It’s spring cleaning time, and in addition to pulling out the lawn furniture, cleaning the windows and taking down the last of the holiday lights, take some time to tidy up your finances while you’re at it.
Wintertime gets busy and sometimes it feels like you don’t come up for air until Tax Day. In the meantime, your finances can slip out of whack and need to be straightened up. Plus, springtime is a good time to handle some often-neglected annual financial check-ups.
All this can help anyone paying down debt by either freeing up extra cash or avoiding the kind of unexpected (or at least, unplanned) expenses that can derail even the best debt payoff plan.
Are you looking for a quick and easy way to start budgeting? Try Tiller speadsheets!Get Started
Whether it’s the bill for lawn care, deposits for summer camp or repainting a deck, one-time yearly expenses can wallop your wallet if you don’t plan for them. Check your calendar for things such as when an upcoming vacation deposit is due, and start budgeting for those costs and setting cash aside.
With services such as lawn-care, ask about prepaying for the summer now in exchange for a discount to cut your bill. Plan for Little League registration, summer camp and graduation gifts. Also remember that if you’re sending kids younger than 14 to day camp while you work, those costs are tax-deductible, so make sure you save those receipts and get the tax I.D. numbers of your providers.
Start shopping for plane fares, rental cars and theme park tickets, if that’s in the budget. The Bureau of Labor Statistics found that, on average, a domestic vacation cost $144 a day in 2013, including food, lodging, entertainment and travel.
You can use that as a good starting point to budget a trip; spending more or less as your situation allows. If you’re short on cash, start selling the family on the wonders of a staycation. Also look ahead to reservations and tickets for local events that tend to fill up once school lets out.
If you’ve been steadily lowering your debt balances, your credit score has likely improved, so take some time to look at refinancing your debt to speed your progress.
That stack of Unidentified Mailed Objects (UMOs) that piled up on your desk may include credit card or home equity loan offers. If you’ve got good credit, you can score some very nice 0 percent balance transfer deals for 12 months or longer, down from the typical 5 percent fee to as little as 3 percent. With home values rising, home equity is an option, once again. Even though rates are rising, loans are still cheap by historical standards for anyone with good credit.
Check your credit
Speaking of credit, you get one free credit report (not score) from all three major credit bureaus each year. You can arrange to get one report every four months to give yourself free credit-monitoring all year. Go only to AnnualCreditReport.com and nowhere else — especially anywhere that asks you to pay for a report or credit monitoring.
Remember that your credit report isn’t the same as your credit score. Your report lists all your credit activity, and your score boils all that information down to a simple, three-digit number that gauges your ability to repay new credit.
An increasing number of web sites offer different versions of free credit scores, including CreditKarma.com, CreditSesame.com, Quizzle.com and myBankrate.com. There are many different versions of credit scores, and while some are close to the original gold-standard FICO score, these free ones often are based on your credit at just one credit bureau. You can get a free FICO score at CreditScorecard.com, run by Discover, but that’s based on just your Experian credit score.
Look for money clutter
Take some time to look over your bank statements, credit card statements and utility bills for unauthorized charges that might have been crammed on, such as insurance, subscriptions or service fees. Call to get those canceled and refunded right away.
Also check any services you did authorize but no longer use, such as a premium channel on your cable bill, or a text messaging service for your phone. As well as an unused gym membership or a magazine subscription that automatically renews on a credit or debit card. Cancel those services, and you’ll have extra cash all year long.
If you’ve got a retirement savings account, chances are that the recent gyrations of the stock market have skewed your ratio of stock and bond funds. Rebalancing forces you to sell high, by cashing in some of your gainers, and buying low, by picking up stuff that’s cheap. Do this regularly and it adds as much as 1 percent to your overall rate of return.
Reward yourself: Once you’re done, use at least a bit of any cash you uncover and save for a good bottle of wine, a new bathing suit or fishing rod – you’ve earned it.
Brian J. O’Connor is the author of the award-winning budget book, “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese.”