When you think of a “cleanse”, what comes to mind? Maybe it’s health reboots or decluttering spaces. But have you considered that cleanses can also be financial? As we reach the midpoint of the year, now is a great time for a mid-year financial cleanse. It can bring control and clarity to your money matters, helping you achieve goals like debt management or building better habits. Here’s a checklist to simplify and streamline your finances:
1. Think Big Picture
Before tackling a messy room, it helps to know what you’re getting into first. The same goes for budgeting. Start the checklist by assessing your overall financial situation. Review your bank statements, credit card statements, and other financial documents to understand your income, expenses, and debt. Identify areas where you can reduce spending, such as auto insurance, cable and internet, or rent, through comparison shopping or rate negotiation.
2. Build a Budget
Whether you prefer spreadsheets, free money management apps, or interactive budgeting worksheets, the how is less important than the why. And the why is simple: a budget is the most straightforward way to stay organized and conscious of your income and expenses. Review or create a budget, assigning categories for income and expenses, and aim to allocate a percentage toward savings. This will help minimize future stress when unexpected expenses arise.
3. Track Your Spending
Maintaining a spending log can help you identify patterns and areas where you may be spending beyond your desired comfort zone. It also helps you stay accountable to your budget. Take advantage of personal money management apps or online tools to track your expenses automatically, or keep a manual record if that helps you feel more conscious and vigilant about your spending habits.