It’s the Season to Spring Clean Your Finances
Spring is the time when flowers start blooming, grass turns greener and, for some reason, “spring cleaning” comes to mind. When I think “spring cleaning,” I don’t normally think of cleaning my home (although I probably should), I think of organizing my paperwork. It might be because I have finished my income taxes and I can purge all that paperwork.
So, what do I do when I spring clean my finances?
I start with my paper work. I usually keep at least one year of old bills and at least 7 years of taxes (okay I keep my tax information forever). It feels great to be able to destroy those old paid bills.
I then look at what debts I have, and the interest rates on those debts. If I have a balance on a high interest credit card, I am looking at getting rid of the balance of that card by either paying it off (option #1) or transferring that balance to a much lower interest loan or line of credit (option #2). Why do I have that high interest credit card anyway? Maybe, it’s in my best interest to get rid of that card.
I look at what I am doing for my retirement. Should I make an appointment with my financial planner? Am I putting enough away for my retirement? Should I be contributing more on a monthly basis to my RRSPs?
I also use this time to get a copy of my credit rating. If I am going to be making any major purchases in the next year, I want my credit rating to reflect properly so I can get the best interest rate available to me.
Next up… a review of my spending habits and future needs and wants. Am I planning a vacation? How much do I need to change my budget to account for this or any other items I want to spend my money on?
And finally, if I am really enthusiastic, I start cleaning my apartment.