May 23, 2022

Vanthuluutru

Fine Art Of Business

Why (And How) To Get Your Finances In Order Before Summer

5 min read

We’re living through uncertain times, and you’ve got goals for this summer and beyond. Here’s how to meet all of them.

As the snow thaws and the days (finally!) grow longer, many of us feel the need to do a little cleaning and get all that winter stuffiness out of our homes and lives. The spring often brings renewed hope, the promise of possibility — and the opportunity to make changes.

And while we fully support a good pantry clean-out, we have to ask: Are you paying the same attention to your finances? If not, it’s time to get cracking ASAP. We’ve been through two years of seemingly non-stop transition with our lives, careers and money, and now with inflation climbing ever-higher, it’s important to make sure everything is on track. After all, no one wants to miss an opportunity to save money, make smart investments, and get closer to your aspirations. 

To start with, take some time to review your budget — doing so is the first step to gaining control over your spending, says Raya Reaves, a finance coach and the founder of City Girl Savings. “That control will allow you to say ‘no’ to the things that hurt your budget, apply extra money to things that get you closer to your goals, and give you the confidence you need to manage your money at every level,” she adds.

Here’s a look at how to spring clean your money so you’re ready to embrace opportunities for fun and travel this summer, and so you’re set up for success in future. 

Remove and replace spending 

When you take the time to revamp, tighten up, and “spring clean” your budget, you’d be amazed at what you can find, Reaves says. “Running through your budget and spending with a fine-tooth comb allows you to pinpoint expenses or spending categories that can be removed or reduced,” she says. 

For example, maybe you’re forking over $50 a month for a beauty box or magazine subscription that you truly never use. You may enjoy getting the mail (I mean, who doesn’t) — but the products or pages are rarely fully used, so you’re not only spending unnecessarily, you’re creating clutter.  By canceling that subscription, you can now put that same $50 toward your ‘travel’ savings account (or similar) which gives you much joy. Over the next few months, that simple change can pay for a plane ticket. “Taking the time to review your budget and spending allows you to make sure your money is being spent on the things that matter in your world,” Reaves adds.

Evaluate your subscriptions: gym, meal planning + everything in-between 

Most of us are guilty of not having a firm grasp on our monthly subscriptions. There are the streaming apps, the bundled boxes, the newspaper delivery, the meal plans, gym memberships — the list goes on. Now, consider how many of those auto-renew directly from your bank account. Since you don’t have to physically write a check or go in and pay for it, it’s easy to lose track of unnecessary spending, says Lori Gross, a financial advisor at the Outlook Financial Center

Let the first blooms of the spring season be your cue to page through these to understand better what you’re really using — and what you’re not. “Look at what is important and cut those items that aren’t. Once you’ve done this, reallocate those funds to savings, emergency fund or make larger contributions to your retirement plan, whatever is best for you,” she says.

Reassess your financial goals

It’s time to get your money problem-solving skills in motion with these questions, Reaves says: 

  • Are you still trying to pay down your debt? 
  • Are you saving for a dream vacation? 
  • Are you closer to being able to buy a home — or pay off your mortgage?
  • Are you focused on your emergency fund? Or college savings for your kids?
  • Are you dealing with an unexpected expense that has you anxious?

Process through those questions, and then look to make a list of your newly re-evaluated goals, and make any changes where necessary, you can tighten up your budget to make sure you’re allocating money to those goals. Remember, it’s okay if your aspirations have changed from last year to this year, or from month to month. Life throws us many curveballs, and our wallets have to be able to adapt to the shifts. 

“If you’re ahead of schedule with your financial goals, you get to allocate money to other categories,” Reaves says. “Spring cleaning your budget allows you to be up-to-date with your financial goals and ensures your budget allocates your income to reach those goals.” And hey — you may even realize you’re on track with everything and don’t need to make a huge transformation to remain impactful.

Make money off of your spring cleaning 

No, a lot of those pandemic clothing purchases just aren’t working for you anymore. So, the first step is to clean out your closet — but do it thoughtfully. What things can you sell for cash? Yes, it does require an extra step, but Bodge says selling things on sites like MPB.com for camera equipment or ThredUp for clothing can quickly generate cash where there was none.

And for things that you can’t sell, Bodge says it can be helpful to contact local non-profits that will come to your home and pick up your unwanted items. “As a bonus, whether you are home or not, they will leave you a receipt to use as a tax write-off,” she adds. Check out PickUpPlease.org to get started. (Of course you can always make a run to your local Salvation Army, but it’s nice to get a pickup when you can!) 

Do a check-up on all your accounts 

How much are you saving every month? Many of us discovered we were able to save more during 2020, which is great — but we should be careful that we don’t have too much of our investments in cash, says Kerry Keihn, the chief operating officer and financial advisor at Earth Equity Advisors. “If you have a work retirement plan, you can increase your 401(k) contributions, or you can also open a personal retirement account,” she says. 

During this process, go ahead and figure out how much you have stowed away in all of your accounts, which could be scattered and disorganized. (Trust us, we get it.)  “Life can get hectic, especially if you’ve changed jobs, and it’s very easy to forget about a retirement plan through a former employer,” she says. “You can check with previous employers to see if you still have funds left in workplace retirement plans at those companies. Having a smaller number of accounts to review can make it easier to stay on top of your budget going forward.”

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