It’s that time of year again, to clean out your closets, polish your furniture and clear out your clutter! As you work through your home, banishing dust bunnies and organizing your spaces, don’t forget to take a good look at your savings, too. Spring is the perfect time of year to review your saving habits and spruce up your saving goals. Here are five easy ways to spring clean your savings.
Assess your saving habits
First, take stock of how much you’re putting into your savings each month. To do this, take a look at your monthly budget and review your expenses and income. Experts recommend to ideally set aside a minimum of 20% of your monthly income toward savings, though this number can vary based on individual circumstances. Are you regularly saving that amount or at least close to it?
If you believe you should be setting aside more of your monthly income toward savings, take a close look at your expenses to look for unnecessary expenses. A common culprit in today’s world is subscriptions – be sure to get rid of any you don’t use, from apps to streaming services. Even if you do use them all, could you be using them more efficiently? For example, with the amount of content available on streaming services this days, you might not even miss the others if you choose to only subscribe to one.
Consolidate and simplify accounts
Next, take a look at the places you keep your money. If you have multiple savings, retirement, or investment accounts, consider consolidating them to streamline your finances and reduce the hassle it takes to manage them all. Be sure to compare fees, interest rates and other features before making any changes.
Reevaluate your financial goals
It’s important to remember why you’re saving in the first place to stay motivated to save. Take the time this season to review your saving goals. What are you saving for in the long and short term, and do you still want or need to save up for those things? If yes, are you on track to reach your goals on schedule? Do you need to make any changes to the amount you set aside each month, or to the timeline?
If you no longer need or wish to save up for the goals you chose in the past, consider setting new ones at this time. Think of your future wants and needs, as well as things you’d like to enjoy in a few years or a few months. For example, your saving goals can include a down payment on a home, a new car, a recreational vehicle like an ATV or a boat, a dream vacation or funding for a wedding.
Automate your savings
Now that you have your saving goals clearly defined, it’s a great idea to automate the process. Set up automatic monthly transfers from your checking to your savings account(s) so you never forget to feed your savings. You can specify the amounts you’d like to put into each account and choose the day of the month that works best for the transfer.
It’s much easier to stick to your savings goals when it happens automatically! If you don’t have the wiggle room to put as much away in a certain month, you can always transfer the money back to where you need it if absolutely necessary.
Use a savings app
Bring your savings to the 21st century by harnessing the power of a savings app. You can choose from any number of money management apps, like YNAB, which will allow you to track your savings, review and analyze your spending habits and help you stick to your budget each month without fail. Other savings apps even allow you to invest and save in the app. Keeping your savings easily accessible and manageable will make you more likely to stick to your goals.
Spring is in the air, and it’s time to make your savings sparkle again. Use the tips outlined here to spring clean your savings to benefit your short and long-term financial health.
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