5 Steps to Spring Clean Your Finances

Every spring we throw open the windows and let in the fresh air, put away our winter clothes and inevitably we start cleaning the house. Now is also the perfect time to clean up your finances.

How do you clean your money? Well, in 5 easy steps; it starts with checking your current financial plan, eliminate items that no longer serve you and create/update your plan so that you can set yourself up for success.

Step 1: Clean out your filing cabinets

We all have them – filing cabinets where we throw in items and forget about them. I would like you to declutter these cabinets! I actually did this last weekend and I found phone bills and taxes from 2007!  According the IRS the average American should  keep tax return records for 3years, and according to the CRA, Canadians should keep income tax records for 6 years.    

I bought a shredder on Amazon and I happily shredded 2 full recycle bags of old/useless paper that I have been hoarding. Also there are a few organizations that offer shredding services like Iron Mountain. After emptying the old filing cabinet, I put it up online and sold it for $50 on www.kijiji.ca !

Step 2: Check in or set your financial goals for the year

Are you on track to meet your 2021 financial goals? If so, great! Keep going. If not, no worries, this is the perfect opportunity to tweak your spending, saving and investments to put you back on track to meet your short-term and long-term goals.

Step 3: Review / Dust off your spending plan (aka Budget)

Your spending plan (budget) is one of the best tools you have for reaching and maintaining your financial goals. When you allocate your money, you know exactly where it’s going.   If you don’t have a spending plan check out Bacon & Heels and get started today.

Step 4: Cancel ALL unused subscriptions

The average person spends $238 a month on subscriptions, that’s over $2,800 a year. Now is the perfect time to review your subscriptions and eliminate the ones that you no longer use.. The easiest way to check this is to take a few minutes to review your credit card statements and decide what subscriptions you will keep and eliminate.

Step 5: Update / plan your retirement contributions

Last but certainly not least, whether you want to max out your IRA, 401(k), RRSP or TFSA, now is a good time to plan how invest in your retirement savings.

If you have an employer-sponsored retirement plan, connect with your human resources department and calculate the match amount so that you can benefit from this ‘free’ money.

The bottom line:

Having your finances in order is an important part of your money journey, but let’s face it, we all get busy and we tend to put our finances on the back burner.  If your finances are in order – right on!.  If it’s not, no worries, just try the 5 steps above and don’t get discouraged.

So as your do your spring cleaning, besides packing up the winter clothes and washing your windows, remember to spring clean your finances while you are at it.