Spring cleaning doesn’t just have to apply to your home; it can include your finances too. It’s time to organize and declutter your finances to put you in a better place.
Clean Off Your Budget
If you haven’t been sticking to your budget or don’t have one at all, it’s time to get focused. Your budget can help you stick to your financial goals and have an understanding of how your money flows in and out.
To begin budgeting, create a list of all of your monthly expenses and your monthly income. Start subtracting your expenses from your income to understand your cash flow. As you review your budget and your spending each month, you will see your spending habits, decide what you need to change, and what you need to do to reach your financial goals.
Throw Out Your Old Spending Habits
After going through your monthly expenses, you’ll be able to examine your spending habits. Whether it’s streaming subscriptions that you only use once a year or ordering take-out for dinner every night, these habits can impact your finances and prevent you from reaching your goals.
Organize & Declutter Your Debt
Not taking strides to get out of debt is holding you back and taking up unnecessary space in your life. The key to your money journey is paying down your debt. The most important debt to pay off first is high-interest debt, such as credit cards or student loans. Create a debt payment plan that works for you based on your budget. Paying down debt earlier compared to just paying minimums will save you money in the long run by paying less interest over time.
Create An Emergency Fund
An emergency fund is a savings fund you have set aside to use in the event of an unexpected bill or loss of income. Having this easily accessible fund will be able to help you recover quicker from these unexpected situations. A good rule of thumb is to have three to six months’ worth of expenses in your emergency fund. To help you build your emergency fund, set up an expense in your budget so you have to contribute to your emergency fund each month.
Start Planning For Your Future
While you’re already organizing your home and setting up new routines this spring, it’s a great time to start financially planning for your future. If you have a dream to save extra for retirement, buy a house, or pay down all of your debt, you need a plan to reach those goals. A plan with a timeline will allow you to have a guide as you reach your goals. You can then adjust the plan as your life changes.
There’s no better time than Spring cleaning to get your finances in order and refreshed. If you’re not sure where to start to take care of your finances, our advisors at Wolfe Financial can help. Give us a call today to get started.