Spring clean your finances

Streamline planning for the future by getting organized.

Spring is the perfect time to get your finances in order. Being on top of your finances can help you feel more in control, while reevaluating your bills and purchases more often can help you stay within budget. Also, you’re more likely to think ahead and plan for the future if you get and stay financially organized.

Start by organizing your paperwork

Life events like selling or buying a home, preparing for retirement or a medical event can leave you with an accompanying mountain of documents. Most people aren’t certain what papers are important to hold onto. In a pinch, they either can’t find exactly what they need or realize they never saved it in the first place.

Creating a physical and digital filing system is often the simplest way to organize your documents, making it easier to locate important papers when you need them. Sort your documents by major category like investing, medical expenses, loan documents, estate planning, and home repairs by designating a folder for each. You can then break down each category by year. Be careful to shred or delete any documents you decide you no longer need.

Run your credit report

Check your credit report every three months for derogatory changes and look for any signs of identity theft. You can check with the three credit bureaus – Transunion, Experian and Equifax – individually, or get a consolidated report from Credit Karma or Credit Sesame.

If you find derogatory changes like missed payments or foreclosures made in error, you can dispute them with the credit bureaus. This is crucial, as derogatory marks will remain on your credit report for seven years.

Take an annual look at the big picture

Use spring as an opportunity to review your spending habits , as well as income changes, to identify ways to optimize your finances for the rest of the year. Decide what your highest priorities are and consider ways to boost your financial health. A little creativity could help you get closer to your goals more quickly.

Some practical tips include refinancing debt to lower your monthly payments, cutting unnecessary costs and canceling subscriptions you no longer need. You can even earn quick cash by selling those gently used designer shoes hiding in the back of your closet.

Creating and following a budget gives you the freedom to spend your money the way that best supports your goals. One easy way to do this is by automating as many payments as possible and being diligent with your discretionary spending.

As you take control of your finances and prioritize your goals, don’t forget to consider retirement. Most people want to work less in the future or retire altogether, and as costs rise over time due to inflation, it’s important to make sure you save enough to support the lifestyle you want to maintain. It’s always a good idea to increase contributions to retirement accounts, but it becomes more essential the closer you get to retirement age as there is less time to accumulate interest or retirement gains.

While organizing your finances takes some time and effort, the payoff in the long run is well worth it. It gives you the freedom to save for the goals that matter most to you, and enables you to have funds in place when you need them for an emergency or major purchase.

Source: New York Life