How to Spring Clean Your Finances

Just as spring motivates us to clean out our closets and dust those ceiling fans, it’s also the perfect time to refresh your financial house. A thorough financial spring cleaning can help you save money, reduce stress, and set yourself up for a more prosperous year ahead.

Here’s how to declutter your finances and make your money work harder for you.

Start by taking inventory of all your financial accounts.

You’ve probably accumulated a number of accounts over time that you may no longer use, such as old 401(k)s from previous employers, savings accounts opened for specific goals, or credit cards you signed up for to get temporary rewards. This fragmentation makes it difficult to track your complete financial picture.

Consider consolidating retirement accounts to simplify management and potentially reduce fees.

For everyday banking, aim to maintain one checking account and perhaps two savings accounts – one for emergency funds and another for specific goals. Consider closing traditional savings accounts that earn low interest and charge unnecessary fees, and instead, transfer your savings to a high-yield savings account like Growth Savings. You’ll have fewer accounts to keep up with and your money will be working harder for you. If you’re saving for the long term, consider opening a Growth CD to lock in a competitive interest rate for the full term.

If you have too many credit cards, identify the ones that provide the most value based on your spending patterns and consider closing rarely used cards to simplify your finances.

Keep in mind that closing old accounts can impact your credit score temporarily, so it may be a good idea to retain your longest-established cards.

To gain financial clarity, you need to understand exactly where your money comes from and where it goes. Create a system to track all income sources and categorize your expenses.

Review your recent bank and credit card transactions and group expenses into categories like housing, transportation, food, entertainment, and savings. Look for patterns and identify areas where you can cut back. Are you paying for multiple streaming services you rarely use? Can you increase your meal planning to cut back on takeout meals?

Once you’ve categorized and covered your expenses, you can feel confident in setting up automatic transfers to direct a portion of each paycheck into savings before you have a chance to spend it. For example, it’s easy to set up recurring transfers into a Growth Savings account. Even small amounts can accumulate significantly over time, supporting you in making bigger purchases or upgrades that require saving for.

Consider using digital tools like budgeting apps that connect to your accounts and categorize expenses automatically. These tools provide insights into your spending habits and help identify savings opportunities.

Physical financial clutter – like credit card offers or monthly paper statements – not only create a mess and can make important documents hard to find when needed, but they can also pose a security risk.

Start by shredding documents you no longer need. You should keep tax returns for seven years, but supporting documents like receipts can typically be trashed after three years.

Pay stubs can be discarded after reconciling with your W-2, and most utility bills can be tossed once the next bill confirms payment.

For documents you need to keep, create a simple filing system organized by category and year. It can be a physical or digital system. Consider scanning important papers and storing digital copies in a secure cloud service with encryption.

If you’re still receiving paper statements, switch to paperless options whenever possible. This reduces clutter and helps protect against identity fraud resulting from mail theft.

The key to financial success is to create systems that make good habits automatic.

Set up automatic bill payments to avoid late fees that can damage to your credit score. Review all your recurring subscriptions and cancel those you don’t use regularly. And set up recurring deposits to your high-yield savings account to build savings faster, without even thinking about it.

Also, create alerts for your bank and credit card accounts to stay updated on account activity, and monitor any unexpected money transfers.

Create calendar reminders for important financial dates, such as tax filing deadlines, insurance renewals, or when to review investment allocations. When those reminders pop up, take the opportunity to shop around for better rates on insurance policies and investment services.

Spring cleaning your finances isn’t just about organization; it’s about creating clarity that leads to better decisions and more money saved. By decluttering your financial life, you’ll reduce stress, avoid unnecessary fees, and position yourself to build wealth more effectively in the year ahead.

Start fresh this spring by opening a high-yield savings account or adding funds to your Growth Savings account to build a brighter future. 

Disclaimer: This article is for general information and education only. It should not be considered financial or tax advice.