DIY Budget Spring Cleaning
Easy Budgeting Clean Up in 10 Minutes Or Less
1. Set one or two money goals
Having goals is one of the best indicators of success. Here are some examples to get you thinking (but of course, everyone’s situation is different! Do what works for you.)
In the next 12 months, I will have paid off the balance on ABC credit card, by making an extra payment of $150 every month on the 15th.
In the next 6 months, I will meet with a professional and begin the process of estate planning.
By January of 2023, I will have $1,500 saved for an emergency in a separate savings account, by setting up automatic deposits on a monthly basis.
I will find ways to cut monthly expenses by $100 to save up for my 2023 vacation.
2. Let's get digital
If you don't have online banking set up for every single financial institution that you have, you should. If you only have one financial institution, especially if you're with Copper State CU – that’s awesome and this job will be really easy. But if you have several financial institutions, it’s a good idea to get connected –or reconnected– digitally with each one.
Monitoring your accounts regularly helps to prevent fraud and identity theft, and the easiest way to do this is to stay engaged using online banking.
Think about anywhere that you keep your money and anywhere that you owe money. Everything from a health savings account to checking account and wherever your direct deposit or paycheck is deposited, credit cards, mortgage, auto loan, etc.
Maybe you set it up before but don’t remember your password. Click that ‘Forgot Password’ button. Get them all out of the way at once! It won’t take as long as you think.
Download each financial institution’s app, while you’re at it! App Store or Google Play and type in the credit union or bank’s name.
3. Security Checkpoint
So you’ve just done the work of getting logged in or re-enrolled in all of your online banking portals. Make sure you’re not reusing passwords! If that password is exposed on one site, all of the places you use it are now vulnerable. You hear about all of the data breaches and all that stuff, using a different password for every site helps to solve that problem. I know it's impossible to memorize that many passwords, which is why I recommend a password manager. You can save them securely. There are several reputable password managers that are free, as well as ones you can pay for extra features. I use LastPass, but do your own research and find one that’s a good fit for your needs.
Other password tips: Don't use common words and phrases. Don't use your pet's name or your kid’s name. Use symbols, numbers, and spaces. Using a password manager means you only have to remember ONE secure password – the one that unlocks your password manager. The rest are stored inside. Many of them even offer extensions on your browser so that you can autofill as you’re visiting websites.
Also – pay attention to any unused accounts that you have. If you don’t use it or look at it at least once a month, you may want to consider consolidating with a more-often-used account.
One note on closing accounts – you may not want to close lines of credit (credit cards or other) if you've had them for several years. Length of credit history contributes to your score, so if you shorten that length by closing a long-time credit source, you could see a dip in your score. Same if you’d just paid off a large amount on a specific loan or card.
4. Store Statements
Don't we always intend to download our bank statements every month if we have e-statements, and put them in a little folder, or get them in the mail and file them. Sit down and do it now! If you ever have needed these, you are going to be so happy that you took 10 minutes and you sat down and picked your statements and you organize them away once a year. They are needed for a variety of things. If you buy a house, you'll need some statements. For tax purposes, sometimes you will. So, having those available and actually just getting them put away and organized, that's a 10 minute task that you probably will be really glad that you did if you ever need it.
Our team was curious about how long it would take to actually get to your eStatement via online banking. We found:
• Enrolling in eStatements: 1 minute, 4 seconds on a computer
• Viewing/Downloading a Recent Statement: 56 seconds on a computer.
5. Get your free credit report.
Get it in hand in less than 10 minutes. (But no guarantee that you’ll be able to read all three of them in 10 minutes! They can be dozens of pages long depending on your credit history.) You’ll get three different versions from all three credit bureaus. AnnualCreditReport.com has the details for you to take care of this once per year.
But the reality is, we should be doing a credit check in more than once per year. What’s so nice is that Copper State CU online banking offers Free Credit Score to all members. You fill out a few fields in online banking and then you get a free little module that sits on the side of your page and gives you DAILY score updates, reporting information, and tracking. It will actually notify you if you have an opportunity where you could save some money on a certain rate that you're paying! So cool and completely free for our members.
