Financial Spring Cleaning
Spring fever is in the air in a big way this year, but before you jump to grab your rakes and lawn equipment, may we suggest spending just a bit more time indoors. Spring is a great excuse to get your financial house in order and set yourself up for a successful summer and rest of the year with some spring cleaning for your finances.
Paying off any lingering holiday debt
You’re not alone if you’ve come this far into a new year carrying debt from purchases in 2016. A study by Consumer Reports1 found that nearly 7% of all consumers begin to accrue new debt for holidays before paying off the last year’s. Easier said than done, certainly, but if you can come up with a plan to attack your debt strategically, you’ll be able to sleep easier at night.
Getting your taxes in order
Whether you’re hoping for a big refund or asking your accountant to be gentle when he or she breaks the news, tax season can be daunting for just about anyone.
Making it less so can start with a few simple, baby steps:
- Set aside an hour, just one hour, to take a paperwork inventory. Maybe this is a one-time occurrence or, even better, maybe you can eventually train yourself to do this on a regular schedule. Use that hour to sort through bills and snail mail statements to create physical files.
- Take another 30 minutes and locate, download, or print out any and all e-statements you may have from w2s to 1098s and everything in between. If you’re keen to go completely digital, this step may include creating digital files and scanning any physical paperwork into it once you’ve collected all the downloaded tax documents you need.
- Finally, dedicate another hour, or 30 minutes, depending, to rounding up all of your tax deductible receipts and paperwork. This includes any charitable giving records, receipts from donations, and receipts from deductible purchases. Collect them all into a file and you’ll be one more step closer to a less stressful tax year.
Planning for big purchases
Something we often overlook when thinking about our financial spring cleaning is our long-term goals. Is this the year you want to replace your refrigerator? Maybe the roof, gutters, or water heater are nearing the end of their functional life. Whatever it is that either needs to happen, or you’d like to accomplish from your 2017 goals, financial spring cleaning can be a great way to get there:
- Make a realistic plan for your purchase. Can you afford both the new car AND the small bathroom remodel? Evaluate your disposable income, savings, debt, and come up with one or two big purchases that could make sense for you to invest in during the year. This can be a good time to consider whether you’re going to finance any big-ticket items.
- Create savings accounts specifically for your big purchase item(s) and see if your bank has any online savings tools that can help you meet your goal. Many online banking platforms have helpful tools and tips designed to make it easier to achieve your savings goals.
However you decide to prepare for the coming year, a quick spring cleaning for your finances can be a relatively simple way to start down a smarter fiscal path. We’re ready to help at Dime, whether you’re looking for the right savings account to help you meet that big purchase goal, or access resources to help you find the best ways to pay down debt, we’re available online, by phone (1-800-321-DIME), and in any of our branches with the right guidance to get you started.
1 Market Watch; 7 Tips for Financial Spring Cleaning, March 2015. http://www.marketwatch.com/story/7-tips-for-financial-spring-cleaning-2015-03-12