Finances at Four: Spring Cleaning Your Finances
It’s a very important part of our lives and many can benefit from taking a moment and really evaluating things.
The four’s Xavier Hershovitz spoke to Steve Siebold, a certified financial educator and author of the book ‘How Money Works,’ to help us use this time to get on track.
His tips include:
- Eliminate wasteful spending: Just as when you spring clean your home and you get rid of the clutter, the same is true with your finances. Create a list of everything you spend money on each month and eliminate the items that you really don’t need but are eating into your savings. In fact, when you review bank and credit card statements, you might be surprised at things you are being charged for each month that you had no idea about.
- Get rid of your debt: Debt is a killer not only for what it does to your credit score, but you are just throwing money down the drain on all those interest charges. There are many great ways to tackle debt, but I recommend going one-by-one and paying down the one with the largest balance first. In addition, try and negotiate lower interest rates and transfer balances to credit cards that offer zero percent interest on balance transfers. That way you are paying off the balance without all the extra interest thereby saving yourself thousands of dollars.
- Review all insurance policies: As your life changes, so will your insurance needs. Unfortunately, most people neglect to make these changes, and it’s costing them thousands of dollars each year. Stop overpaying! Review all your insurance policies – health, auto, home and life – and make sure you have the appropriate coverage for your current needs, not for your situation five or 10 years ago.
- Check your credit reports: Spring is always a good time to check and cleanup your credit reports. Most of the time you will find some items on there that you had no idea about or discover old accounts that you thought were closed but are still open. This can dramatically add points to your credit score not to mention put more money in your pocket that could be used for better things.
- Get professional help: At the very least, we should all learn how money works and understand some basic financial principles. But when it comes to your taxes, investing, insurance or estate planning, don’t do it yourself. Not only are you likely to make unnecessary mistakes, but it could also end up costing you big bucks. The money you spend on a good accountant, financial advisor, insurance agent and estate attorney will save you more in the long run.
- Set new financial goals: Spring cleaning is primarily about cleaning up, but it’s also a great time to set some new financial goals. Whether you want to save for that dream vacation, put more away in a college savings plan or retirement account, set new goals this time of year. Make sure you have a solid action plan laid out that will ensure you reach those goals.