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Many of us have already completed our spring cleaning. We’ve scrubbed our homes from top to bottom, filled our garbage cans with junk, and driven bags of extra items to charity donation centres. Unfortunately, spring cleaning isn’t over just yet. Now, it’s time for financial spring cleaning.
This isn’t much more pleasant than regular cleaning, but like all other tasks, it must be done. In fact, it’s best to get it all completed at once, so you can enjoy the rest of your spring and summer seasons uninterrupted. Now that we’re approaching the halfway point of the year (woohoo!), now is the time to reflect, plan…and clean.
Check in with your financial goals
As we near the middle of the year, it’s a good time to check in with the financial goals you set for yourself back in January. These may have been goals focused on limiting spending, increasing savings, investing, etc. If it has anything to do with money, now is the time to see how well you’re performing.
Are you on track with your goals at this point, or do you need to make some adjustments to get back in the game? You can sort these details out now, so the second half of the year can be as successful as possible. If you never set any goals this year, you can do so now – it’s never too late to start thinking about your finances.
This process likely means reviewing your budget. Budgeting is no fun, as everyone already knows, but it’s a necessary part of your financial health. Think of your budget as a way to prioritize all the things you really want to spend money on, and where you can cut back. Seeing where you can save and spend will be a big help to your financial spring cleaning project.
Go through your subscriptions
Our subscriptions to streaming services increased exponentially since the beginning of 2020 as we’ve all been spending so much time at home. At this point, you might find yourself with accounts for Netflix, Disney+, Crave, Hulu, Amazon Prime … and still renting movies from Google Play. Maybe you’re still getting mailed subscriptions from long-abandoned magazine interests and subscription boxes from favourite companies, or paying for random apps on your phone.
If you still use all of these regularly and can’t imagine a day without them, by all means, keep them. However, there’s probably at least a couple paid subscriptions you keep out of habit, or out of reluctance to go through the cancellation process. Well, financial spring cleaning means it’s time to be brave in that regard. Go through your subscriptions and cancel any you don’t need anymore. Be ruthless and selective. You’ll end up saving money, and you won’t find yourself with collections of unused materials or unread magazines sitting around.
Face your debts
You might have some debts. Just to get this out of the way, remember that having debt isn’t the end of the world, nor is it always a bad thing. Good debts like mortgages and car loans are necessary, and will pay off in the long run if you stay on top of your payments. However, consider whether you have any “bad” debts like credit cards or lines of credit. If you find you have some catching up to do, start clearing these out by paying off high interest debts first. This will ensure you’ll owe less back down the road. You should also work towards paying more than the minimum amount over time to increase your credit score.
Maybe it’s a good time to consider refinancing your mortgage for a lower interest rate, or consolidating debt. You can read about refinancing to consolidate debt here, and how it might benefit you.
Automating payments is one of the easiest and most effective ways to do some financial spring cleaning. You can set up automatic withdrawals from your bank account to take care of any bills that repeat and are the same amount each time. This can include internet, cable, or phone bills. For utilities and other bills that can vary, you can set up reminders on your phone or calendar if you’re prone to forgetting to make payments on time. Missed payments can damage your credit score, so you should avoid putting yourself in that situation as much as possible.
Now you can start thinking ahead. What are your future goals and plans? Do you want to buy a new home, start saving for retirement, renovate, have children, etc? Use this time to see how these plans fall in with your finances, and what you need to do to be ready for them. Most big financial plans require organization months, or even years, in advance. This is a good time to look back over the first half of the year, and look ahead to the next half and beyond.
Financial spring cleaning is a lot of work, but just like scrubbing down your house, it makes everything look and feel better when it’s done. If you’re thinking about refinancing your mortgage to leverage your home’s equity, or buying a home in 2021, reach out today! Give us a call at Centum Home Lenders at 506-854-6847, or get in touch with us here.