Spring Clean Your Finances!!
Spring is in the air! And it's time to spring clean your finances as well. In today's podcast episode, we talk about 8 steps to organize your finances this spring.
This Episode Discusses:
Financial organization
Tracking your net worth
Reviewing your insurance policies
Reviewing your financial goals
Tracking your spending
Revamping your budget
Automating savings & bill payments
Decluttering
Podcast Transcript:
Hello and happy Friday. I hope that you have had a fantastic first week of April. I live in the Midwest and spring really does not feel like it starts coming around until April or May. It was actually snowing last week. The snow didn't stick, but it was gross. So I'm really calling in spring vibes, hoping that all of that spring weather is on its way.
Today's episode is on spring cleaning your finances. So it's going to be super action heavy. So make sure that you have your notebook with you.
Before we get started, I have a very exciting announcement to share with you. There is a brand new, totally free online course that I am launching today and it is called Your Financial Roadmap. And if this sounds like a podcast episode, you are right, because the “Your Financial Roadmap” episode that I shared is one of the most downloaded episodes of the Thrive With Money podcast, so I thought, well, let's make a free course about this.
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And honestly, I have been working on this free course of Your Financial Roadmap throughout this whole week. And every time I kept working on it and building it out, I was like, this is an amazing free course. I could charge a lot of money for this course, because it is so action packed. So do not walk, but run to the show notes of this podcast episode to sign up for that free course, or when you're talking about your financial roadmap, it goes even deeper than what the podcast episode covered. Of course, because it is a course instead of a 20 minute podcast episode. And there's also a super action packed workbook that goes along with it. And I know that you're going to love this course so much because I had an absolute blast creating it. So the link to enroll in that 100% free online course of your financial roadmap is in the show notes. I can't wait to see you inside.
And without further ado, let's start talking about how to spring clean your finances. Okay. So if you are anything like me, I get into the spring months and I am just all into organizing and decluttering. It is really like there's something in the water or in the air. When spring comes around, you just want to clean and get ready to kind of welcome in the bright, sunny feelings of summer and all of that.
Step #1: Get your financial documents in order
So the first thing that is on this list is to start by organizing your financial documents. So we talked about this a little bit in the January podcast episode, or maybe it was December when it was your end of year financial checklist. We talked about organizing your financial documents here.
But quarter one is over. It's important to make sure that you're keeping up with your financial paperwork, keeping it all in one secure place so that you can reference it when needed. And then frequently going back to it to see if there are any documents that you don't need any more, maybe there's bank statements that you can shred, check in on your insurance documents, make sure that you have adequate insurance coverage. Make sure that you have all of that information in one safe, secure location so that you can access it whenever you need to, because you never know when you're going to have to pull out some type of document and you want it to be readily available for you. So that is step number one.
Step #2: Update your net worth
Step number two, if you have not done so already this year: update your net worth.
So your net worth is the dollar amount of your assets minus all of your debts. And this number is so important because it really helps you understand where you're standing financially, identify areas that you might be overspending and help you make a plan for paying off debt and reaching your other financial goals, because you have that bird's eye view of the numbers. And so often this can be a calculation that's forgotten to be done because it can feel a little scary to calculate your net worth. Especially if you're right at the beginning of your financial journey, maybe you're not super happy with what those numbers are, but the thing is that everyone has to start somewhere. Everyone is going to have their own starting point on their financial journey, but the sooner you identify what your starting point is, the sooner you can start taking action to get to where you want to be and your net worth and consistently tracking it is such a powerful way to see the progress that you're making over time, because, and I'm sure I've talked about this on a podcast episode previously, it can feel like you're not making a ton of progress towards your goals. It can feel like you're working so hard paying down debt, you are working so hard investing or building your emergency fund and your net worth is an amazing resource to help you really see that full picture of where your funds are going. So that, you know, for a couple of months in a row, you are paying down your credit cards and you're not necessarily seeing your investments grow.
You are able to see that balancing decreases from paying down those high interest debt. So if you haven't done so already this year, update your net worth. It can be really scary to begin with, but I promise it is such an amazing number to track over time. I've gotten to the point where I love calculating my net worth. It makes me so excited to see the progress that is happening. And I didn't always feel that way, but now it's like one of my favorite times of the month is sitting counting and calculating my net worth.
Step #3: Look through insurance policies
Step number three, look through your insurance policies. So we talked about insurance a little bit in the Your Questions Answered Q&A, and now we're taking action on it. Look through your insurance policies. This can be a really easy step to kind of put off, but you want to make sure that you have all of the necessary and adequate types of insurance coverage that you need, your health insurance, life insurance, disability, auto insurance. You want to make sure that you know who your insurance provider is, the policy number, the date the policy was issued. When it expires, you want to know what your premiums and deductibles are. You want to know who is insured underneath these policies, your beneficiaries, the details of your coverage.
