Spring Clean Your Expenses: 10 Budgeting Best Practices

From Everything Finance

Spring Clean Your Expenses: 10 Budgeting Best Practices is a post originally published on: Everything Finance – Everything Finance – Its all about Money!

Spring is usually around the time of year we start to lighten our loads with a bit of spring cleaning of our homes and closets. It is also a great opportunity to spring clean your expenses and give them a bit of attention as well. 

Decluttering your finances can come in many forms, from organizing your documents to better understanding and streamlining your budget. Not only can it help you get on track for financial success, but it will also help your overall sense of well-being. 

Here are 10 ways you can review and refresh your personal finance this spring::

Declutter Your Budget

Keeping track of your budget is the best way to stay on track with your financial goals. Use this spring to review your spending, income, and your savings over the past three months. Take a look at what is working and what is not working? Take any lessons learned and apply them moving forward.

A clear and updated picture of your finances could be the reality check you need to commit to a budget. Consider using a budgeting app to help you keep organized. 

Create Your Budget Before the Month Begins

One of the best ways to spring clean your expenses staying is by planning ahead. I usually start planning my next month’s budget at least one week before the new month begins. For instance, you may have a car registration tax dues one month, but not the next. Once you’ve planned your month, you are better able to set a realistic budget. 

Set up Automatic Payments

Automatic payment is a great way to manage your money. Look at all of the monthly expenses you elected to keep and sign up on online banking to have the bills automatically paid from your bank account by their due date. 

Of course, this only works if you actually have money in your account to pay the bill, so consider using one of your bank or credit union accounts (like a free checking account) solely for this purpose

Do a Subscription Clean-up

If you have so many recurring subscriptions that you can’t even remember them all, Netflix, Prime, Hulu, car wash, massages, it could be time to pare down. Today, you can find a subscription for just about anything and for some products and services, it may be the only path to purchase.  Evaluate whether they are worth what you get out of them, then cancel the subscriptions that do not make the cut.

Keep Bills and Receipts Organized

Keep your bills and receipts organized in case you need to refer back to a bill to dispute it. This may also come in handy for tax purposes. You can choose to file physically via hanging files or expandable folders. If you do this, sort your documents by month or by account whichever makes more sense to you. If you receive your bills and receipts mostly via email, you may want to file everything electronically.

Consolidate Retirement and Investment Accounts

If you have multiple retirement and investment accounts, you might think about combining your 401(k)s, IRAs and other accounts accumulated over the years. Consolidating your accounts include; A simplified view of your portfolio and financial outlook, lower transaction, administrative and other account fees and easier tax preparation and retirement planning

Check Your Credit Score

It’s also a good idea to check your credit score to ensure there are no errors or wonky details that may be raising the interest rates you are paying. There’s a common misconception that checking your credit will lower the overall score, but looking into your own report is considered a “soft” check and should not change your credit score

Consolidate Your Accounts

Many have had success using multiple checking accounts to keep things organized. For example, having a separate checking account for fixed expenses like rent and car payments makes it easy to see the money you have to spend every month on more flexible categories of your budget like food.

Shred Old Financial Documents

The IRS recommends keeping tax returns and other important documents for at least seven years after you file the return. Go through your tax files, shred older files and create a system that keeps your paperwork organized so it is easily accessible. 

Wipe Out Bad Spending Habits

We waste a lot of money every month on impulse and habitual spending. These expenses feel small at the moment but add up to thousands of dollars every year. Cutting out bad spending habits now can make a big impact on your future.

Go through your bank statements and calculate how much money you throw away every month on habitual and impulse purchases. Try to cut down on these purchases by 10% every month or experiment with giving them up altogether for a season.

Bottom Line

You don’t have to wait until this time of year to spring clean your expenses and organize your money and finances. These 10 steps can easily be applied year-round when you need a fresh start. 

Spring Clean Your Expenses: 10 Budgeting Best Practices is a post originally published on: Everything Finance – Everything Finance – Its all about Money!

This post was published on Everything Finance