Are you feeling overwhelmed by your finances, or just not on top of your money management game?
With the start of a new season, it’s easy to get caught up in all the physical spring cleaning tasks.
But what about your finances?
Are they organized and on track for success?
Many people don’t know where to begin when it comes to organizing their finances or just don’t pay attention until an emergency comes up. Spring is the perfect time to take stock of your finances and get them in order. Yes, it’s time to do some spring cleaning – but this time for your finances!
Today, I will share 6 steps to help you create an action plan so that you can get out of debt, save more money and take control of your financial future.
?Watch the full show (?link at the end of the article) or read this show note for the most important nuggets of money wisdom.
Hello and welcome to Rise to Your MONEY POWER where we have honest conversations to empower you around your relationship with money.
I’m Pamela Plick. I am on a mission to empower women to confidently build wealth from the inside out! I help purpose-driven women to overcome feeling anxious, overwhelmed or stuck related to their personal relationship with money so they can become confident, achieve peace of mind, financial freedom and impact without fear. I do this through my signature programs and services, events and community.
Why Is Financial Spring Cleaning and Decluttering Important?
Organizing your finances can be a daunting task, but it doesn’t have to be. With the right mindset and action plan, you can get on top of your money management game in no time. Financial spring cleaning is the process of taking a detailed look at your finances and creating an action plan to get organized. It involves setting up a budget, tracking your spending, paying down debt, building an emergency fund, and reviewing and adjusting your financial goals. By creating an action plan and following through on it, you can start to take control of your finances and set yourself up for long-term success. Additionally, having a clear understanding of where your money is going will help you identify areas where you can save more or make changes that lead to greater financial freedom in the future.
So let’s dive into the steps you need to take for your spring cleaning of finances!
Step 1: Assess Your finances
It’s important that you take inventory of your assets and liabilities, income and expenses, debts, and any investments or savings. This will help you gain a clear picture of your financial situation so you can create an action plan to move forward. Analyzing your current financial situation also allows you to identify areas where you can make changes to improve your financial health.
Step 2: Organize your paperwork
Now that your taxes are done you probably have a stack of paperwork. This is a good time to get that paper organized. Not only does the paper clutter our homes but it contains information that can be used for identity theft. In addition, it is critical to be able to locate documents in the event of a disaster or death. As you organize your files, you should be able to answer these questions: Do you have all the records you should? What documents should you keep and for how long? How should the records be organized and where should you keep the records? To answer these questions, start with a good document checklist. These can be found online. Also, don’t forget to shred documents no longer needed.
Step 3: Check your credit report
Is your credit report accurate? Well, you don’t want to wait until you apply for credit to find out! A good practice is to request a copy of your credit report at least annually. In the United States, you are entitled to one free credit report per year. Go to: http://www.annualcreditreport.com.
It is important to check your credit report regularly to make sure that the information it contains is accurate. Checking your credit report also helps you identify any suspicious activity or fraudulent applications for credit in your name, so you can take steps to protect yourself from identity theft. To get an accurate picture of your creditworthiness, it’s important to review all three of your credit reports—one from each of the three major bureaus: Experian, TransUnion, and Equifax.
Step 4: Review your spending plan
We all know how important it is to live within our means but it is equally important to identify where your money is being spent. Reviewing your spending plan also helps you identify areas where you can potentially reallocate to fund your goals. You can save time and energy by using a personal finance software program to track and categorize your spending. It is an easy way to measure your spending to your goals.
Step 5: Review your goals
This is a good time to review your goals that you established at the beginning of the year. Have you made progress towards the goal?
If not, is it still important to you?
When setting goals, it is important to remember that the most successful plans are ones which are realistic and achievable. Before creating a goal you should take time to consider your current capabilities, resources, and time constraints. It is also important to set specific milestones along the way to help keep yourself motivated. As you review each of your goals, it is important to ask yourself if the goal is realistic and if it will help you reach your long-term objectives.
If the goal is still important to you, maybe you need to consider how to automate your approach. For example, if you have a goal of saving an additional $100 per month, you can set up an automatic transfer from your checking to savings once or twice a month.
By reviewing and automating your goals, you can ensure that you stay on track to reach your financial goals for the year. Automation is an easy way to keep yourself accountable and make steady progress towards achieving success.
Step 6: Update your financial plan
It is important to regularly review your financial plan and make changes as needed. As you progress through life, unexpected shifts in income, expenses, or personal goals can occur. Additionally, it’s a good idea to adjust your financial plan based on changes in the economy and tax laws. To stay on top of your financial planning needs, take the time to review your plan at least once a year or whenever major changes occur in your life.
Here are 6 major life stages when you need to update your financial strategy:
- Marriage
- Divorce
- Children
- Career or Job Change
- Retirement
- Death of a spouse
A financial plan is not a static document…..
It should be reviewed and updated on an annual basis and/or as your goals change. It is also important that you revisit and update your plan when you have major life changes. If you have had a major life change recently, now is a good time to schedule a meeting with your Certified Financial Planner™ professional.
Take some time to spring clean your financial house. Following the above steps will help you make progress towards building a solid foundation to your financial house.
To learn more about your relationship with money and what may be holding you back from taking inspired action towards achieving the financial freedom and impact you desire, take my free Money Type Quiz. It only takes 5 minutes and can change your life! https://pamelaplick.com/take-money-type-quiz.
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You can watch my full Rise To Your MONEY POWER Show episode here:
