Spring is in the air (finally!) and our thoughts naturally turn to cleaning and organizing. It’s a great time to remember that your finances might need a little spring cleaning, too. Getting organized can help you identify potential problems, save money, and save time by streamlining your family’s finances.
Of course, it’s hard to organize if you aren’t sure exactly what you have! So just like emptying the dresser drawers, you’ll want to take inventory of what you have. Take stock of both your assets (accounts and property) and your liabilities (debts). Identify and close obsolete accounts, consolidating them into the accounts you use regularly. This not only makes managing your finances more efficient, it also reduces the risk of fraudulent activity with accounts that you aren’t paying close attention to.
Check Your Credit Report
While you’re at it, it’s important to check your credit report. Your credit score is based on the information found in your credit report, and lenders use it to decide whether you’re worth the risk for things like mortgages, loans, and credit cards. Every year, you are entitled to one free report from each of the major credit issuers: Equifax, TransUnion, and Experian. Look over the details carefully. If you spot any errors or inconsistencies, you should contact the company that issued the report, and if possible, the source they got their information from. Details about this process can be found at https://www.usa.gov/credit-reports.
Manage Your Passwords
With so many financial transactions happening online these days, passwords are an important part of your financial organization and security. If you haven’t changed passwords for a while or are using the same passwords across multiple accounts, take some time to change them and keep your accounts secure. If keeping track of your passwords is keeping you up at night, consider enlisting the help of a password service. As an example, LastPass allows you to make a single, memorable password, then randomly generates strong passwords for any other accounts or websites you link to. As you navigate your multiple online portals, LastPass will automatically populate the User ID and Password fields of each site you visit. This service costs less than $5 per month and helps keep your info secure.
Make a Budget (and stick to it!)
Budgeting is a non-option for organized finances. Unfortunately, many of us find it tedious and never get around to making it happen. There are a lot of amazing tools out there that help you automate your budgeting and get all your accounts in one program (Mint, Ynab, and Tiller, to name just a few). With a little input from you, these services can link all your accounts and help you monitor your spending to keep you on track with your financial goals. Many of them offer a free trial, so you can get a feel for how they work before you commit. Shop around and see what’s out there that serves your needs the best.
Once you have a way to track your spending, spend some time reviewing your transactions to see where your money is actually going month by month. If you’re overspending, now it will be easier to find out which budget categories are coming up short. You might come across some automatic payments you can get rid of altogether (like that gym membership you signed up for a year ago last January and haven’t used in over eight months…). You may be spending more than you realize on little luxuries like running out to get some lunch or having a latte more afternoons than not. It’ll be easier to cut back on extras when you realize it’s making a difference in how soon you pay off your mortgage or whether you’ll be able to travel when you retire!
Automate Monthly Payments
The flip side of eliminating unnecessary expenses is automating necessary payments. With our busy schedules, even the most organized person is going to miss a bill from time to time. Automatic payments keep that from happening, while also freeing up some time for you to do something you’d rather do than pay bills (that’s a long list, isn’t it?). Many utilities offer the option to average your monthly bills so you can expect to pay about the same amount each month without worrying about seasonal fluctuations for heating and air conditioning. If your energy bills vary widely throughout the year, this might be a good option so you can know ahead of time approximately how much will be coming out of your bank account each month.
Saving, like budgeting, is another one of those good financial habits that often fall prey to procrastination. If you also automate a deposit into your savings account each month, you’ll be insuring that you have something set aside for a rainy day.
Having some accountability will help you stick to your budgeting goals (just like it would have helped with that gym membership). You and your spouse definitely need to be on the same page so you can work together to reach your goals as a family. If you haven’t in a while (or never have), take some time to sit down together and review how things are going. What are your goals as a family, and why? Depending on how you each approach the subject (and opposites do attract!) you may have some compromises to make. The sooner you identify areas of potential conflict, the better—for your financial future, and more importantly, your marriage.
Just like a good spring cleaning, spending a little time organizing your finances for the year can have a lasting positive impact on your daily life. Hopefully you’ve found a few good tools here to help you in your efforts. Happy organizing!