While spring-cleaning your closet or car, taking time to also clean up your financial house can help ensure yearlong stability.
With spring now officially here, it’s not only time to clean your home or your car; it is also the perfect time to adjust and review your finances. Spring will quickly turn into summer, and with lingering inflation, there will be ample opportunities to spend money and break your budget, even while everything is more expensive.
Before you head “outside,” stop and take a moment to review where you are with your finances and assess what changes you may need to make — yes, right now. It’s only March, and getting through the end of the year with financial stability may take some elbow grease and a few strategic money moves.
Here are four action items to help get your financial house in order:
1. Review your budget
On a weekly basis, write down a list of the money coming in and money going out, even for small things. Having a full understanding of your input and output will allow you to make better budgeting decisions because you will see where your money is going. It is very easy to get in the habit of just swiping and not really seeing in real time where your money is going. Writing everything down — or even going into your banking app at the end of the day — can help you see what you are actually spending your money on and if that spending makes sense.
2. Organize your financial goals and see what is working — and what is not
A financial spring-clean or refresh mentality can help you review, update or reinvigorate objectives and goals you may have set at the start of 2024. A few months into the year, it’s a good time to determine what is working and what is not and revise short- and long-term financial goals. For example: if you set a goal of paying down a credit card in three months at the beginning of 2024, you can pull out those card statements and see if you are on track to reaching that goal. If not, what do you need to do to make that happen — or do you need to reassess the timeframe?
3. Maximize your retirement contributions
Especially for IRA contributions, you should try to maximize these accounts. For the 2023 tax year, for IRA accounts, you have until April 2024 to maximize contributions. For IRA account holders looking to get started on their 2025 contributions, you should contribute as early and often as possible, ideally setting up automatic contributions, to take advantage of the magic of compound interest.
4. Establish an emergency fund!
Financial experts like myself will never stop saying this, but in an economic environment of high interest rates, lingering inflation, and layoffs that have occurred across several industries, building an emergency fund is the best move you can make toward financial stability. An emergency fund not only allows you to pay your rent in case of job loss or illness, but it also keeps you out of high-interest debt.
When you have a well-funded emergency fund, you don’t need to take out a personal loan or use credit cards to cover bills and expenses in case of an emergency. It really is the best financial move you can make.
So don’t wait — spring clean your financial house — and thank me later.
Jennifer Streaks is Senior Personal Finance Reporter and spokesperson at Business Insider and a financial contributor at theGrio. A nationally recognized expert on money and affordable lifestyle living, Jennifer is an established financial columnist who has been featured on CNBC, Forbes, ABC, MSNBC, CBS, and more.
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The post Before heading ‘outside,’ spring-clean your finances in 4 steps appeared first on TheGrio.
