Spring cleaning is simultaneously exhilarating and exhausting. The process of clearing out old ‘junk’ is reinvigorating and mind-easing, however it also feels like a drag. And many people feel the same about their finances, but organizing and simplifying your financial situation can help set yourself up for financial success.
Here are some tips to help you spring clean your finances:
Clean out your wallet
Starting with something simple to get the momentum going is usually a good idea. It’s nice to have a fat wallet, as long as it’s for the right reasons. I’m forever accumulating slips and cards in my wallet that don’t get used and either need to be stored more appropriately or discarded. (And yes, this includes loyalty cards with only one out of eight stickers.) It’s something most of us carry wherever we go; keep it light.
Break out the highlighters
It can be hard to visualise numbers and values when merely talking about it – so make it visual! This is a good financial review exercise that can be extremely eye opening.
Get your credit card statements from the past six months and three different color highlighters. Then use one color to highlight your necessary costs (utilities, insurance, groceries), another to highlight items you bought because you really wanted them (your Netflix subscription), and another to highlight less thoughtful purchases (those impulse retail therapy sessions).
This gives you an extremely visual representation of where the bulk of your budget lies and often shows ‘problem areas’ that could be better utilized. If you do this exercise every couple of months you can track how your spending has trended over time and determine some of your spending habits.
Create an ICE Folder
ICE stands for “In Case of Emergency”. Some people save contacts on their phone preceded by ICE (such as “ICE Mom”) so that a stranger would know who to call in the case of an emergency.
If you are the money manager of your household, would your loved ones know how to handle the finances “in case of emergency”?
An ICE folder is there to help them in such a case. This should include all of the info someone would need to manage your finances, such as your account numbers, login IDs and passwords, a list of bills you pay each month, investment and retirement fund info and anything else that would need to be handled in your absence.
Be sure to keep this folder, whether physical or digital, extremely safe. This isn’t the kind of thing you would want falling into the wrong hands.
It may be allergy season, but debt is nothing to sneeze at. If you feel like you need a financial review then let’s get in touch!
