As the tulips start to bloom, Emily Zillig reviews her monthly bills and looks for ways to cut costs. Zillig, who lives in Seattle and helps others align their money management with their bigger goals, says the spring season is a great opportunity to declutter finances. That’s why around tax time, she reviews her phone and cable statements to see if there are services or fees she can trim.
Recently, she decided her phone company’s customer service department wasn’t what it used to be and she was paying more than she wanted for the service, so she switched providers. “Every time I paid them, I felt a gnawing feeling in the pit of my stomach. Now my phone bill is a fraction of what it was, all because I followed that misalignment,” she says.
Spring cleaning isn’t just about vacuuming and donating old clothes. It’s also the perfect time to sort through financial paperwork, review bills to look for fixable leaks and assess whether your financial habits reflect your bigger goals. U.S. News talked to a handful of financial experts about savvy money moves for freshening up your finances:
Get organized. This tip sounds like traditional spring cleaning advice, but it applies specifically to your finances, says Regina Leeds, author of the new book, “Rightsize…Right Now! The 8-Week Plan to Organize, Declutter, and Make Any Move Stress-Free.” Leeds says organizing your paperwork starts with knowing where important documents are and tossing the ones you no longer need. She suggests maintaining a simple filing system that lets you store all your essential papers in easy-to-find folders. That way, if you suddenly need your child’s birth certificate for school, you can find it in seconds.
Organizing your closet and drawers can also help you save money, Leeds says. “When your home is streamlined, you’re less likely to buy things that you don’t need,” she says, because you know where to find items, like a white blouse or new batteries, when you need them. “Being organized prevents me from making impulse purchases,” she says.
Automate your bills. Doing so quickly eliminates paperwork because you’ll no longer receive those bills in the mail, and it also guarantees you won’t forget to pay them, Leeds says. Avoiding late payments also helps you improve your credit score over time, she adds.
Negotiate with your service providers. Like Zillig, Leeds suggests playing hardball with service providers, particularly cable. “They want to keep you as a customer. You can say, ‘I’d hate to leave you, but I just got this great offer in the mail,'” and see if they can match the lower price. Another option is to use free or less expensive services such as Hulu and Netflix, she adds.
Say goodbye already. Whether it’s a dusty old record (and you no longer have a record player) or clothes that belonged to your deceased grandparent, it might be time to say goodbye. Leeds says she sees people hold onto items for emotional reasons for far too long. In the end, it often ends up burdening whomever is tasked with handling a loved one’s estate after death, and the items end up in the trash anyway.
Sell what you no longer need. While you’re clearing out closets and basements, Zillig suggests selling what you no longer need on Craigslist, eBay or a yard sale. “If you bring in your local friends and family, it’s a triple win: You clear stuff out, you make money and you hang out with great people in the process,” she says.
Max out contributions to your IRA. Since April 15 marks the last day you can make 2014 contributions to IRA accounts, now is a great time to max out the savings you are directing into those tax advantaged accounts, says T. Michelle Jones, certified financial planner and vice president at Bryn Mawr Trust in Pennsylvania. “Some individuals might not realize they can make spousal contributions, too,” she adds. For 2014, the limit for contributions to traditional and Roth IRAs is $5,500 (with an additional $1,000 allowed if you are age 50 or over).
Increase your 401(k) contributions. Also on the retirement front, Jones suggests increasing contributions to your 401(k) by 1 percent around the same time that you receive any annual raise. That way, you won’t miss the money, she says, and you’ll reach your retirement savings goals more quickly.
Withhold less money throughout the year. If you received a sizable tax refund after filing your 2014 returns and you expect to earn a similar amount of money this year, then you might want to consider adjusting your W-4 form so you are not overpaying the federal government throughout the year. “You can do something more useful with that money than give it to the government,” Jones says.
Check up on your emergency saving account. “It’s important to have enough savings to cover six months of expenses should you get laid off,” Jones says. She suggests reviewing your savings account, and make any adjustments at least once a year.
Rebalance your portfolio. Another annual task that goes well with the spring season — since you have your investment paperwork handy for the tax deadline — is to rebalance your portfolio. As the market goes up (or down), it can throw off your allocations so they no longer reflect your goals. “Make sure you’re on the right track,” Jones suggests, by shifting money into more or less aggressive securities to reflect the risk level that you want.
Shred documents when you get rid of them. While it’s a great idea to sort through old financial documents you no longer need and toss them, you want to be sure to shred any paperwork with identifying information. On the same note, Becky Frost, senior manager of consumer education for Experian’s ProtectMyID service, recommends shedding some weight from your purse or wallet, too. She suggests only carrying what you absolutely need, which means leaving your Social Security card, passport and other documents at home.
Update your passwords. While you’re thinking about protecting your identity, you should also take the time to update any old passwords to more complicated, hard-to-guess ones, Frost adds. She suggests having a different password for every account — no cheating by sharing passwords for retail and banking accounts, even if it makes remembering them easier — and making sure they are least eight characters long and include a mix of numbers, special characters and upper and lowercase letters. Likewise, set up password protection on your phone so if you lose it, someone can’t access all your data.
Review your online friends. Spring cleaning includes digital decluttering, too. Frost suggests reviewing your social media friend lists to make sure you know who you’re sharing information (and photos) with. Alsoavoid friending strangers who might be scam artists looking for ways to break into your digital accounts (or even physical home).
A little financial spring cleaning can leave you feeling lighter, safer and even a little richer!
More from U.S. News
9 Financial Tools You Should Be Using
12 Ways to Save More in the Springtime
10 Ways to Stay in Shape on a Budget
Your Step-by-Step Financial Spring Cleaning Guide originally appeared on usnews.com
