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Are your finances making you stressed? Are you unable to find important documents among the clutter? It’s time for a financial spring cleaning! The following seven strategies will help you to clean out unnecessary (financial) junk, get clear on your spending habits and prioritize your savings goals, all of which lead to a more empowered and potentially less stressed version of you. Let’s get cleaning!

Get organized. The first step in a financial spring clean is to declutter everything—your wallet, your purse, the kitchen counter where you keep all your mail—everything! Clean out your desk drawers where you keep invoices, bills, tax information and any other important financial information.

If you store things digitally (which is highly suggested), go through all your desktop files and folders and make sure everything is in its designated space.

You’re looking to:

  • Delete or shred any outdated personal documents. If it’s three years old or more, get rid of it.
  • Digitize all necessary financial documents. Organize and file them electronically.
  • Keep physical spaces tidy and free from clutter, paperwork, and old mail.
  • Back up your documents using cloud-based software or to an external hard drive.

 

Decluttering and organizing your financial records allows you to easily find what you need, keeps everything close by and off the kitchen counter, and gives you a sense of control over your money situation.

Reevaluate goals. Look at your goals from last year. Did you reach them? Maybe you planned to buy a car, have $3,000 set aside in your emergency fund, or received a promotion or raise at work.

We suggest that you establish your goals for the year now (if you haven’t already) before you get distracted with the beautiful weather and upcoming summer months. It’s easy to become busy with our everyday routines and put off money discussions for later.

You’re looking to:

  • Review your goals from last year. What progress did you make?
  • Reevaluate and adjust last year’s goals with a strategy for how you can accomplish them this year.
  • Make new goals. If you accomplished your 2021 goals, great! If you aimed too high and it’s proven difficult to achieve (we’ve all been there), try keeping that same goal but breaking it up into smaller, more attainable mini goals throughout the year.

 

If you haven’t made money goals before, that’s okay! Goals help you to achieve many things—financial independence, debt relief, higher income and more. Goals are completely personalized to your life and financial situation. Take the time be honest with yourself and the goals you’d like to set. Write them down and post them where you can see them often. This reminds you why you’ve chosen these goals and keeps you accountable to yourself.

Review policies and subscriptions. Take the time to look at all your insurance policies including health, auto, and home. Can you ask for a better rate or get a better rate with another provider? Are you paying for more than what you need? Save some money by reviewing your policies and making sure they don’t include stuff you don’t need.

Do this for all your other subscriptions too. Consider streaming services, gym memberships, mobile apps, meal delivery services, and so on. If you’re no longer using it or if it’s just too expensive, it’s time to cancel it and use that money for something else.

You’re looking to:

  • Adjust insurance policies to only pay for what’s necessary.
  • Cancel subscriptions that you no longer use, want or need.
  • Save money! 

Financial inventory. Take stock of all your accounts as they are today. Look at your credit report, bank accounts, credit card accounts, retirement accounts, HSA accounts, investment accounts—all of them!

The point of this is to become more familiar with their balances, interest rates, terms, and transactions. The more often you check on these accounts, the more comfortable you’ll become with them. We suggest reviewing them monthly and checking your bank accounts daily. Checking in often also helps to prevent fraud.

You’re looking to:

  • Become familiar with account balances, interest rates, transaction history, etc.
  • Have ownership over your accounts and know exactly where they stand.
  • Use this information to empower your financial choices.

Plan to relieve debt. Do you have a plan in place to eliminate any debt that you’re carrying? Student loans, medical bills and credit cards are the most common forms of debt. Because interest is accrued on balances daily, it can sometimes be difficult to chip away at the principal balance if you’re only paying your minimum balances each month.

We highly suggest creating a solidified plan to paying off debts. Then, you can use that money spent on interest for something way better like upgrading your car or a family vacation.

Your plan will be tailored to your specific situation. Focus on paying off any outstanding or overdue bills first. Then, move to the highest interest balance before moving on to any other debts.

You’re looking to:

  • Create a strategic and actionable plan that will eliminate debt in a way that works with you, your financial situation, and your goals.
  • Reflect on the types of debt you have. If it’s mostly credit card debt, consider your spending habits and patterns. Do you buy things when you’re upset or wanting to celebrate? Get honest with your spending habits to curb debt in the future.
  • Give yourself more freedom and flexibility with your finances by getting rid of debt for good.

Prioritize your savings. Saving is crucial for your financial health and success! Start with having an emergency fund of at least 3-6 months’ worth of expenses. This can keep you out of unnecessary debt during an unexpected crisis or situation. You’ll feel less stressed when the unexpected happens because you know you have the funds to cover your expenses. Your emergency fund should be in an account that you can access regularly, but that you shouldn’t be able to withdraw from too easily. It’s for emergencies, after all!

For other savings goals such as a new car, a house, vacation, or for the holidays, you can use your Auburn Savings savings account. After you’ve made your budget for the year (see below), you’ll know how much money you can set aside for your savings goals. To make it even easier, you can automate your savings by using the RoundUp feature on your Auburn Savings accounts!

You’re looking to:

  • Establish an emergency fund and actively contribute to it. Aim for 3-6 months’ worth of living expenses (the bare minimum to pay your bills, buy groceries, etc.)
  • Automate your savings so that it’s a “set it and forget it” part of your financial goals.
  • Prepare your future self for financial independence.

Revise your budget. Did your income change from last year? Did your expenses? Budgeting isn’t about cutting out all of life’s sweetest things—we promise! It’s about being 100% honest with yourself on how much the life you want to live actually costs.

What can you live without? What makes you happy and that you’re not willing to let go of (but that you can still afford without sacrificing important bills). Think of your budget as a “lifestyle design” and not like a strict diet that won’t work.

For a refresher, check out our previous blog on 5 Steps to Building a Beginner’s Budget. Then, update your budget from last year, if needed, and include all of your income sources, expenses, debts and savings goals. Stick to it as best as you can!

You’re looking to:

  • Create a “lifestyle” budget that works for you, not against you.
  • Streamline all income, expenses, and savings goals for the year.
  • Hold yourself accountable to your financial goals and make necessary changes.

Implementing all these spring cleaning tips might sound time consuming, but take it one step at time! It’s better to start small and crush smaller goals rather than become overwhelmed and give up.

At Auburn Savings, we care about your financial wellbeing. If you have any questions or need assistance with your financial situation, give us a call. You can bank on us.