Many of you probably have a spring-cleaning ritual. It is the time of the year when you wash the windows, air out the bedding and declutter. However, have you ever thought about sprucing up your budget?
That may sound strange, but it is the perfect time of year to take a good look at your finances. We’ve got some ideas of what to do to spring clean your budget.
1. Check Your Envelopes
Now would be a good time to make sure your cash envelopes (see how they work here) have the right amount in them. Take a look at your spending and determine if you need to make adjustments (up or down). Even if you don’t use cash, you should do this with your virtual envelope system as well.
You also need to make sure you don’t need to add new envelopes. Perhaps you find that you always go to your dining out envelope to get money for family fun. Why not make a separate envelope just for family fun? Now you have envelopes with a designated task and don’t need to take from one to fund another.
2. Clean Up Your Bills
Take a look at your spending. Are you paying for things you don’t need? Sometimes, we get so used to paying regular expenses that we ignore them.
For instance, you might not be ready to cut cable completely. However, are you paying for channels you really don’t watch? Go through your bills and make sure you aren’t wasting money on things you don’t use. (You can see seven easy ways to lower your cable bill here.)
3. Looking for Discounts
One of the goals of a budget is to help you keep as much money in your pocket as you can. Look back on your spending and you may discover you have items that could offer you a discount.
Believe it or not, there are many utilities that offer discounts to customers. You just have to know how to get them. You can take the time to research what others pay and call each company and try to negotiate your rates.
Once you make the phone calls, take additional steps to lower your utility costs. Your budget will thank you.
4. Establish New Goals
Goals are a tool we use in many areas of life, but what about budgeting? The truth is, you might already be setting goals and without realizing.
A goal could be as simple as paying down one credit card. It might be going on a dream vacation. Perhaps it is buying a car without a loan, working through some home repairs, or paying for the first year of college tuition.
Whatever your goal, make sure you write it down. That instantly solidifies the goal. Then, you can place it somewhere you see it, every single day.
The more you see the goal, the more you remember what you want to achieve and hopefully avoid impulse purchases.
5. Lower Your Grocery Bill
This may seem like a strange one, but it can make a huge difference. It might mean shopping at a somewhere else.
For example, I slashed my grocery budget by switching to a different store. By using this store to get most of our food, I dropped our grocery spending by more than $200 a month.
6. Transfer Your Credit Card Balance
This is the perfect time to look into getting a card with a 0% interest rate And transfer your balance to the new card. This will help eliminate interest on your balance, which might help you pay it down more quickly.
Just watch the introductory period. You need to pay the balance in full or transfer it again before the period lapses. Otherwise, you could end up paying even more in interest. (Interest rates are often based on creditworthiness — See two of your scores free on Credit.com.)
7. Lower Your Cellphone Bill
Most people think they are stuck paying whatever their wireless provider charges. That is true, for the most part.
However, you might be able to negotiate a lower rate. You may want to consider changing providers completely. Just call and see what happens.
8. Automate Your Savings
If saving money is difficult for you, you are not alone. Many people don’t have the discipline needed to save money every month. That is where automation helps.
You can see if your employer allows for your check to be directly deposited into multiple accounts. If so, have them deposit some of your paycheck directly into a savings account. If that is not an option, set up an automated transfer from your checking account into your savings account each month.
Once you do that, you will need to adjust the spending in your budget. Even saving just $25 a paycheck is better than nothing. You’ll be surprised at how much you do not miss the money.
9. Review Your Insurance
Take a look at not only your auto insurance but also your homeowners and life insurance.
Do some comparison shopping to make sure you are getting a good rate. If you get insurance from different providers, check to see if any of them offer any type of bundle discount. That might be reason enough to move all your coverage under one company.
If you’ve built up your emergency fund, you might be able to raise the deductible and lower your monthly out-of-pocket cost and save more than the deductible costs. Increasing your deductible from $500 to $1,000 could save you a lot of money in your monthly costs.
In addition, if you do not yet have life insurance, now is the time to consider purchasing it. It isn’t for you. It’s for your family. Read more about why you need life insurance.
Taking the time to review your budget is wise, but we don’t always take a close look. Plan to do this each year along with your spring-cleaning schedule and you’ll never forget again.