Time flies. We are almost one quarter into 2017, and spring is here. If you’re getting ready for some spring cleaning, don’t leave your financials aside.
The beginning of the year is always a high-spending period. Remember all those new year’s resolutions. Now is the time to review them — and their expenses — and get ready to eliminate any that don’t appear to be on the cards for this year. That is not to say you should give up on that gym membership or painting classes too soon. But if you have reached a conclusion that you don’t have time for something, cancel it now before it drained any more money on your credit card.
So how can you go about spring-cleaning your financials? Here are a few points to keep in mind.
Revisit your priorities
What and how you spend your money could change over time by impulse decisions and changing obligations. It is smart to take time to review your priorities and make sure that you’re still on track to achieve them. For example, have you been planning to buy a house? How are you doing on saving for a down payment or decreasing your other debts? Where you planning to start an education fund for your children? Where does that saving fit into your overall plans and your financial capabilities?
Revisiting your priorities can help you ensure that despite emerging needs, you’re able to meet your long-term goals.
Check your savings
The year is flying by and if you have some goals for your savings, you should check your progress. Many savings options are only good if you use them early in life and consistently. That is how you will be able to plan for your children’s education, retirement, etc.
If you find that you have not even started on putting money aside this year, take some tangible steps toward this goal. For example, establish a separate bank account and set an auto deposit of your saving amount into this account. Being your research on best funds for retirement, education, etc.
On the other hand, if your savings have not been growing at a satisfactory level, a visit to the bank or a financial adviser can help you find options for investing your savings. It is a good practice to always keep an eye on your investment choices and the rewards and risks associated with them.
Review regular payments
Take a good look at your bank and credit card statements for the past few months, mark any regular payments. Anything that appears to be unnecessary or underused can be eliminated. It may be a small amount every month, but just like decluttering your house, getting rid of these minor expenses will add up to more power and space in your budget to afford something else.
Many service providers also increase their rates early in the year. So check out your payments for phone, internet, insurance, etc. If you find a significant change, call around and shop these rates. Another provider may be happy to win you as a customer with a better rate. If not, you will be able to account for the increase in your budget.
Detect problems early on
Just like companies do, take the end of this quarter as a chance to see where you stand on your financials. Are you maxing out on credit cards? Have you been behind on some bills? Don’t overlook the problems that you detect even if they appear to be minor or insignificant. Massive debts do accumulate overnight, and can certainly be avoid if you detect them early on and work on eliminating them.
Other problems can be in the works if you’re not prepared for upcoming big payments, like rent, tuition, etc. If any such payments are coming up later this year, begin now on your planning for how to be prepared for them. Pushing them on a credit card may not be the best route. Your budgeting should take these payments into consideration to make sure that you are able to cover your expenses without going into debt.
The writer, a former Gulf News Business Features Editor, is a Seattle-based editor.
Spring cleaning your financials
Check your priorities and savings
Detect any problems with debts or payments
Eliminate any unnecessary, regular payments
— R.O.
