Whether you actually do it or not, we all know what spring cleaning is: the tradition of giving your house a thorough scrubbing and cleansing of all the clutter it has accumulated over the last year and winter months. It’s a good feeling to scrub your house clean and start the next part of your year fresh.
But your house isn’t the only thing that should scour clean this spring. Another aspect of your life that can benefit just as much from a spring cleaning is your finances. Sometimes, despite your best attempts to save money, you come out of the winter months carrying some holiday debt. If that sounds like you, you may want to think about taking out a title loan to get a fresh start. This is another reason it's so important to do some spring cleaning with your finances. It'll help you find your problem areas, develop a plan, and set new financial goals for the rest of the year.
When you’re in the middle of a situation, it can be hard to see the big picture. Cleaning out your finances in the spring gives you a chance to see that bigger picture, look for patterns and take stock of everything that has happened in the last year. Maybe you’ll notice you spent too much money on eating out, or your electricity bill was unusually high, or that your income fluctuated throughout the year. Having information like that is invaluable when it comes time to make financial decisions moving forward.
Now that you know where you’ve been, you can begin planning where you want to go. Get out your calculator and add up how much income you expect to earn in the next nine months, and then subtract your monthly fixed expenses from that total. What’s left over is your discretionary spending, and like the name suggests, it’s yours to do with what you want. Save up to go on vacation, invest in your retirement, finance a new car: the world is your oyster.
If you’ve made it to this point, you should have a good idea of where your finances stand. But there’s one last thing left to do: make sure that the clutter doesn’t build up again for next year. One way to do this is to contact your bank and all your other monthly billing accounts and go with paperless statements. In the digital age there’s really no point in receiving a paper statement each month. They inevitably get stashed somewhere in your house, only to be thrown away later.
Another smart way to keep your finances tidy is to set up an expense tracking app that will automatically monitor your income and show you exactly where it goes with a graph. The most popular app on the market right now is Mint, but there are countless others that have their own strengths and disadvantages. The important part is that it will give you a clear look at your finances next year without you having to go through the same spring cleaning process.