Follow these eight tips to spring clean your household budget and get a fresh start on your finances.
Buff your budget.
Your budget needs to be reevaluated every few months to ensure it’s still in line with your family’s financial goals. Certain milestones that you experience throughout the year such as buying a new car, having a baby and even adopting a pet will impact your monthly spending and savings. Free budgeting tools can make the process much easier by linking your bank, credit card and other financial accounts in one place. Open a free account with Mint or another top budgeting tool.
Money is easily mismanaged when it’s all over the place. Simplify your finances by moving funds disbursed among several institutions into one or two accounts at your favorite bank or credit union. Savings sitting in a 401K from a previous first employer should be moved to a more appropriate investment that meets your target retirement. Don’t forget to list appropriate beneficiaries either so your funds don’t end up in probate.
Declutter your paper trail.
The paper cluttering your cabinets and desk drawers is causing more chaos than good, especially since most of these documents don’t have to be saved. For example, tax documents that are more than seven years old, bank statements from a year ago and monthly bills you’ve already paid all should go in the shredder. Hold on to insurance documents though. You may considering going paperless and create a file system using your email to stay organized and eliminate the paper trail altogether.
A cluttered handbag or wallet will cause you a lot of frustration when you need to find something urgently. Crumpled receipts and misplaced coupons can lead to missed savings, neither of which are great for your finances! Luckily, there are various apps designed to reduce this clutter while keeping such cash-saving resources at your fingertips. The OneReceipt app, for example, turns paper receipts into digital files for easy sorting, while CouponSherpa and Yowza provides instant access to grocery coupons on your mobile device and CardStard ensures you have access to store reward cards without all that extra plastic.
Sweep up debt.
Debt is the biggest obstacle holding you from achieving financial health and it’s a problem millions of Americans face. In fact, a recent report found that U.S. households carry an average of $15,762 in credit card debt. If you’re carrying revolving balance across multiple credit cards, review each account and tackle the one that has the highest interest rate to save more money over time. Be realistic with your debt pay-off schedule so you don’t get burned out and always aim to pay double or triple the minimum due. The ReadyForZero debt-repayment app is free and will help you track progress and keep you motivated.
Clear clutter for cash.
Purging your home of all the clutter you and your family have collected over the years will feel great and you’ll feel even better knowing that some those goods could be sold for cash to help pay off debt or put toward savings. You have several selling options that make it easier to cash in on this clutter: consign gently-used clothing at RecycleYourFashions; unload smartphones, tablets and video games at BuyMyTronics; and sell gift cards at Gift Card Granny or through a CoinStar kiosk at your local supermarket. Otherwise, host a yard sale to unload everything in just one weekend and earn a few hundred dollars!
Wipe down fees.
Useless fees go easily undetected and will cause a major budgetary leak over time. In fact, a recent report found that Americans wasted around $155,000 in pointless charges over their lifetime, from checking account fees to late payments to shipping charges. You can avoid such fees though with a few simple tweaks. Take the time to automate payments and set alerts so you never miss a due date, shop around for a bank or credit union that doesn’t charge fees, get cash back from a drugstore at no charge, and look for promo codes to save on deliver charges.
Not all credit card use is bad, especially those who rake in rewards effectively. However, consumers aren’t taking full advantage of these programs. Some 83% of consumers apply for credit cards at the wrong time and forgo thousands of miles or points, and around 16 billion dollars of rewards go unredeemed every year. Review and track reward points and redeem them to offset travel and gift costs.