You’ve probably done a spring cleaning at least once in your life. Maybe it’s even something you do habitually each year for a fresh start. While spring cleaning is most commonly associated with literally cleaning your home—it can be applied to many areas of life. For instance, your finances can probably use some tidying up—especially after the holiday season. Here’s how you can apply the principles of spring cleaning to your financial life.
Creating a (Real) Budget
There are two main roadblocks most people face when budgeting: sticking to the budget and being honest about spending. Keep this in mind when formulating your budget.
Here’s what you’ll need to do:
- Gather up all your financial statements. This will include bills, bank account statements, insurance or utility payments, your paystubs, investments—just anything that affects your cash flow.
- Compare your monthly income vs. expenses. This will show you exactly how much money is coming in and going out each month. Alongside recurring expenses, you will also want to include non-essential and one-time expenses here (subscriptions, eating out, etc.).
- Separate your essential and non-essential expenses. Chances are you can reduce spending in both these areas, although cutting out non-essentials will be the first and easier course of action.
- Determine how much you can cut out of expenses in order to have money left over to save, pay down debts, or use for leisure activities.
Declutter Your Space and Payments
Going minimalist has become a trend as of late. All kinds of lifestyle gurus have advice for how you can declutter your living space for a happier life. While it’s great to clean up your home, you should do the same for your finances. Look at the things laying around your house or apartment. How many of those things are you not using with any kind of regularity? If you’ve got stuff just collecting dust, pass it on to someone else who might have an immediate use for it. Better yet—try to sell some of these unused items online. You’ll clean up and cash out at the same time.
Chip Away at Debt
Debt can be a curse to your mental health and finances. It’s an unfortunate fact of life that can hold people back for years—or longer. In fact, 20 percent of millennials currently believe they’ll die in debt. That’s not a great way to imagine your future. The sooner you can formulate a plan for tackling your debt, the sooner you can get that weight off your shoulders.
Here are a few strategies that can help you chip away at debt:
- Use the “snowball method” to eliminate your smallest debts first. Studies have shown that focusing on one line of credit at a time—and totally paying it off—can help people gain confidence to take on the rest of it. Another option, the “avalanche method” of paying off debts from highest interest rate to lowest, can save you money long-term—but often doesn’t come with the same positive reinforcement.
- Transfer credit card balances. This can be an effective way to pay off minor debt. A lot of times you can transfer a credit card balance to a lower interest rate card—sometimes even zero percent. The catch is that’s just an introductory rate, which will increase dramatically after a certain amount of time. However, avoiding that high interest for a while can help you save hundreds—and hopefully eliminate that debt.
Talk to Debt Professionals If You Need Help
Not everyone is in a place to handle their finances on their own. If this sounds like you, it might be time to seek a more heavy-duty solution, like debt settlement. Make sure you choose a trusted debt relief company should you decide to go that route. There are a lot of predatory organizations that don’t end up helping their clients.
Freedom Debt Relief is one of the most trusted names in the world of debt relief for helping clients settle, and sometimes even consolidate, debts. For example, with the Consolidation Plus program, Freedom Debt Relief pays out a settlement to your lenders that can be less than you originally owed. You then pay one balance each month back to Freedom Debt Relief in the form of a debt consolidation loan. This not only simplifies things for you, but it can reduce your debt load.
Look for Some Additional Income
We live in an amazing time. It’s easier now than ever before to find extra ways to make money thanks to the Internet. There’s a wide variety of ways you can make money from home, or around the neighborhood. Consider an on-demand, peer-to-peer service such as Uber or Lyft. You can just do a few hours here or there to make some extra dollars. If you have a skill like design, engineering, or writing, you can make money by freelancing. Websites such as Fiverr match freelancers with people with a project in mind. It’s even possible for you to make extra money by renting your apartment or home on AirBnB. Consider one of these ideas if you find you’re not bringing in enough cash each month.
Spring is a time of fresh starts. No matter what your situation is, today is a new day and should be approached as an opportunity to aim towards your goals. Getting to a better place financially is one of the most important steps in that process.