It’s that time of year again when the first signs of spring create a feeling of excitement for what is right around the corner. From this excitement grows a motivation to remove the clutter that might have built up around us during the fall and winter.
Why not use this motivation to clean up more than just your house and yard? Here are a couple of tips to help get you started with your financial spring cleaning.
• Cash flow analysis. When was the last time you did a comprehensive examination of cash flow? Probably around the same time you remembered to change out the air filters for your AC unit.
This can be an intimidating challenge, so start off small. Sit down and create a personal profit and loss sheet. Take a close look at the past three months by going through all bank and credit card statements to determine a positive or negative cash flow for those months.
Identify where your inflows are coming from, but more importantly, the outflows that represent where your money is going. Try to identify any issues or bad spending habits you need to address. Don’t forget to highlight any positive behaviors you can nurture and grow.
A clear understanding of your cash flow and fiscal behaviors will help you not only with present-day monetary decisions but with setting achievable financial goals – both short and long term.
• Clean out debt. One of the biggest steps you can take toward financial success is becoming debt free. It can also be one of the hardest. This doesn’t mean you should let your debt become like that attic you’ve meant to clean the past five years, but just never got around to.
Try to identify smaller debts you can attack and possibly eliminate quickly. There are multiple strategies you can utilize to eliminate debt. Find one that works for you and stick with it.
Remember to check your credit report during this process. Be sure to look at all three credit bureaus (Experian, Equifax and TransUnion) to make sure they are up-to-date and accurate.
• Accept help. Not all your financial chores need to be done alone. Today’s financial world is filled with complicated challenges. Find a financial planner you feel you can trust and let him or her help you overcome them.
It’s never a bad idea to let someone support the bottom of your ladder when you’re cleaning the outside of those second story windows.
Luke Gawronski, a financial planner with Barnum Financial Group, is a registered representative of and offers securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC. firstname.lastname@example.org