According to Kathy McEwan, an Ottawa-based Certified Professional Organizer, spring is the perfect time to go through your things and declutter. “We collect a lot of stuff over the winter, especially over the holidays, but we don’t necessarily get rid of any. Most people prefer to declutter and clean in the spring so that they can enjoy the summer.”
In the same way that you take the time to spring clean your cupboards and closets, you should also look at spring cleaning your finances!
A cluttered home leads to a cluttered mind, and the same is true for finances. When you don’t know where your money is going, or your finances feel out of your control, it’s very easy to feel stressed and overwhelmed.
If instead, you take the time to get organized and simplify your finances, you’ll feel more relaxed and be able to be more productive.
Here are 3 steps to take to start your financial spring cleaning process.
Audit your subscriptions
Take some time to go through your credit and debit card statements to look at recurring subscriptions. Often we are paying for things we don’t need or don’t even remember signing up for!
Even a $4.99 a month subscription adds up in the long-run. With tax that subscription is costing you $67.68 per year! If there are a few subscriptions like this the total can quickly grow. Small leaks can sink your financial ship.
“In 2019, we each spent $640 on digital subscriptions like streaming video and music services, cloud storage, dating apps and online productivity tools, according to an analysis for The New York Times by Mint, the online budgeting tool owned by Intuit, using data from millions of its users.”
Get honest with yourself and look at unsubscribing from any subscriptions that:
- Are very similar or duplicates (for example, if you already pay for Netflix, do you also need Hulu and Crave?)
- You don’t use (do you need to hang onto that gym or yoga membership)
- You don’t really need (editing software, marketing tools, Spotify or Apple Music, magazines, sports subscriptions, TV channel access, etc.)
- You forgot you signed up for (look for small charges on your credit card! Apps, additional iCloud or Google storage, Amazon Prime, etc.)
With all of these, it’s important to reference your values. You don’t need to cut out subscriptions that truly make you happy, but you do need to gain clarity on what’s important to you and what you can do without.
Look at your regular bills
Next, take a look at some of the larger bills you pay each month or year. What rate are you paying for your cell phone plan? Cable plan? Insurance?
These are often payments we set up and then forget to revisit, but oftentimes companies will come out with cheaper, more streamlined options that might suit you better!
Consider what you need included in your plan, and then do your research. Is there a better option out there from the company you’re already with? Can you negotiate? Is it potentially worth changing companies?
Similar to the conversation you might have with yourself regarding small subscription fees, consider also if you really need all of these services. If you already pay for an online subscription like Netflix, do you need cable? Are you paying for a landline you’re no longer using?
Granted, this might take a little work upfront (which is why we often avoid it), but you’ll feel a lot more organized and confident in your finances if you know you have great rates on plans you really use!
Organize your taxes
It’s tax season, which means you’ve likely done a lot of work organizing your finances from the previous year.
While you’re at it, start to plan for next year by creating a tax filing system and organizing your documents.
As Liz M Raymond, an Ontario Professional Business Organizer writes, there is no greater lost money opportunity than being disorganized.
“Wasting time searching for documents we have misplaced, digging through piles of papers looking for customer orders, flipping through receipts trying to find that one for the item we need to return and worst of all, searching our emails looking for that one email that has the attachment we so desperately need!”
Raymond suggests making a list of all the different groupings of expenses, jobs, and customers that you have. These will look different depending on if you’re a business owner if you’re in school, the size of your family, and in general, the type of expenses you claim each year. These are the physical and digital folders you should have to organize your receipts and invoices as the year goes on!
When your physical and digital file systems look the same there will be no question as to where documents should go.
Yes, it takes time now to get organized, but “when you think of the investment in time to get organized, you will save so much more time later.”
Plus, there are fees you pay if you do not pay your taxes on time (especially for business owners)! By getting organized now you’ll avoid paying unnecessary fees later.
Think of spring cleaning your finances as a favour to your future self. By looking at your finances with a fresh perspective you’re giving yourself the chance to feel empowered and in control of your spending habits.
You’ll know where your money is going each month, where you can save money, and when you get organized, you free up your time to do more of the things you love.