Annual Tips to Freshen Up Your Finances and Enjoy More Peace of Mind
There’s something about saying goodbye to winter and welcoming the warm promise of spring that inspires us to leave behind the things that may no longer be serving us. As you embrace a new season on the horizon, keep in mind that it’s a great time to think about freshening up your finances. So, reconnect with your New Year’s resolutions, reassesses your financial situation, and get rid of the things you no longer need – especially those that don’t serve your financial goals. The seven tips below will help you get started.
#1. Get Organized
Spring cleaning is all about getting organized, and consolidating your financial accounts can be a helpful way to organize your finances. It makes tracking and managing your money much easier, not to mention you’ll have less account information and fewer tax documents to review and prepare for tax season.
Start by making a list of all the accounts associated with your finances, along with all necessary account numbers, login details, and contact information for each account institution. As you create your list, look for ways that you can consolidate or cut out certain accounts you don’t use anymore, which may be generating extra tax documents, unwanted fees, and unnecessary statements. For example, if you have an orphan 401k from your last job that has been sitting untouched, now is the time to do something about it, like roll it over into an IRA.
#2. Declutter Your Budget
Another useful way to spring-clean your finances is to go over your bank statements from the past few months to see where you may have been spending money unnecessarily. Pay special attention to any subscriptions and recurring charges that you see. Perhaps there’s a subscription to a streaming service you no longer use or a magazine that you no longer read. End the membership or subscription for anything you see that is no longer useful to you. These may seem like small charges, but subscription costs can add up quickly and dig into your finances in ways that are hurtful to your financial goals in the long run.
#3. Trash Convenience Apps
Technology has made our lives more convenient in many ways, but often at the cost of poorer finances. For example, think about the food and grocery delivery apps on your phone. While they may save you time, they are costing you sometimes double the amount you would pay for picking up the items on your own. This spring, delete shopping apps such as Postmates, Uber Eats, and Doordash, and make an effort to pick up your own food and groceries and cut down on paying exorbitant fees.
In a similar vein, unsubscribe from promotional newsletters, emails, and texts that tempt you to spend. Impulsive buying can pose a significant threat to your finances, so take measures to avoid opportunities to fall into marketing traps.
#4. Check Your Credit Score
This little number plays an important role in your overall finances. Even if you think you know your credit score, it’s a good idea to get a full credit report once per year to ensure that what’s recorded in your file is accurate. It’s not uncommon for consumers to find discrepancies, so look through yours to ensure that everything matches up with what you know to be true. Legally, you’re entitled to three credit reports per year, one from each of the three reporting bureaus – Experian, Equifax, and TransUnion. You can go directly to the bureau to request a report, or the federal government has authorized AnnualCreditReport.com to provide you with annual access to free credit reports.
Related Article: Three Retirement Planning Resolutions to Make in the New Year
#5. Freshen Up Your Beneficiaries
If there have been recent changes to your finances – maybe you opened a new IRA or 401k or experienced a life transition like getting married or having a new grandchild – be sure that your beneficiaries on any of your accounts are updated, as well. You want to stay on top of your beneficiaries because if something unexpected happens to you, you’re going to want peace of mind in knowing your wishes will be honored. Keep in mind that your will does not override beneficiary designations so it’s critical to update them to reflect any life changes you experience.
#6. Minimize Your Service Rates
When you think about what impacts your finances most, don’t forget the monthly charges you’re paying to any number of service providers. As you spring clean your finances, try calling your internet, cable, and cell phone providers to see if they can offer you discounted monthly rates. Many companies will let you negotiate if you mention lower rates from competitors – and if they don’t, look into switching providers. You can also talk to your credit card company to see about getting a lower annual percentage rate (APR).
#7: Be Intentional with Your Spending
With the ease of purchasing just about anything you’d like online these days, your social media feeds are likely getting flooded with targeted ads. This can make it quite difficult to curb impulse spending but creating a 24-hour rule for yourself may help. When you see something that you want (but don’t need), force yourself to wait 24 hours before actually making the purchase. If you still feel good about purchasing the item the next day, compare prices from different shops first to ensure you get the best deal.
Set Yourself Up for Success by Spring Cleaning Your Finances
Embrace the spirit of renewal that accompanies the spring season by taking the time to review your finances and make helpful changes. Freshening up your finances in this way allows you to proceed through the rest of the year with peace of mind knowing that you’re standing on strong financial ground.
If you’d like to discuss more ways to strengthen your financial plans, contact Alphastar Wealth by emailing firstname.lastname@example.org, or to schedule a complimentary discovery call, use this link to find a convenient time.
Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.