. Investigate Your Insurance – Most of us feel like we are “insurance poor”. There is the auto, home, medical, life and more. But really, how much do you need? What are the right deductibles? You need insurance, but your need the right policies at the right price. Shop to make sure you have what you need, at the right levels, and at the best possible price.
6. Check Your Credit Report – Have you checked your credit report recently? Not only will you learn what you really owe, but you can also see if someone else is tampering with your identity. Checking your report, at least annually, will help you stay on top of your outstanding debt and help you monitor yourself against one of the fastest growing crimes – identity theft. Here is Georgia, we can obtain our reports twice a year at www.annualcreditreport.com .
7. Refinance – If you are in an ARM or interest only mortgage – get out! Rates are still low. Now is the time to refinance to a 15-year conventional mortgage. This will also help show you if you are in more house than you can afford!
As you can see, seven simple tasks can help you get started on getting your financial house in order and set you towards a financially successful year.