Spring is finally here and it's brought with it some beautiful sunshine and weather, new plants and flowers, and an overall feeling of freshness. With all the new growth and fresh feelings of Spring, it's no wonder that it's the time of year we all get the itch to clean.
Each Spring we take the time to clean our homes, garages, cars, and possibly even our offices. But for some reason, most of us forget to Spring clean our finances. Luckily Spring is also the end of tax filing season, which is when most people have the best handle on their financial position all year. Take advantage of it this year by Spring cleaning your finances and getting them whipped into shape right alongside everything else in your life.
It's smart to re-evaluate your budget at least once a year if not more. A budget requires a lot of work at first as you figure out how much to allocate for each category, like grocery spending, gasoline for your car, etc. but after a few months with no big changes, we all tend to operate on auto-pilot.
Operating on auto-pilot is completely natural and it can be a good way to save you some time. But sometimes auto-pilot isn't the best way to handle your finances, especially if you are working toward a big goal like getting out of debt or saving up for a down payment on a new house.
Take a few minutes this spring to review your budget and make sure everything still makes sense. For instance, if you no longer use you gym membership as much as you used to, now is the time to cut it from your budget.
While you are examining your budget, it's also a good idea to take a closer look at your bills. Sometimes they have a habit of creeping up over time and it might be hard to notice at first if you are still operating on auto-pilot like we discussed above.
This month I noticed that my cell phone bill went up about $.50 per month. That may not sound like a lot, and it really isn't, but since I first signed up for my service my bill has creeped up about $3 per month. Usually it's $.50 here and $1 there, which makes it harder to notice. But since I haven't changed anything about my service since I signed up in November 2013, I'm going to call and ask about my bill tomorrow.
Since I'm in my early 20's, I have a bit of a "set it and forget it" method of investing for retirement right now. I contribute to my employer-sponsored 401(k) with every paycheck and it goes into the funds I designated, but other than that I don't think about my investments very often.
A "set it and forget it" method of investing isn't all bad, it keeps you from micro-managing away potential profits, but on the other hand it's a good idea to check in on your investments once in a while. Spring is when I usually go over my 401(k) investment plan with the HR department and I also set up an appointment with my advisor to look over my IRA too.
There are lots of other things you can do to spring clean your finances too, but these are the big three I usually try to tackle in April or May.
What do you do to spring clean your finances?