Now that winter is over, you likely have a ton of grime and dust build-up in the corners of your home and other hard-to-reach areas. Spring cleaning is probably underway. Similarly, now is a good time to spring clean your finances. Here’s how to get your financial cleanup underway.
Check your credit
Make sure to order copies of your credit report. You are entitled to one free credit report every 12 months from each of the three major credit reporting agencies (Equifax, Experian, and TransUnion). You can get copies of your credit reports by making a request at annualcreditreport.com. Check to make sure all of the accounts listed are yours, your address is correct, and that old debts (such as a chapter 7 bankruptcy from 10 years ago) have been removed from your credit report.
Update savings goals
Are you still on track with savings? Take a look at your emergency savings account and assess whether you are where you need to be at this point. Most financial experts recommend starting out with at least three to six months of savings, with a goal of eventually reaching 12 months. If you’re off target with emergency savings, take a look at your bank account history, to see where things went wrong. Are you overspending, or withdrawing money for non-emergencies? Are you making less money, so you have to dip into savings more often? If cash flow is the issue, update your savings goal and start again. If it’s just a matter of self-control, you may need to enlist the help of a money buddy who can help you stay focused.
Evaluate your budget
Are you sticking to your budget? If you find that you are always going over your budget or you’re ignoring your budget altogether, it’s time for a tune-up. Sit down and take a look at how much money is coming into and going out of your household each month. Then work on a realistic budget from there.
Evaluate your salary
Are you being paid what you’re worth? Many employees are asked to do more work but their salaries don’t change to reflect the additional responsibilities. The cost of living is always on the rise, so it’s wise to review your salary and benefits from time to time to see if you’re still on track. One reason you may be living from paycheck to paycheck is that you simply don’t earn enough money. After months of extreme belt tightening and watching every penny, you may decide that it’s either time to ask for a raise or time to start looking for a new job. If a raise isn’t in your future, there are other ways to make ends meet. One way to add a few bucks to your check is to take a look at your withholdings. It’s possible that too much money is being taken out of your check. If you’ve experienced a major life change, such as the birth of a baby, you’ll want to fill out a new W-4 form and adjust your withholdings.
More from Money & Career Cheat Sheet:
- 5 Tips to Negotiate a Higher Salary
- Need Help Managing Your Financial Goals? Find a Money Buddy
- 5 Factors That Don’t Affect Your Credit Score