Spring cleaning is all about doing away with the dust and grime that settled over winter to make room for a cleaner, fresher and happier environment. That type of physical and mental refresh can be mood-boosting and clarifying, and it doesn't have to be limited to your physical space.
Direct some of your deep-cleaning energy toward your financial habits to make room for greater financial health this year. Here are six ways to spring clean your finances.
1. Refresh Your Budget
Your budget is the bedrock of your financial health, so sprucing it up deserves a top spot on your spring cleaning list. Budgeting directs your money toward your necessary expenses, your wants and your financial goals, from getting out of credit card debt for good to buying your first home.
Review your budget, noting whether you're spending within your limits or overspending in specific categories. Look for areas you might be able to cut back—such as by spending less at the grocery store, lowering your insurance rates or canceling unused streaming subscriptions—to help you reach your financial goals faster.
2. Review Your Credit Report
You can get a quick view of all your credit accounts—and make sure there are no surprises—by reviewing your free credit report and FICO® Score☉ from Experian. You'll be able to review your report and score and get personalized suggestions for how you might be able to improve your score, such as by lowering your credit utilization, avoiding a thin credit file or repairing your payment history.
In addition, review your report for anything that looks unusual, such as an account you don't recognize. If you see something that doesn't look right, you can dispute it with the credit bureau.
3. Take Inventory of Debts
If you're carrying a balance on your credit cards or are making payments on an installment loan, take this time to get a clear picture of what you owe. Start by listing out your debts, including the balance, due date and interest rate for each.
Then, come up with a plan for how you'll pay it all off. Try using Experian's credit card payoff calculator to see how increasing your payments can help you pay off debt sooner and save you money on interest.
If you're shouldering substantial debt, consider debt repayment strategies such as the debt snowball or debt avalanche method, which give you a methodical way to attack your debt. Starting with a plan can make getting out of debt feel more achievable.
If you have a good credit score, you could also consider consolidating your debt with a personal loan or a balance transfer card. These options can help you to pay less interest while you focus on paying off your debt.
4. Bolster Your Emergency Fund
Having enough savings to cover unexpected expenses such as a high medical bill or an expensive home or auto repair can help you avoid resorting to credit card debt in a bind. Experts recommend housing three to six months' worth of expenses in an emergency fund. If you're not there yet, make a plan for how you'll build up your emergency savings.
To stay consistent in establishing your emergency fund, you could set up automatic transfers into a high-yield savings account each payday. You can also build your fund faster by directing your tax refund or any bonus or windfall you receive into savings.
Avoid tapping into your emergency fund except in the case of a real emergency, and prioritize replacing any money you use so that the funds are there when you need them.
5. Boost Your Retirement Investing
Raising your retirement contributions by just a modest amount per year can mean a sizable increase in your retirement nest egg.
According to data from Fidelity, a 45-year-old with a salary of $70,000 per year could increase their contributions by just 1% to retire with an additional $42,925 by retirement age. The math is even more favorable if you increase your contributions earlier: A 35-year-old with an income of $60,000 per year could increase their contributions by just 1% to reach retirement age with an extra $85,492.
If you already contribute through a workplace 401(k) or an IRA, consider upping your contributions if possible. If you find it harder to get by without those funds, you can dial back your contributions. Just be sure to always contribute at least enough to take full advantage of your employer's 401(k) match if you're offered one. If you don't have an employer-sponsored plan, you can open an IRA on your own.
6. Maximize Your Credit Card Rewards
While you're reviewing your saving and spending habits, take steps to get the most out of your credit cards. Charging your purchases to a rewards credit card can reap stellar benefits, such as earning points toward flights and hotel stays or getting cash back.
You can make the most of your rewards credit cards by spending strategically—in other words, using cards that will earn you the most rewards in certain categories, such as grocery, travel or gas purchases. You can also diversify your credit card rewards so you earn more than one type of reward, such as cash back and airline miles. Another smart strategy for maximizing your rewards is to apply for a rewards card before a planned large purchase, such as a home renovation, in order to qualify for an introductory points bonus.
Be cautious when using rewards credit cards: Only use your card for purchases you can pay off each month to keep your credit utilization low and avoid carrying a balance. If you run up a high balance to reap rewards, you could wipe out all your gains by paying interest on those purchases.
7. Revisit Your Financial Goals
Did you set financial goals at the beginning of the year? If so, now's a great time to take a look at how far you've come, evaluate your progress and adjust your course as needed.
If you haven't yet, try coming up with personal financial goals, such as:
Grow Your Credit Score
While flowers are blooming and the sun's finally coming out, shining some light on your financial habits can illuminate whether you're making progress toward your financial goals or whether you need to tweak your habits a bit to get back on course.
On top of spring cleaning your finances, try increasing your credit score now. Experian Boost®ø gives you credit for the monthly bills you already pay, such as phone, utility and streaming service bills—which can translate to an increase in your FICO® Score within minutes.