How About Spring Cleaning Our Finances Too?

March 02, 2021

It’s our favorite time of year – right?  Well at least it’s Marie Kondo’s favorite time, the annual spring cleaning of our closets, garages, refrigerators and other nooks and crannies. While it’s a great idea to purge all these places, this is a great time to add a new technique: a simultaneous house and financial cleaning.

It can seem intimidating but here are 4 easy steps you can implement that will make a big difference.

 1) Start with a Budget.  For many of us the “B” work conjures up feelings of sacrifice or giving up things we enjoy.  But there are different ways to look at budgeting.  If your goal is to build wealth then a budget is a good way to start.  Don’t think of it as sacrificing but as designing a life based on what’s important to you and making that a priority. For example would you rather spend $300 per month on satellite TV or stream just what you watch for $30. 

2) Sorting out your paperwork is great for spring cleaning both your home and finances.  Shred documents you no longer need.  For instance, the federal government recommends that you only need to keep bank statements for a year, and you can get rid of tax documents after seven years. Get shredding if you still have your tax returns from college!

3) Opt for less paper.  Almost every account whether checking, utility, subscription or loan have paperless billing.  Think of how clutter free your kitchen counter will be once you move to the paperless model.

4) Audit those pesky monthly charges.  Go through your bank and credit card statements and do an inventory of where and what you are subscribed to on a monthly basis.  You may be surprised how much you are actually paying on an annual basis.  Also, while you have your bank statements in front of you look for any recurring fees you’re getting charged by the bank.  There is no reason for you to pay a fee for the bank to have use of your money.  A $12 monthly fee for checking or $8 for savings, while not a lot is $240 per year that can be put to better use either by paying down debt or a deposit into an interest bearing account.

The final step to spring cleaning your finances is to actually save your saved money! Open a new savings account specifically for what you have saved every month.  Funnel that money, no matter how small into that account (make sure your bank doesn’t charge a fee) and watch how much accumulates in just one year.

Remember that “I want to be a millionaire” is a wish, not a goal.  Utilizing a good spring cleaning every year with a specific goal in mind is a great method to start your path to financial success.