Spring Cleaning Your Finances

FIND THE MESS.

Looking at a messy house and coming to the realization it’s actually messy and needs cleaning is not always easy to realize. We try to rationalize saying that we will organize that horribly cluttered storage closet next week when we have more time. Or tell ourselves that we’ll go through our wardrobes and get rid of clothes we no longer wear, but always seem to find an excuse or something more pressing to do instead. Well ‘spring cleaning’ our finances is very similar! We put off and find excuses rather than sit down and take a hard look at our finances. The first step to starting your financial cleaning is to get real with yourself about the state of your monetary well=being. By this, I mean that you have to be very hard on yourself and almost over critical to set yourself up for the best audit of your finances. Write everything down, from your rent or mortgage, to the coffee you bought this morning, to the $4 pair of socks you ordered online last month. Go back and make a record of all your purchases and fixed costs for the past few months and total up the costs. Count everything, and I mean EVERYTHING! No cheating!

BE REAL WITH YOURSELF ABOUT THE MESS.

Once you have tallied and totaled your expenses and purchases for the past few months or year, whichever you have selected, you must now get very real with yourself. When I say ‘real with yourself,’ I mean making sure you aren’t easy on yourself and trying to justify that $350 dollar purse purchase last month when you could barely afford to pay your rent. This is the time to look at what you’ve been buying and decide what was necessary and what was not. A helpful tip to do this is dividing up your purchases into two columns: Need and Want. These are pretty self-=explanatory. Under the ‘Need’ column, you would put the basic necessities you need to survive, like rent or mortgage, groceries, work related expenses and so forth. And in the ‘Want’ column, you would put your extracurricular spending, like going to the movies, or taking a vacation, or buying that $350 dollar purse. When you break down your expenses this way, you need to, once again, be real with yourself. Do not put a $150 steak dinner under the ‘Need’ column just because it is food. You don’t need a fancy steak dinner to survive therefore that would go in the ‘Want’ column. This is a very tough yet fruitful self-=examination process. The money you spend shows where your desires lie and can be very telling of good habits you have as well as telling of bad habits you might have formed.

ROLL UP YOUR SLEEVES AND CLEAN THE MESS.

Now that we have our expenses broken down, have done some soul searching and given ourselves some tough love, it’s time to clean up the mess we have found. If you have found, for example, that you are living within your means, which means that you do not spend more money than you are making, then that is fantastic! You are a step ahead of many people. But let’s get tough on ourselves. You may be spending just as much as you make and not a penny over, but are you saving any money? Do you have any locked away for emergency purposes or an unforeseen crisis? My challenge to you would be to look at your ‘Want’ column and clean that up. Look and see what you can cut out that will only cause a small sacrifice on your part, and put that money away.

Maybe you’re on the opposite side of this and you’re spending much more than you are making and are sinking yourself into a deeper and deeper hole. Well my friends, this is where being tough on yourself and cleaning your mess can save you. Your main focus should be on the ‘Want’ column, because I could be willing to bet that it is way too much if you are spending more than you are making. This is where we as individuals have to roll our sleeves up and clean up our own mess. Cut out the unnecessary purchases and sporadic spending that never lets you get ahead and save. I challenge you to start to cut one thing out, just one, and see if you actually miss it that much. Small gradual steps lead to big changes over time.

So don’t feel like you have to deep clean your finances overnight. That would be almost impossible! Take your time to clean up and organize your spending in the right way in order to sustain good habits over time. That way, come next spring when it’s time to start this cleaning process over again, you will have made leaps and bounds, and the mess will be nothing compared to what it was.

Please share this information with your family, friends and loved ones. Everyone should be aware of the direction their finances are headed, and should look every now and then to see if they need a deep cleaning! Thank you for tuning in to my CASH the Mascot blog, I hope you found some of this information helpful and entertaining! Stay safe everyone!