by Nicole Dugan Every year, I look forward to spring, but dread the manual labor that goes along with the change in season. This year, I’m making every effort to look at spring as the chance for a fresh start. Spring cleaning is not only a chance to clean up your house/apartment and put away your skis, snow boots, and shovels, but it’s also a time to clean up your financial house. Here’s 5 spring cleaning hacks to help motivate you.
Clean out your closet and see what you actually own
If you know exactly what’s in your closet from your ugly Christmas sweater to your snowboard boots, good for you, you have probably saved money by only buying what you need. Furthermore, you probably make use of all the items that are in your closet and are aware of exactly what you own. However, if you have clothes hanging in your closet that you haven’t worn in 5 years- including a pair of old cowboy boots from the theme party days back in college- it’s time for an overhaul. Once you clear out the clutter, you’ll see what you actually own and you may realize that you don’t need that new raincoat – you have a perfectly good one that you haven’t worn in five years.
No more big spending holidays in the near future
Good news for your wallet! There aren’t any big-spending holidays coming up over the next few months. If you racked up a big credit card bill over the holiday season in December, now is the time to work out a payment plan for yourself. On the other hand, if you find yourself with extra cash that you aren’t spending on gifts and holiday treats, save it- or better still open up an investing account and start investing.
Analyze your budget and see where you can cut back or save
I’m not advocating that you stop all forms of entertainment and social interaction to beef up your savings for the future. Enjoying life is important, but so is saving for the future. Believe it or not, you can do both! Analyze your spending habits (there are lots of apps out there that can help you do it) and figure out where you can cut back. Do you go to 4 concerts a month? Maybe next month, you only go to two and save the money you didn’t spend on tickets.
Take the time to learn about ways to invest and get started
If you’ve found places where you can cut back and save, you’ll need a place to put that extra dough. Sure you can put the money in a traditional savings account, but you can make your money work harder for you if you invest it. When you invest in the market, you have a greater potential to earn more money on what you save. Over the last 50 years, returns on the S&P 500 have averaged about 10-11%. Compare that to the less than the 1% you can earn in a traditional savings account.
Plan out how you will use your tax refund
If you’re expecting a refund, start thinking about what you are going to do with it once you get it. Whether you plan to save it, invest it, or put it towards your family vacation, make sure you ear-mark it for something. If you have a plan, you’re less likely to go on a spending spree.