Spring cleaning? You probably do it every year. Clearing out old junk from the garage and retiring clothes that simply won’t make it another year (and probably shouldn’t). But so often people neglect the type of spring cleaning that they should focus on most; their finances! Spring cleaning your finances is an excellent way to stay up to date on your savings progress while giving you confidence towards understanding your financial path to freedom.
Know Where You Stand
If you don’t know where you stand with your money, you won’t be able to accurately measure your progress. From rate changes to market fluctuations, there are many different factors that can affect your money. If you haven’t been paying attention to your financial situation, you might be surprised to see how things have changed. Don’t be caught off guard and don’t let your finances dwindle from carelessness. Knowing where you stand financially is the key to keeping your finances in good order.
Set Realistic Goals
Being optimistic with your money goals is a great, but you also need to be realistic. Creating monumental, life changing goals is a practice many people seem to abide by with each new year, yet most never stick with their goal for more than a few months. Instead of trying to make leaps and bounds of progress with your finances, create a long-term plan you can actually stick to. Being able to accomplish small goals for yourself will give you the courage and determination to continue striving for success.
Build an Emergency Fund
If an emergency were to happen, would you be able to survive financially? According to a recent Federal Reserve report, 44 percent of Americans couldn’t cover a $400 emergency expense out of their pocket. When you’re not financially prepared for an emergency, all it takes is something like a sudden car repair or burst pipe to cause you to slide into debt. In order to handle those unexpected expenses, stash away a small amount of money from each paycheck into an emergency fund. Even if it’s only $20 at a time, the money will continue to grow and come in handy when you least expect it.
Get Rid of Clutter
The last step to your financial spring cleaning is to get rid of anything you don’t need! However, don’t just toss away old documents into the garbage. Make sure you don’t toss something that has important information that you don’t want strangers seeing. Instead, shred any and all paperwork with personal information that you don’t need to guarantee you’re done with it once and for all (keep an eye out for upcoming shred days at our branch block parties).
Happy spring cleaning!