Spring Cleaning for Your Finances
By Jillian Sarmo, Investor Education and Public Affairs Coordinator ~
Every year when the snow finally clears away and the grass turns green, most people start to feel the familiar itch to “spring clean” their homes. “Spring Cleaning” is a term that originally referred to removing soot and grime build-up in the home. Years ago, the primary source for heating a home all winter long was the fireplace. Warmer weather provided the opportunity to let in fresh air, and longer days motivated people to be more active. Even though modern technology and the lifestyles we lead today may not necessitate such extensive cleaning each spring, we can use the weather to remind us that we need to keep our finances fresh too. The following are some tips I gathered with the help of my counterpart at the Indiana Secretary of State’s Office on how to refresh and revitalize your finances this spring.
1. Check Your Credit Report
If you didn’t do it at the start of the year, now is a great time to take advantage of the one a year free credit report. Checking credit regularly can protect you from identity theft and help you maintain a good credit score. Flag any errors directly to the company where you obtained the report. Try not to obsess, but certainly use the free report you get every 12 months from each of the three reporting agencies (Equifax, Experian, and TransUnion). To request your free report, visit annualcreditreport.com.
2. Wipe Away Debt
The debt you have, the more you feel suffocated. It may be tempting to try to ignore or wish debt away, but this only makes things worse. If you’re finding yourself stressed, use a bill tracker provided by government agencies like the CFPB (Consumer Financial Protection Bureau), or a program like Mint.com to help you stay on top of payment due dates. Also, try contacting your lender to change payment dates or inquire about extended payment options.
3. Be Mindful About Spending
Mindless swiping online has reached epidemic proportions when it comes to spending. Take time to review what purchases you’ve made in the past few months (you can do this by reviewing credit and bank statements too). If you feel like you need to cut back, revisit those “wants versus needs” and consider using cash for purchases under $20 to help monitor credit spending.
4. Turn on that Autosave
If you find your budget presents opportunities to save more, consider designating a portion of monthly checks (whether paycheck or social security) for emergency savings. Starting or building on an emergency fund will be beneficial for unexpected household or health expenses.