According to the National Weather Service, it’s “Severe Weather Awareness Week” here in Michigan. Luckily, the forecast calls for sunny skies and warming temperatures, at least for the next few days – a great opportunity to get a jump on spring cleaning, tend to my beehives, and enjoy the fresh spring air.
While it’s good to be aware of tornadoes and the potentially devastating effect they can have on those who aren’t prepared, I’ll bet there’s a different – and more common – kind of tornado brewing somewhere in your filing cabinet or desk drawer, and it’s called YOUR FINANCES. Left unorganized or unattended to, it’s easy for “clouds” of debt, billing increases, and forgotten higher interest rates to swirl into a storm that zap your credit rating, your expenses and more. So, if you’re in the mood to do a little spring cleaning yourself, here’s a short checklist to keep your financial forecast sunny, with blue skies and calm winds!
- Get organized. It’s easy to think that disasters (like tornadoes) only happen to other people, but we all know better. If a disaster – like an accident or illness – left you unconscious in the hospital for an extended period of time, would your family or friends have access to your important information, like a medical directive, will, account numbers or even basic household information? If not, see my blog on financial scrapbooking to get started. If you need additional help, you can sign up for my free seminar on financial scrapbooking at the Plymouth District Library on Friday, April 29, at 10 am.
- Take stock of your debt. How does your household debt compare to your household income? Are you successfully paying down your credit cards, or using them to stay afloat? Now is a great time to understand how much interest you’re paying and prioritize your payments to reduce high-interest loans first. If you are entitled to a tax refund this year, consider using it to reduce your debt. Otherwise, look for opportunities to lower your interest rates, restructure debt or limit spending, if possible.
- Shop for better deals on things like cable or satellite TV, cell phones and other subscriptions. Start by calling your current provider and asking how they could help you lower your bill. For example, cable companies often have unadvertised deals for existing customers, but don’t offer them unless you ask for it. Alternatively, you could trim services you no longer use, such as a telephone land line or a premium channel.
- Pay yourself automatically. If you don’t already contribute to your 401(K) or IRA, now is the time to automate your contributions so you can save without even thinking about it. Once you have that base covered, make sure you’re saving for your emergency fund. Apps like Acorns or Digit.co can make it easy.
- Check your credit report. Consider this to be like financial hygiene and plan to do it every spring. Consumers are entitled to a free credit report from each of the three major credit bureaus – Experian, Equifax and TransUnion. A good source for this is annualcreditreport.com. An annual check helps you understand whether your report is accurate, and it helps you detect any suspicious activity.
If you’re already working with AMDG Financial, we’d be glad to coach you through this process. But if you don’t work with a financial adviser, be sure to add “finding an adviser” to your spring-cleaning checklist.