6. Clean out your real life wallet.
Maybe I’m the only one who has this problem…?
Wallets tend to collect junk but think about some valuable items that you might have in there as well! You may have some gift cards hidden in there, you may have some coins that you could put into a coin machine and get a free drink or something out of it!
You could find receipts could be in there, which might help you if you need returns, or if you're trying to do budgeting or those apps that will pay you for certain items you buy, you have to have a picture of the receipt. Ibotta is one of them.
Probably we should do this more than once a year, or just keep it clean in the first place (yeah, right).
Easy Budgeting Clean Up In 30 Minutes Or Less
1. Check in on Subscriptions
Companies have made it too easy to subscribe in one click to things on your phone, on Amazon, or on your smart TV. There are so many ways to start with a free trial! And then that trial conveniently continues. And sometimes you don't even remember that they're there. There are actually apps that will look at your subscriptions for you and try to cancel them for you. The one I'm thinking of right now is called Trim, but that does have a fee, and it can't cancel everything. It can't cancel your gym membership for you, for example.
On an iPhone - go into the Settings app, click on your Apple ID, and view current subscriptions.
On an Android - open the Settings app > manage your google account > payments and subscriptions > manage subscriptions.
On Amazon – click your profile in the top right > go to Your Account > Memberships and Subscriptions
Other subscription services will have their own rules and ways to manage.
It’s not like you have to cancel all of them, just consider canceling the ones you don’t use! This will save you money if you take the 30 minutes to do it.
2. Adjust your tax withholding.
Tax withholding preferences are set up on your W-4 form with your employer. This is the form you likely filled out when you were hired where you put in 0s and 1s for exemptions. What this form does is it lets your employer know how much money to hold from your paycheck for taxes. This is a very simple definition, please understand that I'm not a tax professional.
Did you get a tax refund this year?
Did you owe money in taxes this year?
If you said yes to either of the above questions, think about if that amount of money would have been helpful to spread out over 12 months. For example, somebody gets $2400 for their tax refund. That's $200 a month extra that they could have kept and utilized in their budget, and had in that cash flow if they adjust that withholding rate. Of course, make sure you get advice from a tax expert if you have specific questions. It’s worth considering thought - because if you are getting $2400 in a lump sum in March or April or May, it is so tempting to just buy something fun with it or go on a vacation. And if you had it spread out over the year, you might be thinking, well, I could pay off this debt with an extra $100 a month, or I could save up for the holidays $200 a month, whatever the case may be. It's really helpful to have that in your cash flow monthly.
The opposite is also true. If you owed $1800 in taxes on your last tax return, that's $150 a month. That's a lot easier to fork out than almost $2,000 when tax season comes around. This is especially worth considering for small businesses and those who are self-employed to be submitting your quarterly estimated taxes.
You can re-do your W4 form with your employer (talk to HR) at any time, as often as you’d like!
3. Automate savings.
Direct electronic money transfer between accounts is available from almost all financial institutions. You can set it up to occur once, or there are recurring options like bi-weekly or monthly. It’s easy, fast, and effective for reaching your savings goals.
Most institutions also have an option to set up connections between accounts at different banks or credit unions (usually called external accounts.) When I learned this, it was really helpful to me. If you have a savings account at one institution and a checking account at another institution, you can move money electronically in between those two. Usually this involves inputting the routing and account numbers for one institution’s account into the online banking portal for the other institution.
By utilizing these transfer tools, you can easily automate your savings. Do it on payday, before the money has a chance to creep out to other things. You deserve to pay yourself first.
Another helpful step to take regarding savings is setting up a cushion amount in your checking. If you’re working on setting up a monthly budget, we have a webinar on easy budgeting, a downloadable budget plan, and a customizable free budgeting template to help you out.
But monthly budgeting is tricky because sometimes the water bill and the electric bill and the cable bill and the cell phone bill are all due on the same day, and it's two days before your next source of income hits your account. When that happens, it’s hard to make the budget work. That’s why setting up a cushion amount in your checking account, an extra couple hundred dollars (we recommend $500) and leaving it in there, pretending it's not there, , that could help you have a cushion in there just in case that overlap happens where all your bills are due and you don't have that paycheck coming in yet. It will keep your account from going negative.
