Spring is here and it’s the perfect time to clean up and declutter. Instead of just grabbing an all-purpose cleaner, let’s go to town on spring cleaning with your money.
Here’s four spring cleaning money tips.
1. Organize Tax Records
Now’s the time to file last year’s taxes. Get familiar with common tax deductions and be sure to take all the deductions you can. Start getting organized for this year’s taxes by logging deductions as they occur throughout the year versus waiting until tax time.
The IRS states that you should keep your tax records for three years, or seven years if you have filed a claim for worthless securities or bad debt.
Have a “Shredder Saturday,” and put the paper to the shredder. Not quite as fun as putting the pedal to the metal, but nonetheless a good time if you crave organization.
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2. Know Your Net Worth
Student Loan Hero, did a survey found the biggest money resolution is to pay off debt and the biggest money regret of the previous year is not saving or investing as much as you wanted to.
Your net worth is the best way to measure actual progress and be accountable towards your money goals. Your net worth is your total current assets (savings, investments, car, and home value) minus your total current liabilities (mortgage, car loan, student loans, credit card debt, etc.).
Now that we are few months into the year, now is the perfect time to check in on financial goals for the year by calculating your net worth.
The best way to find out your net worth is through financial statements. I freakin’ love financial statements (here’s why they’re the bomb.com!). Your Balance Sheet shows the total of your assets, liabilities, and net worth. Want help with this? Get a 1-hour one on one money coaching session. Here are the details.
3. Sell Stuff
Get paid for decluttering. When you are spring cleaning go through old items around the house and sell stuff online. Now it is easier than ever to sell old laptops, cell phones, tablets, furniture, old music instruments, clothes, purses, or whatever online.
Plus, I sold everything I owned to travel! Here’s more on lessons learned from selling everything I own to travel and how I decided to live in an RV full-time.
4. Check Your Auto Savings
Alright, when you first landed your job, ya setup a percentage of your pay to go towards your 401(k) plan. It has been years since you checked in on your auto savings. By pulling together your net worth (see number 2!), you’ll review the current total value of your retirement accounts and investments.
Now’s a perfect time to get refreshed on what percentage of your pay is automatically going retirement. Is it 3%, 5%, 10%, or more? Or whoops, Forbes reported that 45% of working age Americans aren’t saving for retirement at all.
Happy spring cleaning! Use these four spring cleaning money tips.