You want to know all of that information. And also kind of, while you're at it, if you have a vehicle, if you drive a car, go make sure that you have the correct and up-to-date auto insurance policy and registration document in your car as well. It can be really easy, especially as we get older. I feel like the passage of time just keeps speeding up and up and up. So you want to make sure that when your documents are updating, that you are keeping the adequate records and that those records are where you need them to be. And once you've reviewed your insurance policies, you will know if there were any updates that you need to make, maybe you find something like, “oh my gosh, I thought I was covered for something, but I actually don't have that coverage”. Maybe now is a sign to shop around for different coverage options or add it to your calendar if you know, it's health insurance or something, for example. We're not in a period of open enrollment right now. You can add it to your to-do list for when open enrollment for healthcare coverage, for example, begins. So you want to look at and review all of your different insurance policies.
Step 4: Review your financial goals
Your next step in your spring cleaning financial checklist is to review your financial goals because quarter one is done. We are a quarter of the way through 2022, which is just totally like mind blowing to me. I just feel like this year is going by so fast. I was thinking about 2020. Earlier today. And I know everyone says this, but 2020 feels like it was just a couple of days ago. It is wild how much has happened in the last two years, but think back on those financial goals that you set at the beginning of the year. And studies do show that people tend to give up on their financial goals by February. And if this sounds like you, spring is the perfect time to jump back into your financial goals for the year. So take a couple of minutes to sit down, review the progress that you've made towards your goals. You might have to make some adjustments towards them and that's totally fine. Life happens, things come up. And you just want to review, look at the progress that's happened. See what modifications or adjustments that you can make, update them as necessary, so that you are staying on target to your financial goals overall.
Step #5: Revamp your spending plan
And that kind of brings me to my next point, which is revamping your spending plan. So take a look at where you're currently spending your funds, see if it is helping you reach the different financial goals that you've outlined for yourself, or if there are any areas that you need to modify and make adjustments to.
And one thing that I've been really thinking about a lot when it comes to budgeting specifically in creating a spending plan is a lot of times people can put a ton of pressure on themselves to create a perfect budget. Like it has to be accurate all the way down to the penny, but that's really exhausting to have to stick to. Like, I know my budget doesn't look like that. Like, I have a budget. I have a spending plan. I love creating it and sticking to it, but am I accurate down to the penny? Absolutely not. I do not know very many people who are, and the thing that I want you to remember when it comes to budgeting and making a plan for your spending, is that it just needs to be effective enough to help you work towards your goals. To help you make progress towards your goals. Progress that feels really good for you because when your necessities are taken care of, when you are funding your different financial goals, after that, it does not need to be accurate down to the penny. If you feel like your goals and your necessities are in a really good place or are making progress to be in the place that you define as good, that's a really good spending plan. And I just think that people put so much pressure on themselves to make this perfect, perfect budget that is accurate down to the exact single penny. Exact dollar. And I just don't think that that's realistic. And I think that the personal finance community is kind of starting to move away from that idea as a whole, but that's something that I wanted to say. And this checklist right here is to give yourself some grace with the spending plan that you're making. And of course this isn't me saying to totally overspend on your budget and not have any dollars left. That's not what I'm saying by any means. Always live within your means and spend in a way that is responsible and feels good for you. But we don't need to sweat the small stuff. We don't need to worry about the small little wins. Instead, let's continue focusing on the big action items like increasing your income, growing well, all of those different things, don't sweat the details of having a budget that is accurate down to the exact single drop. Now I do want to say as well, like I have seen budgets where, you know, maybe a $4 overspending in a specific category can literally make or break the budget and it that $4 can lead to overdraft charges, which can then, really spiral to an expense that is way more expensive than that initial $4 purchase would have been. So you really want to take a look at your specific financial situation when I say this. But the moral of the story is your budget does not have to be sparkling clean and perfect. It just needs to be effective enough to help you do the things that you want to do with your money.
Step #6: Automate, automate, automat.
The next step on the spring cleaning list is to take a look and see if there are any bills, payments, transfers to savings, whatever it might be that you can automate because truly automation is one of the best tools to stay on track with your financial goals, because it's all just happening in the background.
You don't have to worry about keeping up and remembering to make that transfer to savings or to pay that bill. It's all happening while you get to focus on other things. And the phrase “out of sight out of mind” sums it up so well, when you automatically send your money to bills and your savings accounts before you are tempted to spend them, you are so much more likely to stick to your plan. And that goes back into the idea of the point that we were just talking about. This can give you a lot of space and flexibility with the spending plan that you're making, because it also cuts down on that margin of error that could happen. It's taking away a ton of different mental math that you would need to rely on when there isn't that automation in place. So take a look and see if there are any bills that are currently not automated or transfers to savings that aren't automated, that you could automate, and don't be afraid to start small here and then slowly increase it over time as you get more comfortable with this automation process and knowing that these dollars are going to pull out of your account and go to a different place in the future.
Step #7: Declutter and sell your old stuff.
Okay. I am so excited about this next point in spring cleaning your finances. And it is to declutter and sell your old stuff. And if you follow me on Instagram, you know that I love to declutter. And 2022, I would say 2021 to 2022 has just been this huge year of like purging negative energy in my life and going through my things and just getting rid of stuff that when I held it, it didn't like spark spark, the feeling of joy, shout out to Marie Kondo that I wanted it to have. Like I would hold onto this thing and I would say, does this make me feel the joy, energy, happiness I want to have in my life anymore. And there are so many things that I would just see and hold on to it and be like, no, this, this thing is not serving me in the way that it used to. And it's taking me like a couple of rounds of decluttering and going through things to get to a point that I'm starting to feel a lot happier and more content with. But when people say that the minimalism movement is contagious. Like I wouldn't call myself a minimalist, but I do love decluttering. I totally see where people are coming from.
