Andrea Woroch is a national expert who tackles issues that directly impact consumer spending. As someone who was once swimming in credit card debt, she can relate to consumer money meltdowns and budget woes, but also she knows what it takes to come out on top. Andrea has shared her money tips with such leading news outlets as The New York Times, NBC’s Today Show, CNNMoney and many more, and in today’s guest post she is sharing some advice on how you can spring clean your finances.
If the thought of spring cleaning your home is overwhelming, why not turn that energy towards your financial situation and make sure everything is in order. With just a little time and effort, you can shape things up and enjoy some peace of mind. Here are my 11 tips to spring clean your finances.
- Organize Bank Accounts: Streamline your online statements and bill payments. Toss out old statements and checks, then consolidate your accounts at one or two institutions. If you’ve moved or found better service and rates at another bank, you might have left some cash behind in an old account. Close them out and move your money to where it will work for you, before bank fees throw you into overdraft status.
- Review Investments and Retirement Planning: This includes updating beneficiaries, and/or re-balancing and consolidating accounts. Move old 401(k) accounts into one at your present place of employment or move them into a self-directed IRA through such mutual-fund companies as Fidelity or T. Rowe Price.
- Clear Up Debt: Get over that holiday hangover by wiping Christmas debt off the books. Credit cards carry the highest interest rates, so they’re the first debts you should tackle. Then, try to buy gifts throughout the year to avoid end-of-year purchasing binges, or commit to budgeting more effectively come November.
- Slash Your Spending: Once you’re on track to reduce your debt, cultivate good spending habits to ensure you’re not paying down debt again next year. Use coupons where you can, and buy gift cards at a discount from such sites as GiftCardGranny to save instantly on gifts and everyday purchases.
- Adjust Tax Withholdings: If you’re receiving a big tax refund this year, you’re withholding too much money from your monthly paycheck or quarterly payment. Don’t let the government play with your cash all year; make that cash work for you now. Use the IRS’s 2012 Publication 15 as a guide to adjusting your withholdings, or discuss this with your tax professional.
- Review Monthly Bills: Look for areas you can trim. You can save up to $50 per month by simply canceling your movie channels. It’s a lot cheaper to download or stream films, and you’ll have access to your favorites much faster. Or you might just read more books.
- Organize for 2012 Taxes: Instead of tossing all your receipts into one shoebox, set up a filing system to separate health-care forms, travel records, 401(k) contributions, etc.
- Meet With a Financial Expert: Get some professional help to go through your IRA, 401(k) and 529 College Savings Plans to understand where all your money is going and whether it’s working for you. The Wall Street Journal offers some good advice on how to select a financial adviser.
- Review Your Budget: Even if your income hasn’t changed, spring is a good time to look over your budget and see if it still works for you. Or, if you’ve put off creating a budget, now is the time to establish where you’ll spend your money and how much you can sock away for the future. Kiplinger has an easy budget form to get your started.
- Address Estate Planning: Create or update your will or trust. Look into setting up a living will and power of attorney, should the unthinkable happen. Destroy old documents so there’s no confusion when you’re gone.
- Update Insurance Policies: Call around or surf the Net for new quotes on car, home and life insurance policies. Update the beneficiaries on your life insurance. Rates have gone down of late, so you may be paying much more than you should.