Spring Cleaning Your Finances
When the thought of spring cleaning comes to mind, people typically think of the nicer weather, the open windows, and the opportunity to spring clean the house and purge things that are no longer being utilized. In addition to spring cleaning the house, it’s also a great time to spring clean your finances and check in with your financial wellbeing. Spring cleaning finances can mean different things for different situations, but below are some of the more common ways people ensure they are staying on track.
1. Start with the obvious, clean out your house. Throughout the year, it’s so easy to accumulate clutter. Living with clutter can have negative effects on your physical and mental health through feelings of stress, fatigue, and depression. It can contribute to poor sleep and poor eating habits. By tackling this clutter, you’re able to put yourself into a fresh state of mind which can help you keep on track financially. It can be a daunting task, but is easily started by separating under utilized items into three piles: garbage, donate, and sell. Between Facebook Marketplace, Kijiji, and other mediums, it’s quite easy to sell used electronics, children’s toys, clothes, and décor. Proceeds can then be put towards debt payments, or topping up emergency saving funds if needed.
2. Clean out any unnecessary paperwork that was acquired throughout the past year. The majority of households have a place within the home where all paperwork is stashed, whether it’s a filing cabinet, nightstand drawer, etc. Any paperwork that is no longer applicable should be shred. Any that you may need to keep should be organized and tucked away in a secure location. There are 5 financial documents that you should always consider keeping: pay stubs, notice of assessment from CRA, investment statements, life insurance policies, and proof of final payment of a debt.
3. Check in on the financial goals you set at the beginning of the year. Hopefully you would have set a mix of short, medium, and long-term goals for the year. This might include establishing your emergency fund, reducing debt, saving for a vacation, saving for a down-payment for a home, working on your retirement fund, etc. If you have not set goals, it’s not too late to do so now! While spring cleaning your finances, now is a perfect time to review and revise the plan if needed. If there have been any changes to your career, or family situation, changes might be required, or it might be necessary to set new goals.
4. Review your monthly budget. If changes have taken place to your income, debts, or financial goals, reviewing your monthly budget can be an imperative step. You want to ensure all regular expenses (mortgage, cell phone, hydro, etc.) and irregular expenses (birthdays, holidays, etc.) are included so there are no surprises as your year progresses.
5. Cancel any unused or unnecessary subscriptions. Make a list of all the monthly subscriptions you have. They could vary from video streaming services, to music streaming services, gym memberships, cable tv, cloud back-up services, etc. If you find you are only using the services once or twice a month, it might be worth it to consider if the subscription is really worth it. If you decide it’s not being used, the money saved to be re-worked into your budget to pay down debt quicker or add to your emergency savings fund.
6. Review your credit report for errors. To get the most accurate version of your credit report, consider going right to the source, Equifax. Equifax offers both an online report, and one by mail. Once you have a copy of your report, it’s good to not only know your score, but to review your report for any errors that may have occurred. If there are errors, you should be able report it by filling out the “Dispute something on my Equifax report.”
If spring cleaning your finances has left you overwhelmed by finding you aren’t as on track as you would like, or too overwhelmed by debt to have put any of the previous steps into place, consider looking into your options to get you on track!
If you are looking for advice, or a second opinion about your debt, it does not cost anything to talk about your options. Every financial situation is unique and viable options can differ from person to person. A conversation free of judgment and cost, is the first step to determine options for debt that make sense for you. For a free consultation, please call or text (506) 645-1814 or email jaime@tackledebt.ca; or visit www.tackledebt.ca.