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Spring, with the new blossoms and fresh grass starting to turn from brown to green, it’s a very good time to consider getting your financial house in order with a spring clean of your finances.
Just like your home, you’re probably loving and hating the idea.
I know, I get it, you’d probably rather be outside in the sunshine. But there’s nothing like a deep down spring clean to make your home look fabulous.
And the same goes for your money!
So if you have slacked off on your goals to get your money in order, guess what? Now is the perfect time to start over.
10 Ways To Spring Clean Your Finances
1. Rid Yourself of Money Clutter
Before you begin on the tangible aspects to spring clean your finances I want to touch on the mindset issues of your finances – money clutter.
So what is money clutter? Money clutter is money issues that are not handled promptly or efficiently and with great angst or emotion.
It’s avoiding paying your bills on time, having an awkward conversation with someone who owes you money, or not looking at your bank or retirement statements. But most importantly it’s avoiding anything that keeps you stuck in negative thoughts and feeling around money. This money clutter begins to pile up physically in the form of bills and receipts, but it takes up emotional space as well filling your head, heart, and spirit with an enormous weight.
Action Step: Take a moment to write down all the areas in your finances that are causing you concern. Make a commitment moving forward that you’ll tackle these areas so you can free yourself from the worry, guilt or any other negative emotion you’re feeling.
2. Put Your Bills Somewhere You Can Find Them
Let’s talk the practical ways to spring clean your finances and it starts with your bills.
Do you have bills piled up on your kitchen counter or strewn about your home or office? If you don’t have one specific place to put your bills, then you are experiencing money clutter. Not having a designated area to put your bills is usually because of avoidance or guilt. When you have them sprinkled everywhere, you can’t see the bills, can you?
They’re stuck under papers and when you find one you exclaim, “Oh my gosh! There’s a bill!” That’s avoidance.
If you when you walk by your kitchen counter or dining room table and see the bills and say to yourself, “Oh yes, I need to pay bills,” or “Gee, I hope I have enough money to pay the bills,” then you’re experiencing guilt.
No matter what it is, it’s not okay. It’s money clutter. It’s taking up space and energy, and it’s robbing you of your peace of mind.
Action Step: Pull out all of your bills. Create one folder and label it “bills to be paid”. Then go to your house, car, office, and pocketbook – wherever you’ve left your bills and put them in the folder. This sounds very simple, and it is, but it’s also something most of us have never done.
Have one place where you put all of your bills to pay. When the bills come in, put them in your folder.
3. Pay Your Bills At The Same Time Each Month
Most people don’t pay their bills with any regularity. They pay their bills when they think they have the money, or at random times in the month.
If you don’t pay your bills at the same time each month, then you are experiencing money clutter.
This form of money clutter creates chaos and drama. The reason it creates this upset is because of the energy being spent on juggling, remembering and worrying.
Action Step: The action here is very simple: to make a decision. When you make a decision, you are taking responsibility and control of your money situation.
How often are you going to pay your bills? Once a month, twice a month or more frequently? Right now the frequency doesn’t make a difference. What matters most is that you make a decision.
Next, I want you to decide on the date you will pay your bills. If you are paying twice a month will it be on the 1st and 15th or the 5th and 25th? Pick a date and write it into your calendar or whatever you use to remember important things. Now schedule it out for the remainder of the year.
Let’s say you want to pay bills twice a month, and it will be on the 5th and 25th. You’re going to go into your calendar system and on the 5th and the 25th for every month for the rest of this year; you’re going to mark on that date – “pay bills.”
On that day, pull out that folder marked “Bills To Be Paid” and pay your bills. Each time a new bill comes in put it in your folder so when the day comes to pay the bills it will be right there waiting for you.
4. Create A Filing System
If you’ve never created a filing system, now is the time to do so.
I have one drawer in my home that contains all the necessary documents my daughter would need in case of an emergency. It includes my will, trust, a power of attorney, health care proxy, medical insurance paperwork, all financial statements from banks and other institutions, and a list of passwords for all accounts.
If anything were to happen to me, she would be able to figure out who to call and what to do.
The only exception to this is anything having to do with this years taxes. Receipts and important information is filed in a portable Pendaflex folder.
Action Step: Get some file folders, markers, stickers, anything to get you motivated to create a filing system that makes sense for you and your family.
5. Check Your Spending
How’s your spending plan doing? Are you on track?
Wait, you don’t have a budget? Well, now’s the time to create one. It’s a necessary tool if you want to spring clean your finances.
How will you know how you’re managing your money if you don’t have a spending plan?
Action Step: Sit down and create your budget for May. I’m giving you almost an entire month to develop a spending plan. You can do it!!
6. Make Savings Automatic
Even with debt, you should still be putting something aside into a savings account. Preferably, you’ll have money taken out of your checking account automatically and put into a savings account that you’ve sworn not to touch.
Action Step: If you still haven’t set up an automatic savings account, do it now. You’ll be amazed how much it will add up over time.
7. Check Your Credit Score
Unfortunately, the majority of adults in America don’t review their credit report. By law, you’re entitled to order one free credit report yearly from each of the three major credit bureaus. You can get yours at no cost from annualcreditreport.com.
Check your credit report to ensure they are free of mistakes. If you find an error, request that it be corrected. The Fair Credit Reporting Act along with the company that provided the information are responsible for correcting errors.
Action Step: Get a copy of your credit report, review and report inaccuracies.
8. Make A List of Who Owes You Money
If you were to sit down and think about the question, “who owes me money” who would be on the list? Most of us have someone who owes us money. It might be a friend or relative, a store credit, or even a bartered service that has yet to be claimed.
This is money clutter because it feels unfinished, unresolved, messy and complicated and something you’ve been avoiding.
Action Step: I want you to write down every company or person who owes you money and the amount they owe. Then contact each of those businesses or people and find out where your money is.
9. Gather Up Unused Gift Certificates and Gift Cards
Look around and collect all the unused gift certificates and cards you can find. I had a client who when she gathered up all of her unused gift cards and gift certificates she had over $3000. She even found some checks from customers that were so old she couldn’t cash them any longer. She wasn’t wealthy. In fact, it was just the opposite.
If you are sitting there thinking, “I’m saving them,” then my question is, “For what?” The act of saving these gift cards come from a belief that if you spend them, you will never get any more. It’s coming from a place of fear. This is an issue around security. If you’re somebody who just doesn’t pay attention, and you have cards lying around because you’re not giving a lot of attention to it, that’s a different issue.
Action Step: I want you to spend these gift certificates within the next seven day preferably on yourself. If you have the urge to hold on to them, ask yourself, “What am I holding on to them for?” Release the fear and spend them!
10. Clean Out Your Wallet
Eight out of 10 people, particularly women, cannot close their wallet properly because they are too stuffed. When examined more closely, their wallets are old and raggedy too.
Action Step: Clean out your wallet! File away receipts or give them to your bookkeeper to handle. Throw away old receipts that are not necessary to your taxes and bookkeeping. Keep only what you need to keep in your wallet so that it closes properly.