Spring is in the Air

5 04 2012

Jean Chatzky is one of my favorite people to turn to for practical financial advice.  Her philosophy about money is simple and matter-of-fact.  She encourages you to spend less than you earn (which can be difficult), to save, then invest and to protect what you have worked hard for.

I was excited to see an article she contributed to recently called Financial Spring Cleaning: 4 Steps to a Fresh Money Start.

You’ve heard of spring cleaning and using the change in season as a reminder to tidy up after the long winter.  Ms. Chatzky bring a new twist to this by suggesting we do a spring cleaning of our finances and I love the idea!

These are the steps she suggests to get a freshly organized this Spring:

1. Declutter: Go through all of the mail that has piled up in stacks throughout your house and bring them all together in one space, like your dining room table. From this large single file, make two new ones: 1.) Shred 2.) File.

2. Purge: Look through the items you spend money on monthly and see if there are any “rotten tomatoes” as Ms. Chatzky refers to them.  For example, maybe change your cell phone plan from unlimited data to 300MB of data.  Or perhaps get rid of your cable subscription and catch your favorite shows on the network’s website for free?

3. Polish: Request a copy of your credit score from one of the three major credit bureaus (Equifax, Experian, and TransUnion).  This will help you monitor what areas of your financial credit need a good shine.

4. Sweep: Sweep any extra cash you have into savings and don’t just stop in the spring, keep this as a year-long habit. Tax season is winding down and many of you may actually be up for a refund.  If that’s the case, Ms. Chatzky suggests asking your employer to adjust your withholding, so you get that cash each month, rather than in a refund next spring.

I feel like the biggest challenge for me is saving the extra cash, but the practical insight provided by Ms. Chatzky is encouraging for me and I will actually be looking into adjusting my withholding.  What area do you need to work on most?




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