So when you are decluttering, don't forget to check out places like Facebook marketplace or Thread Up. I used to love ThreadUp for sending in like my clothes, because they will also responsibly recycle whatever clothes that you send into them. But one thing to keep in mind is that they currently are really behind on processing times due to COVID and like supply chain stuff. So that's something to think about. But then also there's a local consignment shop near me that I ended up taking my clothes to because of threat ups, slow processing times. And I was able to get like $65 back on clothes, which I know doesn't sound like a lot of money in like the grand scheme of things. But when we're talking about selling your old clothing, $65 is a pretty solid chunk of change, especially when I think about things like Plato's Closet or something, for example. And I'm not sure if Plato's closet is a national chain or not. So if you don't know what Plato's closet is, if there's not one near you, it's a consignment shop. It's a used clothing place. And I would take clothes there all the time when I was in college. And I would take in this giant bag of things and maybe get $5 back. So when that's been your experience taking things into a consignment store, $65 is a big deal.
So check out your local consignment shops, check out ThreadUp, see if it's a good fit for you. And then Facebook marketplace. I love listing items like pieces of furniture. And seeing if anyone is out there that can buy it. And especially when I was moving into this new house, I was able to get a couple of hundred dollars just getting rid of things that I didn't want to hold onto anymore. So declutter, sell your old things. It can be a nice little cash injection into your monthly cash flow, which is always a positive. And you also get to kind of release some negative energy things that you aren't really wanting to hold on to anymore when you are decluttering as well.
Step #8: Make your goals a reality
And the final thing that I want to add to this list that really wasn't written down in my notes, but it's kinda like coming through as I'm talking through all of this, we are a quarter of the year through 2022. So if there is something that has been in the back of your mind that you wanted to do, you want to start working towards, start making a plan with your finances to make that thing your reality. Of course, you want to see how it fits in with the other financial goals that you're working towards. You want to think about your values, how you want to prioritize everything. But maybe there is a business that you want to start, or there's a program that you would like to join, or there's a vacation that you want to take. Sit down and start thinking about the steps that you can do to make that thing happen. Because the older I get, the more it's really kind of hitting me how quickly time goes by. And like I said earlier, it feels like 2020 was just a blink of an eye ago. It feels like it was just yesterday. And I'm not even exaggerating when I say that.
And with all that being said, if there is something that you're feeling called to do, you're feeling compelled to do, it's this thought that's in the back of your mind that you can't let go of. See how you can start taking steps with your finances because your money is a tool to live a life that's aligned with your values and live the life of your dreams.
I start seeing and brainstorming what steps you can take with your money to help you get started or do whatever that thing might be. So those are my nine steps. It was eight or nine steps. I don't remember because I added a couple on the fly. I like doing non-scripted podcast episodes. Now, everybody, I hope that this is something that's enjoyable. I know I can kind of ramble. So. We'll see, we'll see how I feel while I'm editing this. But anyways, that was eight or nine steps that you can take to spring clean your finances. I hope you're having an amazing April and I'm so excited to talk to you next week, but before you go, there's one more announcement that I need to make.
And it is about the Wealth Building Bootcamp, which number one, there are a couple of spots available for the month of April, which if you have been wanting to join a community of people to talk about your financial goals, the things that you are learning about your financial aspirations and just be a part of an incredible community of people that are supporting each other, and also have an amazing curriculum to just totally help you take control of your finances and take your financial literacy to an entirely other level, this program could be a really great fit for you.
But also I'm finishing up another curriculum overhaul for the wealth building bootcamp. And I'm just so excited about these updates. Like seriously, they are so informative and I even had a client say to me, we were on a group coaching call. I was like, do you have any questions for me? And she was like, no, these modules are so packed with information that like, it literally does not leave me with additional questions to ask. And I was like, “yes, I am doing my job really well”. Building out these lessons in these modules with so little room for questions because they're so freaking informative. But anyways, with these additions to the curriculum, it is just so value packed that the price in May the pricing structure is going to change. So if you have been on the fence about the Wealth Building Bootcamp, April is 100% the time to apply. I would absolutely love for you to join this community and join the program. It is such an amazing and inspiring group of women. I love my clients so much. And if you have any questions, I'd be more than happy to answer them. And I hope to see your application.
All right. That is all I have for today. I will see you next week. We have an amazing guest interview session for next week, and I'm just so excited to share with you. So I'll talk to you later. Bye!
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Disclaimer: The content and information provided on this podcast is for educational purposes only and does not constitute professional mental health, financial, legal, or tax advice. For recommendations on your specific financial situation, you must additionally seek the services of an appropriate licensed mental health, theraputic, legal, accounting, tax, or investment professional.
Music written by Chris Glassman