Designate an account for an emergency savings and put it in a separate place where you don't see it as often. Copper State Credit Union does a really nice job with this because they allow you to hide certain accounts on your online banking. For emergency savings you’ll often hear that you need six months’ worth of expenses set aside. That is a lot of money! It's overwhelming if you have $0 in your savings account to start with. Instead, start with a goal that's reasonable. What do you think you can put aside per month for an emergency? Start with $10 a month, or $20, or $50, or $200 – whatever you can afford. Slowly, over time, this will grow, and so will your feeling of financial security. Once you reach your first goal, you can bump it up to the next level – for example, setting aside one month’s worth of expenses.
4. Plan for the Irregular
This is the trickiest part of budgeting! You can estimate monthly expenses like childcare because you see the amount leaving your account every week or every month. You’re familiar with it. But in reality, some expenses happen less often than this. Start by thinking of one or two large expenses that pop up once or twice a year, or are for differing amounts. For example, paying your registration fee for your car, holiday expenses, tires for your vehicle, vacation expenses, etc. Take something like that, and think about how much it's going to cost, or estimate how much it's going to cost. And then divide that by the number of months that you have until that thing is going to happen. See if you can set aside some funds for that ahead of time so that you don't have to go into debt when it happens.
If you feel ready to tackle this - maybe you have somewhat of a workable budget on a monthly basis, but then when those other random things come up, you're always scrambling. Oh, yeah, there's that yearly fee for the gym membership, and it's $150 a year, and I never remember it. Maybe that's something that you could work into the monthly budget and kind of put aside $10 a month instead of waiting for that big one to come at the end. Again, if you want more help with a monthly budget - Check out our free eBook: Ultimate Budget Plan to Save You Time and Free Your Money.
5. Shred Up
Shredding all of your sensitive documents that you no longer need to keep. This article from Her Money tells you what to keep and what you can shred when it comes to your taxes and other needs. Their tips include: keep receipts until you get the monthly statement, keep statements until you get the year end summary, and keep insurance policies until you get the new one. Keep anything tax related for 3 years and home/car/investment paperwork for as long as you own it.
(Not So) Easy Budgeting Clean Up Tips - High Impact
1. Align Due Dates
I have a friend who did this recently and she told me it took a few hours, and it was hard. But it was so worth it. The problem we talked about earlier with having your due dates at the wrong time and you don't have your paycheck yet, this is where you would actually call credit card companies and try to get the due dates where you want them to line up with your paycheck. Making sure that you have enough money from your income to pay the bills when they come due and changing around the due dates as you need to.
Depending on how many bills you have, this could take quite a while. And you may not be able to change every single due date, but you can probably change quite a few. This is one of those things that will make your life so much easier once it’s done.
2. Debt Check Up
If you have multiple debts or feel like you have a lot of debt and you want to reduce or eliminate it, please check out our article on debt relief or our webinar, How To Pay Off Debt – Top 2 Strategies.
3. Start saving for retirement
Find a financial advisor. They can help get you on the right path. Copper State Wealth Management has a few awesome advisors, and that initial meeting is always free!
4. Estate planning
Setting up a will and/or trust and getting legal advice is something that no one wants to do, but it's a good idea to have a plan in place before you need one. This will take a few hours, cost you some money, and you'll want a qualified expert to assist you, but it's worth the peace of mind once it's done.
If you implement even one of these budget clean up strategies, congratulations! And we'd love to hear about it. Email us at email@example.com! Thanks for joining us and please take the survey at the link below - you'll receive a free 10 Day Budget Tidy Up Challenge. See you next time!
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This article is intended to be a general resource only and is not intended to be nor does it constitute legal advice. Any recommendations are based on opinion only. Rates, terms and conditions are subject to change and may vary based on creditworthiness, qualifications, and collateral conditions. All loans subject to approval.