SPRING! My favorite season of the year. I am very stereotypical in that I give my house a thorough cleaning everytime spring rolls around. I get inside every groove, every nook and cranny, and I clean things I haven’t touched all year. I organize my drawers and closets in order to purge items that are no longer of any value to me. When I’m done, everything seems to have a renewed sense of freshness; ready to handle whatever the year brings.
I even spring clean my finances. Just like our houses, we need to take the time, at least once a year, to take a good hard look at our finances to see what changes need to be made, what should be thrown out, and what we can do to move them in a more positive direction. Allow me to share with you five things I look for and do every Spring to help me clean out and clean up my finances.
1. REMOVE WASTEFUL SPENDING
How many of us have subscriptions that we simply do not read anymore, or closets full of stuff we don’t wear? We all tend to make impulsive decisions throughout the year. Spring is a good time to examine everything to make sure we aren’t paying for something that no longer brings value. Take the time to cancel subscriptions you no longer use. Have a yard sale to clear out the closets and drawers. Use this opportunity to reset and undo the impulses of the past year.
2. REVISIT RETIREMENT FUNDS
Our retirement accounts and investments are another area where we tend to autopilot. We trust our financial advisor, so why not just sit back and do what they say? This can be very dangerous. Now is a great time to set up a meeting with your advisor and discuss all of your accounts to make sure your funds are continuing on the path to help you reach your goals. You may not be savvy in this area, but hopefully your financial advisor is a good teacher who can explain what you have, and will walk you through options until you are satisfied with the direction of your retirement savings.
3. SHOP AROUND
Speaking of not wasting money, many people are overpaying for products and services like bank fees, insurance, cable, phone, etc. Now is a great time to do a little shopping around, seeking to find a lower price somewhere else. Many companies raise their rates a little every year. Those little raises can add up quickly. We all have a habit of putting these expenses on autopilot. Now is the time to take back control and shop around. I think you will be surprised at how much you can save every year.
4. REVIEW TAX FORMS
Not only is spring a time for cleaning, it is also when we file our taxes. I want to let you in on a little secret: a tax refund is not a gift from the government. It is, in fact, your money that you allowed the government to borrow at 0% interest for 1-12 months. Many of you could have used that money to help with your monthly budget. However, you decided to let the government hold it and give it back to you in one lump sum. I recommend keeping your money for you and only giving the government what you owe them.
HERE’S WHAT YOU DO: Odds are, when you filled out your W-4 with your employer, you filled it out with your actual scenario. For example, if you are married and have two kids, that is what you put down. However, this information will always get you a refund. The truth is you can put whatever information you want on your W-4. The IRS has a cool tool called the withholding calculator. Using this, you can get the exact information that needs to be filed on your W-4 and in most cases, come within $25 either way of what you owe. I recommend checking this at least twice a year just in case something changed. (You can change your W-4 with your employer as many times as you want). The ideal situation is for you to pay in exactly what you owe – you don’t owe them, and they don’t owe you. This way, you get to keep your money every month to use as needed.
5. EXAMINE YOUR FINANCIAL REPUTATION
Your credit report is your financial reputation. It shows everyone how you handle your money. If you want the best reputation possible, it is imperative that you make sure everything on your report is accurate. You can receive one free credit report from each reporting agency each year – Equifax, Experian, and Transunion. All you need to do is go to www.annualcreditreport.com and follow the instructions to receive your free credit report. Once you receive it, go over it with a fine-toothed comb – making sure that everything is 100% correct. Should you find an error in your report, simply dispute the item with the reporting agency directly on their website. Your reputation is important all year long so make sure you take the time to look at your report once a year in order to keep it as accurate as possible.
DOESN’T SAVING MONEY MOTIVATE YOU TO SPRING CLEAN YOUR FINANCES?
One of the biggest keys to being successful in any area of life is simply to pay attention. What we water and feed is what grows. God has blessed us with so much. Take the time this spring to show Him what a great steward you are and how grateful you are for His blessings.