The whirlwind of the holiday season has tapered down, and thoughts of spring cleaning your finances may already be on your mind.
It is good to re-evaluate your budget and spending habits several times a month, but sometimes that ends up being the last item on a full to-do list.
Follow these tips, and you could have a little extra spending money by year end:
1. Review All Accounts
This one may be a tedious task. It involves thoroughly reviewing all of your bank accounts. Making sure there are no fraudulent charges, “auto-pay” monthly membership charges or fees for services you no longer use.
For instance, if your bank charges you a higher fee to have an account that allows you to walk into the bank, but you only use an ATM, notify your bank. Or if your gym membership is going unused, but the fee continues to pop up month after month on your bank statement, consider cancelling.
Eliminate duplicate expenses where possible. For example, if you are paying for digital storage in more than one cloud service, try to consolidate.
2. Create a Stricter Budget
Next, it is time to review your budget by category. What do you allot yourself monthly for lunch, groceries, entertainment, and travel? Take a close look at your spending habits. Are you staying disciplined? Does your actual spending match your budgeted amount? Red line everything on your card statement that was an “excess” spend.
If you already have a strict categorized budget, then ask yourself if it is in line with your overall monthly income. Are you overspending on the whole? Do you put money away every month for retirement, emergencies and that tropical vacation you’ve been dreaming of?
Either way, track your monthly expenditures. Find a spreadsheet that works for you or consider keeping track of your budget in a financial diary. Pen to paper or keyboard to screen illuminates where overspending is occurring. This will help you with the process.
3. Review Your Credit Report
Did you know you are entitled to one free credit report each year from each of the three major credit bureaus? Take advantage of this and monitor your overall outlook.
Set up automatic bill pay to help avoid late payment fees and negative reports of late payment to the credit bureaus. This is especially helpful to assist in making minimum payments on time if you have on-going credit card debt.
4. Pay Off High Interest Debt
Make a plan to reduce your highest interest debt, starting with credit cards. Look into ways to consolidate debt into lower interest credit cards or loans.
Get your budget in better shape for the rest of the year by refinancing or paying off financed debt now. It may feel daunting at first to tackle, but once you start removing interest charges from your monthly expenses, you will see the how quickly the savings add up.
5. Organize Old Financial Documents
While you’re spring cleaning the house, you should take a stab at sorting through any old financial documents you might have accumulated over the years.
Keep only documents, contracts and receipts that are required. Clearly label the various accounts, policies and financial records for ease of access. Be sure to check with your accountant before you throw anything out that is tax related. Shred any financial documents with sensitive information that you choose to discard.
The materials on this blog are provided for informational purposes only and do not reflect the opinions of ChimpChange LLC or Central Bank of Kansas City, Member FDIC. Several of these blog posts may contain links to content on third party websites which are provided for your convenience; please note that linked sites may have a privacy and security policy different from our own, and we cannot attest to the accuracy of information. ChimpChange LLC and Central Bank of Kansas City do not guarantee nor expressly endorse any particular product, service or third-party content.