While the arrival of spring brings longer days and warmer weather, it also means cleaning things up that we have put on the back burner. As you plan a thorough cleaning of your home and yard, it is also a great time to re-evaluate your finances. This spring, consider these tips to tidy up your finances
Evaluate Your Spending: To assess your spending habits, track what you spend for a month. Then review monthly requirements versus expenditures that are not a necessity. This could reveal areas where you can eliminate overspending on discretionary items or areas that are may provide an opportunity to save more money. Digital banking tools can help you quickly and easily track spending.
Start a Budget: First, write down your goals. Think about what you want to accomplish in three months, six months and one year. Compare your net pay to your fixed expenses such as mortgage payment or rent, car payments and student loans. Also include taxes and insurance paid throughout the year and remember to include flexible items like, food, clothing, and entertainment, which can vary. Prepare your budget to meet your “needs” first and your “wants” second. You can keep a close eye on your spending with online banking or a mobile banking app.
Get into the Habit of Saving: If you follow your budget and have residual income, then pay yourself by depositing that money into an interest-bearing savings account. You can also consider making a deposit into your saving account part of your monthly budget. By creating an automatic transfer to your savings account, you can automate this savings which may help you save faster. As your income grows, continue to make adjustments that will help allow you to meet your financial goals.
Eliminate Debt: Focus on paying off your highest interest rate debt first, often credit cards. Apply any extra cash in your budget to payments on that debt so you can pay more than the minimum payment to get the balances reduced and ultimately paid off. This is another opportunity where setting up automatic payments could be useful. Consider setting up a recurring payment that aligns with when you get paid. Making two payments a month can help ensure you are tackling debt effectively. Once one debt is paid off, move on to the next until you are debt free!
Monthly Review: Review your budget on a regular basis and understand it will always be a work in progress. As you continue to evaluate your goals, it will be necessary to make adjustments.
Your budget will always be a work in progress which is why it is important to do an annual spring cleaning of your finances. With your financial house in order, it can help give you some peace of mind and as you prepare for a financial future that lines up with your long-term goals. Univest is here to help you achieve those financial goals, contact us at www.univest.net or 877-723-5571 to discuss how we can help.
Univest Bank and Trust Co. is Member FDIC.