Spring is here, and that means spring cleaning the house and putting away the winter clothes. It is also a good time for you to spring clean your finances. By getting things in order now, you will be in better shape when vacation time rolls around and for the rest of the year. Getting your finances in order takes a lot of worry off your shoulders so you can enjoy life a little more. Below, you will find different ways you can spring clean your finances starting right now.
5 Ways to Simplify and Spring Clean Your Finances
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Create a Budget
Before you do anything, you need to create a budget. This will help you determine how much you need to put in savings, how much needs to go toward bills, and how much you can keep for yourself. Even when tempted to deviate, it is imperative that you stick to your budget so you can reap the long-term rewards of better financial security. Keep in mind that it is okay to set aside from money for dining out and having a little fun. You work hard, so you can reward yourself. You might also want to consider getting a pretty budget planner to help you stick to it.
Direct Deposit Is Smart
If you’re not already having your paycheck direct deposited into your bank account, it’s time to start. This means not having to go to the bank and cash a check. Instead, the money goes directly to your account. You can then transfer some to savings or sign up for auto bill pay so bills are automatically paid when you are paid.
Automate Bill Payments
It can be difficult to find time to pay bills. Sometimes, life can get in the way and cause you to forget. It is also difficult to have money in your hand and then have to hand it over to your creditors. In fact, many people hate to see the money go and that causes them to prioritize some bills instead of paying them on time.
When you put paying bills on autopilot, the money never touches your hands. It goes straight to your creditors. You can then decide the most productive way to manage the remainder of the money. It’s wise to put a small amount in savings and keep some for yourself.
As for how bill payments are automated, the following three methods can put you on the right track:
- Talk to your bank – Many banks have bill payment services. You provide bill pay information to your bank, and it will pay your bills on your behalf. The money is automatically taken from your bank account every month and distributed among your creditors.
- Authorize creditors to deduct money – You can authorize your creditors to debit your account at a specific time each month. Most creditors allow you to turn this function on through their websites.
- Credit card bill pay service – Credit card companies also offer bill pay services. The credit card company or companies you choose to pay your bills for you function the same way as a bank’s bill pay service.
Automation has many benefits. The bills are paid while you spend your time doing other things. You won’t miss payments, you won’t have to deal with late fees just because you forgot to pay a bill, and you won’t have to worry about writing checks.
Know Where Your Credit Stands
Spring is also a good time to order a copy of your credit report. Make sure that everything on your report is correct. You can dispute any discrepancies that could be hurting your credit score. The credit report also gives you a good look at where your credit stands and how you can improve it. Automated payments will ensure all payments are made on time. If you see any debts that may require a higher payment to pay it down faster, notify your bill pay service so you can increase the payment amount. In my own experience, I am working to pay down my high cost private educational debt before my Department of Education loans. Once a quarter I try to map out my debt pay down priorities.
You need to have an emergency fund among other things. This means setting up a savings account that is only touched in emergencies. Deposit what you can afford every pay period and pretend it isn’t there. You can arrange for your employer’s direct deposit to automatically deposit into your savings account so you never see the money. Not seeing the money can reduce the temptation to spend it.
All in all, there are several ways you can clean up your finances for spring and the rest of the year. When you start a good habit and stick to it, you will notice that it gets easier. You will also notice that you will have more money to your name rather than living paycheck to paycheck. If you want some extra help, here are 7 money tips from the Bible.