Spring Clean Your Finances With 5 Easy Steps

Spring has been pretty much absent here in Michigan.  Last weekend we had an ice storm.  Temperatures have been about eight degrees below average for the month.  Snow showers and accumulations are still a regular occurrence.  Still, spring has to come sometime, right?   We’re still hoping.  But, even if the weather isn’t cooperating, spring is still on the calendar.  Now’s a perfect time to spring clean your finances.  Here are a few easy tips to get started.

Calculate Your Net Worth

We calculate our net worth every month, so this is easy.  But if you don’t do this regularly, now’s the perfect time.  Net worth is an easy calculation.  Simply add up all of your assets.  Then add up all of your debts.  Subtract debts from assets and that is your net worth!

Compare Net Worth To Last Year If Possible

Hopefully you know your net worth from last year, in which case you can do a comparison.  If you’re doing things right, the number is higher. If so, celebrate.  Keeping regular comparison points along the way will help show you how things are going.

If you don’t have last year’s number handy, don’t fret.  Simply mark down this year’s and do the comparison next year.  It’s never too late to get started!

Run A Credit Report

You get three free credit reports per year, one from each of the major bureaus.  Now is a perfect time to run one of your free reports.  Ideally, run one report every four months, rotating between the three.

When you get your report, look through it line by line.  Make sure you recognize every account and that the balances make sense.  This will summarize what you owe and what you can potentially borrow.  It also helps to make sure nobody has opened any credit in your name unknowingly.  Plus, you can make sure there’s nothing that’s been forgotten about.

Check On Goals And Revise Them (Or Make New Ones)

If you’re like me, you set some financial goals at the beginning of the year.  Now’s a great time to check on those and see how you’re doing.  If any revisions are necessary, make them now.  Or, if you didn’t set any goals back in January, why not set some now?  It’s never too late.  Plus, you have eight months to get things done!

Clean Up Your Tax Documents

Tax season is behind us, and unless you filed an extension, your taxes should now be filed.  Now’s the time to make sure your tax records are in order.  You need the last seven years of records in the event of an audit.  Make sure you have all of those in one place and that they’re safely locked away.  We keep ours in a fireproof safe.

If you still want to keep your records beyond seven years, I absolutely think that’s a great idea.  But, make sure that you have the last seven years worth at hand.

What Spring Cleaning Do You Do?

It’s your turn.  What spring cleaning activities do you do for your finances?  Let me know in the comments below.

4 thoughts on “Spring Clean Your Finances With 5 Easy Steps”

  1. Good advice!

    I no longer do an annual (or semiannual) “cleaning” because I use Excel to keep up with everything, by way of avoiding the springtime Tax Accountant Meltdown. Each month: download current transactions from bank and credit card accounts into spreadsheets; code as instructed by harassed Tax Acct. Then in another workbook, enter this month’s figures for investments. One spreadsheet there keeps track of total net worth, too; if I enter current value of the house and the car, the current balance of investments, the current bank account balances, and the current debt liability (which presently is nil, since I pay off all cards and have no other loans), it disgorges personal net worth. Add the business’s bank balance (it also has no outstanding debt) and voila: total net worth.

    It seems to be easier — or at least less painful — to do this on a monthly basis than to have to wrestle with a whole year’s worth of data.

    As for the credit reports: what a hassle!!! And I’ve found that notifying a credit bureau of an error does nothing. They will not correct errors. Period. Even if you point out that the error clearly is the result of a fraud (by someone you happen to know…). So that feels like it’s hardly worth the trouble. I do have a credit freeze on permanently, and so it’s unlikely that new frauds will be perpetrated.

    • At least you find out if there’s someone out there trying to spend money under your name. It helps to get the unwinding process started, I suppose. At least in theory. 🙂

  2. I like the idea of doing a spring cleaning with your money! It’s the perfect time. It’s a good time to review all the credit cards and accounts we have and make sure we really need to keep all of them open. I also adjusted my withholding for my consulting business, based on this year’s tax liability.

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