Lifestyle

Timely tips and tricks for spring cleaning your finances

Written by

Jonathan McFadden

Posted

March 5, 2020

Oh, spring! It’s our favorite time of year to take a hard look at how we’ve been managing our money and reducing our debt load.

OK, so maybe that’s not at the top of your mind this season. Still, it can be a great time to reset and recharge your finances so you can sweep bad spending habits out the door (and not just under the rug).

Here are a few ways you can do that.

Spruce up your budget

If you haven’t been sticking to your budget this year (or haven’t started one yet), now’s the time to get serious about keeping your spending under control. Remember, a budget doesn’t mean you can’t buy things you enjoy. It just prevents you from spending beyond your means or landing in a financial bind that’s hard to untangle.

Not sure where to start? Use this resource to figure out the nuts and bolts of creating and keeping track of a budget.

Dust your debt away

It doesn’t make sense to stay stuck in high-interest debt for another year. Explore your options and develop a debt payoff plan that works best for you. Here are a few ideas to get you started:

  • Get a balance transfer credit card. Move your high-interest credit card debt onto a new card with better terms, a lower rate and, possibly, a 0% introductory APR. You may even be able to transfer other kinds of debt onto the new card, like your auto loan or student loans.
  • Take out a consolidation loan to lump together your high-interest debt and pay it off all at once. Yes, you’ll still have to repay the loan, but you’ll wind up debt-free much sooner than you would’ve otherwise.
  • Use a debt relief company to negotiate your debts with creditors so you get better monthly payments and interest rates. If you’re savvy enough, you might be able to convince some creditors to forgive your debt obligations completely.

Uncover your credit score

Keeping tabs on your credit score and credit report is critical if you want to understand your financial health. It’s the best way to know where you stand with creditors, and it gives you a good indication of the loans you may be able to qualify for. Lenders especially rely on your credit score before approving you for a mortgage, car loan, credit card, etc., so you should have it handy.

We make keeping up your credit score real easy with the LendingTree app. Download it today for unlimited access to your credit score and a snapshot of your credit report, whenever you want. Plus, you’ll get detailed insights on how you’re doing on the factors that make up your credit score, and what steps you can take to improve it.

Clear your paperwork clutter

A drawback to managing bank accounts, credit cards or anything else linking your name to money is all the paperwork. And if you’re like a lot of people, you might stuff all that mail in a folder, drawer or desk until you need it again. Spring is the perfect time to dig through the clutter and organize your statements, paid-off bills, notices, etc. for your own financial record-keeping. That, or you can shred the stuff you don’t need anymore. That way, you lower the risk of people getting their hands on documents with your personal information.

Review your tax withholding

The days or weeks after you get your latest tax refund is a good time to think about your withholding and determine how it’ll affect you next tax season. The amount of taxes you choose to withhold from your paycheck affects whether you’ll get a sizable refund next year or whether you’ll owe the IRS. Take a look at your W-4 and see if you can claim more allowances to better your chances of breaking even next year.

Wipe out late payments

Missed or late payments do major damage to credit scores (that’s because payment history is the most important part of your score). If you’re behind on what you owe, take the spring to catch up so you don’t get trapped in a cycle of kicking your payments down the road. Any extra income you may earn from your tax refund, side hustle or a bonus or raise at work can help close the gaps. If those options aren’t feasible, try saving up a lump sum so you can knock your late payments out all at once. Make on-time payments a consistent habit, and you may see your credit score gradually rebound.

Grow your retirement savings

Most Americans have no idea how much money they’ll need for retirement. Don’t be one of them. Use this season to devote more money to your retirement savings. That could mean contributing more to your 401(k) or investigating tax-free investment accounts, like a Roth IRA or municipal bond. Try your hand at the stock market by investing money in a mutual fund, or make your savings go farther with a high-yield savings account.

Again, if you want to freshen your finances, download the LendingTree app. Get a comprehensive overview of your financial health with tips and insight on how to eliminate your debt, build more wealth and plan your financial future.