Don't your finances deserve an annual cleaning?
Financial Spring Cleaning
by Shaunna Privratsky
A Financial Checklist
Micropayments: A Faster Way to Pay Down Debt
The birds are chirping, the grass is greening up, and it's the time of year again for spring cleaning. Instead of reaching for the feather duster and the mop, why don't you do financial spring cleaning?
- Taxing, not waxing. The tax deadline is approaching, so gather all your documents like W-2s and year-end tax statements. Now is a great time to check on your deductions. Are you having too much taken out or not enough? If you have a child who turned 18, maybe you need to change your number of dependents.
- Shine a light on your property taxes. Take a look at the annual statement for property taxes. You may be paying too much if your house was recently appraised at a much lower amount. It doesn't hurt to check, and this will help your mortgage payment go down if there is a discrepancy.
- Dust off your insurance policies. At least once a year, go over all your insurance policies and look for deductions. Check around, and let your current agent know you are. When I needed to add my teenaged daughter to our auto insurance, she initially quoted me a whopping $129 a month extra. After checking with all the major companies and getting lower quotes, I let her know, and mysteriously the price dropped down to $60 a month. "It must have been a computer glitch," she said. You can get extra discounts when you combine all your policies with one company. Check auto rates here. Also, if you added any safety features to your home, or any energy efficient products, you also qualify for extra savings. You can compare homeowners insurance here.
- Watch out for speed bumps in the budget. Every year, an unexpected bill pops up. But are they really unexpected? Every six months the paper subscription rolls around. Every three months one of the cars needs an oil change. There is always a jump in the budget when planning a getaway. November rolls around and there's lots of extra food to buy, a gift list to fill, and extra postage for mailing. Sit down and make a list of these not-so-frequent bills, and this year you will be prepared.
- De-clutter your debt repayment plan. If you have been making minimum payments only, you know you will be in debt for a long time. Make a concentrated effort to be debt free by adding extra to one bill until that is paid off. Then move the extra payment to the next bill in line, until you are living happily debt-free. It's also a good time to make sure you're getting the lowest rate available.
- Energize your emergency fund. If you have been adding regularly to your savings, bump it up a bit, even if it's just an extra $10 a month. Every little bit counts, and the money will be there when you need it. You can compare savings rates here.
- Scrutinize your savings for retirement. Time to compare interest rates and check your fund's performance. Make sure you are still getting the best return on your investment.
- Scour your mortgage. Rates are at historic lows. Compare your rate to what other lenders are offering with this mortgage tool or check with a mortgage specialist. A 1% reduction on a $200k mortgage is worth $120 each month!
- Streamline your routine. Make bill paying a breeze by automating your payments with online banking. Most banks still offer it for free. Just estimate how much the bill will be and make sure the money is in the account before the due date, which you can usually specify. For bills that fluctuate like energy bills and water, add a cushion to avoid overdrafts. It is easy to keep track of through your computer or phone, or checking with the company directly. No more lost checks in the mail or late payment fees.
Now that your finances are in order, reward yourself by planning your summer vacation. By scouting out deals early, you are getting a jumpstart on saving money and giving yourself something to look forward to. You'll be worry free when you spring clean your green.
Take the Next Step:
- For more on financial spring cleaning or doing a financial checkup at any time during the year, please visit The Dollar Stretcher Library.
- Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!
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