Springtime arrived two months ago and believe it or not summer is just around the corner. Did you take a stab at spring-cleaning this year? Did you root through your closets, sort through your drawers and clean out those lingering dust bunnies? When you think about spring cleaning you probably focus on mopping, sweeping and purging unwanted possessions from your home, but after you get your house in order its time to turn your attention to your money. It’s just as important to spring-clean your finances, as it is to spring-clean your home.
Here are a few key steps to get you started.
Review Your Expenses
This is a great time of year to hunt down your credit card statements and begin the line-by-line evaluation of your expenses. Carve out a quiet time of day to sit down and review each and every purchase. Categorize your discretionary expenses, tally up your totals and ask yourself some hard questions about the money you spent. Did you go out to eat too many times this year? Did you spend too much on clothing and accessories? Reflect on your purchases and ask yourself if you would buy the same things again. Take notes while you review the figures and decide which areas are worth the expense and which you should cut back on.
Analzye Your Credit Card Options
Let’s face it most of us prefer to use credit cards over cash these days. Why drag along a wad of money in your wallet when you can carry one simple, very clean card? While reviewing your credit card statements take a look at the rates, terms and rules of the cards you currently own. Maybe you signed up for a cash back credit card or a store card that provides points for each dollar spent, but when is the last time you reviewed the rates and terms of those cards and what can you do if something changes with your credit card rewards? Make sure you review the rules of your card to find out if you are still getting a good deal. You don’t want to miss the opportunity to earn points or cash back just for swiping your card.
Create a Budget
Create a budget using the data gathered from your credit card statements. Take a hard look at the numbers and figure out where you can cut and trim your expenses. If you spend too much money on food set a new resolution to bring your lunch to work. If your online shopping trips reached epic levels commit to a no-spend month in which you mix and match new outfits from the clothing you already own. Create a realistic budget and force yourself to weigh each of your future purchases from this point forward.
Pay Off Your Debt
Do you have debt you’d like to eliminate? Then you need a debt reduction plan. Can you take on a part time job, walk dogs, feed pets or babysit? Can you take on freelance writing jobs or graphic art design? Consider your skills, think about your passions and try to find a way to earn a little extra income each month. Look around your house for items you no longer need and sell them on eBay or Craigslist. Set aside money from Christmas and birthday gifts to chisel away your debts and don’t forget to use that tax refund from Uncle Sam.
Negotiate Your Bills
While reviewing your expenses you may find some very large monthly bills. Do you pay an ordinate amount for satellite television, cell phone coverage or Internet service? Take a look at your cell phone bills in detail. How much data do you use on a monthly basis? Can you step down to a smaller plan? Do the same thing with your television service. Are you paying for an extra-large package full of hundreds of channels even though you only watch a handful of them? If so, consider downgrading to a smaller, cheaper plan. You can also call the service providers to ask for deals. See if they would be willing to decrease your costs. A simple phone call is often all you need to save between $5 and $20 off your bill.
This spring get your house and finances in order. With your bills shrinking, your debts eliminated and your credit cards earning the highest rewards you’ll find more wiggle room in your budget for saving. You’ll also be well on your way to achieving financial peace of mind.