Although the economy has shown a slight improvement, the recent economic downturn has given families quite a scare. People are more aware then ever of their finances, which is a good thing. This season when you are spring cleaning your home take a couple hours to spring clean your budget and finances. Finances can be a source of anxiety in any family, but as a single mother it is vital for me to keep my budget in tip top shape.
Here are a few spring cleaning rules I use for my budget
Take Inventory of Your Bills
Know thy bills! This is a ground rule to follow if you want to keep on top of your finances. Taking inventory of your bills helps you to develop an accurate budget. Create a financial spreadsheet with the following information:
- Name of the Bill
- Amount Due
- Due Date
- Balance
- Date Paid
- Amount Paid
- Reference or Check # used for payment
A financial spreadsheet is a simple way to keep track of your bills and avoid late payments which affect your credit score and late fees which affect your wallet. The great thing about an excel spreadsheet is you can use different tabs in the same workbook, dividing up the bills on a monthly basis making it easy to read and organize.
This is the time to make goals. If you have a balance you want to pay off by the end of the year formalize a plan and put it in your budget. If there are balances that need to be transferred from one credit card to another with a lower interest rate, don’t procrastinate make the call.
Review Your Bank Statements
I look at my checking account on a daily basis and when I receive my banking statements I take a close look at where my dollars are going. Take time to review your accounts. Look for anything that is unfamiliar and if you see something that is report it immediately to your bank. Be proactive in preventing identity theft. This is a great way to look at your family’s spending trends and it gives you an idea on how much you actually spend on grocery shopping, gas, transportation, entertainment, etc. Your bank statement is a great resource for creating the family budget.
Order Your Credit Report
We all know the significance of those three little numbers called a FICO Score. Keeping your credit score healthy is especially important in this economy. You can retrieve your credit score and report by going to FICO’s website or by going directly to Transunion and Equixfax to get immediate access. Reviewing your FICO score quarterly will let you know what you need to work on and if they are any mistakes you can dispute them online.
Review Important Documents
Tax season isn’t the only reason to keep your official documents in order. But, it is a good reason to start! Keep a separate file folder for your taxes and organize them by year. Throughout the year make it a habit to file anything that pertains to that year. Other vital documents to review are your insurances, whether it is car, life, house, or health make sure they are up to date and you have them in a specific place. Do some research to make sure you are receiving the best rates available. If you don’t have a life insurance policies or other policies to protect yourself and your family make it a goal to do it this year.
Trim the Excess
Trimming away the excess is a great way to designate your dollars where they matter most. After reviewing your bank statement and you realize you are spending $ 25.00 a week on lattes or $7.00 a day on lunch this may be the excess that if trimmed can lead to a savings account, a Christmas club, or even a credit card being paid off. For example, that $25.00 a week adds up to $1300 a year and the $7.00 a day lunch is $1820.00 a year adding up to a grand total of $3120.00. It is always an eye opening experience when you look at all of the excess dollars we spend on very temporary pleasures.
Save, Save, and Save
The one crucial lesson we learned through this economic crisis was the importance of saving for a rainy day. Having an emergency fund is essential when you have a family. Find a way to set money aside every month, regardless of the amount. Look over your 401k or retirement savings and reassess your financial plan. Make adjustments if needed and make saving a priority for your present and your future.
Create the Budget
Creating a budget requires you to take a serious look at your finances and develop a budget that is realistic for your family. Put aside money for bills, tithing, groceries, transportation, savings, healthcare if needed, and entertainment. One great suggestion I had read about was taking cash and placing it in a separate envelop for entertainment for the month once it is empty you have to wait until the next month to replenish the envelop.
God wants His children to be prosperous but also wise with our finances. Take control of the money God has blessed you with and don’t let it control you. Be generous, responsible, and find ways to save money so that your family can survive and thrive in any economic times.
Copyright © Chere Williams, Moms of Faith, All Rights Reserved
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