Tips for Spring Cleaning Your Finances

What is the one spring cleaning job you can do that will have the most profound effect on improving your life?

Every spring the urge seems to come: the urge to get the house in order and declutter. To wash the windows. To clean the cupboards. There’s something wonderful about ushering in spring with a clean and organized house.

In our family, I often find myself wanting to give our finances a spring cleaning when spring is on the horizon as well. In January, when the year is new, we plan our financial goals for the year. But when spring comes, we work to give our money plan a thorough “cleaning”, so to speak.

Just in case there are other cleaning fanatics out there, I thought I’d share our spring cleaning technique for our money. Here’s how we clean up our finances each and every spring:

Spring Cleaning: Personal Finance Edition

Assess Your Situation

You can’t clean up your finances until you’ve faced the clutter that is your money. Here are some tips for beginning the assessment process:

  • Write down whom you owe, how much you owe them, what the monthly payment is, what the current balance owing is and what the interest rate you’re paying is
  • Write down each asset you have: the name of the asset, which firm holds/manages the asset, along with its current value
  • Determine your net worth by subtracting your liabilities from your assets

By having a good idea of your current financial situation, you set a good foundation for step two:

Figure Out What’s Working and What’s Not

Spring is a great time to assess how your current financial management plan is working for you.

How’s the budget working? Are you allocating enough (or too much) money for groceries, entertainment, home repair, etc?

How’s the savings plan working? Are you paying yourself first, both for current savings and for retirement savings?

By analyzing the plan and determining whether it’s in line with your goals and dreams, you can be sure you’re ready for the next financial spring cleaning step:

Re-Establish Your Financial Goals

Your analysis might show that you’re spending too much. Or not saving enough. Or you may not even have a plan at all. Don’t worry: this is what spring financial cleaning is for; so that you can get things organized and get your finances “decluttered”.

At this point it’s time to re-establish (or maybe establish for the first time) your financial goals. What is it that you want out of life? To dump debt? To retire early? To save for a dream house or dream vacation?

Write down your financial goals (start with the top three that mean the most to you and/or your family) and get ready for the next step.

Adjust Accordingly: Tips for Decluttering Your Finances

Now that you’ve established what your top three goals are, it’s time to make those goals happen. Here’s how it’s done:

  1. Write down your monthly expenditures and income (better known as a “budget”)
  2. Determine how much money is left over after you create your budget
  3. Determine which expenses can be cut in order to help you reach your financial dreams
  4. Work to transfer debt balances to lower interest rate loans in order to minimize the amount you’re paying in interest as you work to pay off your debt so that you can have more money to put toward your financial dreams
  5. Work to determine what type of a savings vehicle is most suitable for your timeline and your risk tolerance
  6. Implement the necessary changes
  7. Choose to persevere with your plan until your goals are achieved

Implement your own, personalized spring cleaning plan for your finances and streamline your money management so that you can more quickly achieve your financial dreams. I promise: it’ll be worth the effort once you’ve crossed the finish line!

Do you “spring clean” your personal finance plan? What is your one BIG money goal this year?


*Photo courtesy of storebukkebruse


10 comments on “Tips for Spring Cleaning Your Finances

  1. It’s not only a spring cleaning item for us, we periodically throughout the year review our budget. My wife and I sat down this weekend to review and made some adjustments. It always feels good to be on the same page with your spouse and have a plan for your money.

  2. Good tips Laurie πŸ™‚ With everything that’s gone on for me the past few months, staying on top of my finances has fallen by the wayside. Hope to get back on track soon!

  3. I just recently started using Personal Capital, which I love. It greatly simplifies steps 1 and 2 for me, and has made them things I can do on an essentially daily basis.

    I’m not sure why, but I find myself naturally doing some financial spring cleaning every year. For example, it seems to be when I call to explore insurance quotes, as well as badgering the utility companies about their prices…

  4. What’s this “urge to clean and organize” you’re talking about?
    When it comes to personal finances, I have found that I really do need a clear set of goals. They might change over time, but as long as there is clarity about what we’re trying to achieve, I’m good to go.
    (If your own home doesn’t provide you with enough mess and clutter, feel free to pay a visit ; )

  5. My husband and I need to do a thorough decluttering. With the addition of freelance income and expenses, we’ve got documents all over the place. Yuck! I think gaining control of the paperwork will help us be more mindful about how we get to allocate the expenses.

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