With the spring showers reminding us that another season is upon us, I find the sound of rain refreshing, but the mud I could do without! It does give me the opportunity to keep at the things at home that I might not have given as much attention to through the winter. One of those was a reminder when a co-worker of mine, Melissa Rupp from Fulton County shared “Spring Cleaning Your Finances”, I hope you will find her suggestions helpful.
Spring cleaning your finances can provide a fresh look at your financial situation and help clean up some financial messes with your money. Here are four places to start:
Spring Clean Your Spending Plan: Now is a great time to adjust your spending plan. Is your current money flow where you want it to be? If you are not sure, begin by writing each and every expense on a calendar or journal for a week or a month. Observe where your money is being spent and how much is being spent. Then adjust your spending (one less coffee a week) or adjust your budget (add money to your eating out budget and reduce entertainment) to make it fit your goals.
Spring Clean Your Recurring Monthly or Subscription Payments: These are the payments that are set up to withdraw funds from an account or your credit card each month. A recurring monthly payment may be a cable bill, car payment, or student loan payment. Subscription payments are automatic and typically on an annual or monthly schedule. Subscriptions may be an annual fee for shopping discounts to a favorite store, a car wash pass, or a fitness club membership. Each fee continues until you cancel it. First, consider if you are still using or needing the subscription. If you are paying $30 a month for a gym membership, yet in the past three months you’ve only found 2 opportunities to go, your cost per workout is $45. Or perhaps you no longer visit a store that one time was a favorite, but still pay the $25 annual fee for their store discount.
Spring Clean Your Credit: Take each loan and credit card you currently have and list the amount owed (not the monthly payment or minimum payment) and the interest rate being paid. If that list surprises you, it may be time to clean up the situation. Work on paying down those balances with a debt snowball method or a debt avalanche method. A debt snowball pays the smallest debt with every extra dollar possible until it is paid off, then proceeds to the next smallest debt with the additional available money. It snowballs into a larger and larger payment with fewer and fewer debts. The debt avalanche method tackles repayment on debts starting with the highest interest rates. Once one is paid off the next highest interest rate loan can be paid with money previously allocated to the previous loan and the current loan. The avalanche continues until debts are all repaid.
Spring Clean Your Wallet: Your wallet may represent your daily connection to money transactions. According to Experian, Americans carry an average of 3.84 credit cards which is down from 4 previous to the pandemic. In your wallet, do you have credit cards you no longer use? Now is a good time to remove or discard them. Make sure you have your remaining cards inventoried with contact information of whom to contact if they are lost or stolen. Also, while cleaning your wallet look for gift cards that may carry balances. Over half of Americans carry unused gift cards and nationally have a balance of over $21 billion. Find your cards and be intentional about using, regifting, donating, or cashing in the balance.
Where will you start? Spring clean your finances one project at a time and enjoy the reward of money well spent and even better saved.
Melinda Hill is an OSU Extension Family & Consumer Sciences Educator and may be reached at 330-264-8722 or firstname.lastname@example.org
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