Spring cleaning isn’t just for closets, windows, and garages. After tax season is a great time to take a look at your personal finances and spending habits, and make adjustments where needed.
Organize Spending Habits
Take stock of your spending routines and target changes you want to make. Always treat yourself to a latte on Fridays? Meet friends for dinner on Saturdays? How about using coupons or promo codes before the expiration date for FOMTS (Fear Of Missing The Sale)? When you take a keen eye to your spending habits, you’ll be able to spot target areas where your spending reflects nothing more than routine. Now is the time to change up that routine to better reflect your financial goals moving forward.
Polish Your Budget
If you have no budget to dust off, now is the time to create one. Come up with a plan for how you want to save and spend your money, and track your spending habits to help reach your financial goals. The key is to be consistent and stay on budget. Make sure you’re polishing—er, updating—your budget monthly or even weekly.
Catch Up on Late Payments by Turning Trash into Dollars
Are you behind on any payments? Now is the perfect time to slow down and work on a plan to pay things off. Tried-and-true methods for getting some quick cash to help jumpstart this plan is to host a garage sale, post unwanted items on your local Facebook Marketplace, or sell on eBay. A spending freeze—a temporary pause on purchasing anything but essentials—can also help with with saving funds for paying off old bills.
Pare Down Debt
Staying in debt is like trying to swim against the current: you might be moving your arms and kicking your feet but you’re not moving forward. Now is the time to draft a debt repayment plan: make a list of all your debts and rank them in the order you want to pay them off (some people rank from lowest to highest amount owed, while others rank from highest to lowest interest rate). Whichever way you choose, build your plan into your budget, focus on one debt at a time, stay diligent, and watch your debt diminish each month.
Clean out clutter
In most cases you only need to hold onto your tax returns documents for three years, but the IRS has up to six years to initiate an audit if you’ve neglected to report at least 25% of your income. For this reason, taxpayers who receive multiple 1099s from a variety of income sources might want to hold onto documents for at least six years as it can be easy to miss or overlook reporting some income. Keep documents for seven years if you filed a claim for worthless securities or a bad debt deduction.
Maintenance Cleaning: Plan for your Future
Now is the time to plan for your financial future by creating or updating a financial plan with clear goals set on a timeline. A certified CPA or financial planner can help you identify areas of improvement and keep you on track to meet your financial goals.
