Spring is all about getting rid of the old and bringing in the new. Most of us spring-clean our garages and cosmetics and give our closets and hair styles total makeovers. But how many of you give your finances a fresh start for spring? (Our guess: very, very few.) As you file your taxes this year, though, keep in mind that this is the perfect time of year to take a look at your finances and make any necessary changes. I’m always wondering when am I getting my refund so I can start saving, while others are waiting on their refund so they can start spending. So, where do you start? Read on for 4 quick and easy ways to makeup over your money.
Track Your Income & Expenses – Do you spend more than you make? If you don’t know the answer to this that is ok; however you want to start to track the money that is coming into your bank account as well as the money that is going out. An easy way to track this is in an excel spreadsheet. List out all of the income that you are making as well as all of the money that you are spending on bills, clothes, shoes, coffee, going out to eat and any other expenses that you might have. Once you start to track and take a look at both your income and your expenses, you’ll be able to make better and healthier financial decisions.
Cut Your Expenses – After you have taken a look at what you are making (and spending), cut your expenses as much as you can for 30 days. Easier said than done? Not at all! In order for this to be both easy and fun, you really want to get creative. Take a look at your expenses one by one starting with the biggest ones first. Try brown bagging your lunch, cutting in half the amount of times you go out to eat, shopping around for cheaper car insurance and bundling services like phone, internet and cable. Once you find places where you can cut back on spending, keep track of the savings.
Pay Down Debt – Whether it is credit cards, student loans or any other debts you may have, working to pay them down is key. You can usually call your credit card lenders and negotiate your APR rates if you pay on time and are a good customer (meaning you’ll have a lower monthly payment). You also want to start to pay more than the monthly amount due on your credit cards and loans, because the more you overpay on a monthly basis the faster you will get out of debt. So, even if you can only pay a little bit more one month, go for it, because every little bit counts.
Start Saving – Being a savvy saver is super sexy! And every penny counts. It is recommended that you have 3-6 months of expenses saved in case of an emergency – and while this may be overwhelming, saving has to start somewhere. To start, determine what you’re willing and able to save each month and consider having that amount automatically deducted each month from your account into a particular savings account. This will eliminate you from forgetting to save or spending it as it will automatically come out of your account each month. Remember you always want to pay yourself before you pay anyone else!