The minute the snow melts, Canadians from coast to coast know that means it is time for some major spring cleaning (for tips on how to make your spring cleaning inexpensive and fun, check out last month’s blog on our Top Spring Cleaning Tips)!
Collectively, we seem to all grab our dust rags and mops and get right to work. But there is one important, dusty corner of our lives that all too often gets overlooked when we get to cleaning – our finances.
With the topsy-turvy rollercoaster of the year we just had, now is the best time to get to spring cleaning our finances! Not sure how to do that? No worries, the team at iCASH has an easy-to-follow game plan for a much-needed, deep cleanse of your finances.
Step 1: Organize your files (both digital and paper)
It’s hard to clean out and organize when you aren’t even sure what you have! Over the years, we all end up accumulating documents and files without really knowing how to organize them. The first step into decluttering your finances is to set up two filing systems for all your documents – one digital filing system and one paper filing system.
Gather all of your documents in one place and then start to organize them into sub-categories of your finances. These sub-categories will be different for each individual, but some common ones would be: taxes, loans, bank accounts, credit cards, and investments.
For your paper copies, make sure to organize them into sub-categories in a fire-proof filing cabinet. And, for all digital documents, make sure to keep a backup either in an external hard drive or in a cloud-based storage system, in case anything should happen to your computer.
Step 2: Declutter your accounts
Do you have more than one bank account, credit card, or investment account? Often, as the years go by, we end up opening new accounts without closing older ones. Old, unused bank accounts usually continue to be charged monthly fees. And investment accounts, such as RRSP accounts from former employers, would be
easier to monitor if they were transferred to your current accounts.
Do you have several loans spread out across different financial institutions? Consider a debt consolidation loan to merge all of those creditors and interest into one, easy-to-manage loan.
Step 3: Sweep up your budget
Remember that amazing budget you probably created as one of your New Years’ Resolutions? At the four-month-into-the-year mark, how well have you stuck to it? If you have been diligent about it, great job! You might want to give it a once over to make sure that there aren’t any other areas of spending that you would like to improve, and then skip to Step 4!
If you haven’t been sticking to it, well, you aren’t alone!
Just because you have fallen off the budgeting wagon doesn’t mean you can’t pick yourself back up and try, try again. And if following a full, year-long budget seems daunting, why not opt for a monthly one or even a weekly one? Sometimes taking baby steps is the most effective way to change bad spending habits. And, if you need some tips on how to create the perfect budget, check out how to make a household budget.
Step 4: Clean out bad spending habits
One of the key steps to healthy, clean finances is to reduce unnecessary spending whenever possible. During this spring cleaning session, take a minute to analyze your bank account and credit card statements to look for any wasteful spending.
Perhaps you spend too much on ordering or eating out. Or maybe you are an impulse shopper (especially during the pandemic when online shopping has become a national pastime!) One easy tip for reducing spending without cutting out everything is to commit to reducing your spending by 10% monthly.
Instead of eating out once a week, perhaps you only eat out once every two weeks. And perhaps before you buy your next item while online shopping, you wait 24 hours to see if it is still important to you. Another tip to reduce spending is to check out this blog on the Top 4 Things People Waste Money On. Are
you wasting money on any of those?
Step 5: Eliminate late/missed payments
Have you missed a loan payment or credit payment? Are all of your bill payments up-to-date? Financial spring cleaning is the perfect time to catch up on any missed or late payments. If you need to make repayment arrangements with a creditor, give them a call and see what kind of agreement you can come to? Dragging
around old debts adds unnecessary fees and interest, not to mention stress.
If you need a quick, easy loan to pay off a pesky, overdue bill, a payday loan might be the perfect solution.
Step 6: Set up your savings
Now that you have managed to shave off an extra 10% of your spending as well as pay off your overdue debts, it’s time to start thinking about the future. Have you started your sinking fund? How much have you put towards your retirement? Have you started saving for a vacation? These are all important financial questions, and now is the perfect time to answer them.
An easy, effortless way to make sure that you are saving properly for the future is to automate your savings. Speak with your financial institution about setting up some automatic transfers towards your sinking fund, your retirement investments, and your savings account. Having the funds moved automatically makes
budgeting a much easier task!
If you need some help figuring out how much to put towards savings, check out How Much Should You Put in Savings Each Month.
Spring cleaning is about so much more than dusting and window-washing! It means breathing in some fresh, spring air, catching some warm, vitamin-D-filled sun rays, and clearing out the financial clutter! If you need any assistance getting your spring finances back on track, iCASH is open 24 hours a day and seven days a