After all the cyclone bombs, freezing rain, floods, and blizzards, just about everyone is ready for spring. Spring means a lot of things: taxes, spring cleaning, gardening, and spring break, to name just a few. In this blog post, we’re going to talk about spring cleaning your financial life.
The 2018 tax season is just about over. Hopefully, you have already filed your return, maybe even received a refund. If not, you have a little less than a month to get organized. See here for some last-minute filing tips.
If you anticipate a big refund or already received a big refund (which you put into savings or debt reduction), then one spring cleaning task is to redo your withholding statement. Why make a loan to the federal government? You need more money in your paycheck, so you have more money to put toward savings, paying the bills, and getting rid of debt.
How are you progressing with your debt reduction goals? If you’re not as far along as planned, now is a good time to spring clean your goals and strategies. What prevented you or is slowing you down from reaching your debt reduction goals? Will it continue? If so, you need a new plan.
Spring Cleaning Your Budget
Hopefully, you’ve been using a budget app, money tracking app or some digital way of organizing your income and expenditures. How are the results matching up to the budget you created in January?
You may need to do some spring cleaning to your budget—make adjustments to spending categories according to your real-time financial information. Did you get a raise in the first quarter of this year? Great! Adjust your budget to reflect your new income level. Now you have more to put toward your savings goals or debt reduction plan.
Have you started your emergency savings account yet? If not, review your budget again and determine how you can funnel a stream of money to an emergency savings account. Ideally, your emergency fund should be around six months of your living expenses.
How about plans for the summer and upcoming holidays? Perhaps you have some special events such as weddings or graduations. Have you started to save for those expenses? Part of your spring cleaning should be setting up the savings accounts you need to meet your 2019 financial goals.
The one good thing about tax filing season is that it does require you to organize all your financial documents. Now that you have everything in one place, sort out what you need to save and what can be discarded. Be sure that anything you discard is shredded. This is a good time to digitize your financial data. If you are still receiving paper bank statements, for instance, sign up for paperless statements.
If you haven’t already done so, a part of your spring cleaning should be to check your credit report. Your credit score determines so many things, such as financing, renting or buying a home, gaining employment, auto financing and so much more. Your credit score should be a true reflection of your credit history.
You are entitled to one free credit report from each of the reporting agencies. Make sure there are no errors or evidence of fraud. If you find errors report them right away.
Experian Boost will add your utility payments when determining your credit score. UltraFICO will look at your banking history when calculating your credit score.
There is some risk involved since you are giving permission to the credit reporting agency to collect additional data on you. But, if you always pay your monthly bills on time and have a good history with your bank, signing up for these programs could be a very easy way to boost your credit score.