Updated: Feb 20, 2020
We can finally feel the warmth in the air and the songs of the birds, which means it’s nearly spring! If you’ve had a winter like we’ve had in Nebraska, you’re probably more than ready for the new season. Spring represents a time of growth and renewal and it can also be an excellent time to do some work on your finances. Though most of us have heard of spring cleaning (though we may not have actually done it), far fewer of us have thought about doing this to our finances. As a young adult who may just have purchased a home, started a career, or is thinking about a family, now is the ideal time to start a habit of examining your finances in the spring. Here are four areas you should check into.
If you’ve developed multiple streams of income or settled into a relatively high-paying career, you may think that the days of watching your spending are over. However, getting too entrenched in this mindset is a bad idea as spending can easily get out of control if it’s not monitored. Go over your monthly bills as well as receipts from the past few months to see where your disposable income is going. Many of my clients have had eye-opening experiences when they’ve realized they spent enough on gourmet coffee in the past three months to finance a trip to Vegas! If you find something in your spending that can be eliminated, it provides a great opportunity to redirect that money to savings or to pay off debt.
Get Updated on Debt
I’ve warned many a teenager about the dangers of student loans and credit card debt, but it’s a fact of life that a majority of young adults are still dealing with these bills. Now is a good time to take another look at your debt and find out if any interest rates have changed, if you’re close to paying any bills off, or if now is a good time to put a debt snowball plan in place. If you’re steadily paying debt off, this should be an empowering exercise as you feel yourself getting closer to the finish line of being debt-free.
Re-evaluate Insurance Needs
Insurance needs change rapidly at this age. If you’ve moved from an apartment to a purchased home, if you’ve gotten married or had children, if you’ve changed careers, or if you’ve purchased a new vehicle, your insurance needs are going to be altered. It’s easy to forget about these things when you’re going through major changes, but it can cause a lot of problems if you need to make a claim and don’t have the proper coverages or deductibles. If you have had any changes in your life, it’s a good idea to meet with your insurance provider to make sure everything is up to date.
Get Rid of Paper Clutter
Most young adults rely on electronic means of record-keeping, but there are still plenty who have drawers full of receipts or file folders cluttered with insurance policies and credit card statements. Embrace the ‘spring cleaning’ aspect of this exercise and scan any documents you need to keep, then shred them. Clearing out that extra paper will make you feel more organized and less stressed.
Spring is an excellent time to rejuvenate many parts of your life, and finances should be included in this list! When you do a good spring cleaning of your finances, you can move forward with confidence knowing that nothing is falling through the cracks.
Have questions on evaluating your finances this spring? Leave a comment below and I’d be happy to help!