The days are getting longer and the sun is finally breaking through the clouds. Springtime has a way of motivating a person to clean out the house - among other things. There are many reasons you should take this time to also brush up on your current financial situation. For starters, there’s no better time to plan a budget than after you pay your taxes. Seeing what you owe this year can give you a better idea of how tight your savings should be leading up to the next. If you need to set aside money for your summer plans, now is the time to do so. In short, getting a sense of your current financial standpoint helps set expectations on how you can spend for the rest of the year.
Step One: Determine Your Assets
When it comes to financial spring cleaning, a great place to start is by evaluating what you have. Take a look at all your accounts, including income, savings, and retirement. Beyond that, track the worth of your other assets and see if any of them have appreciated or depreciated in value. Typically things like cars, boats, and other recreational purchases aren’t going to gain value. However, if you own a home, your property may be worth more now than it was when you bought it. You can get an instant home-value estimate here.
Step Two: Check Your Credit Report
Most banks offer a credit score alert that you can check online whenever you want, so you should already have some idea of what that number is. Checking your credit report, however, is a much more detailed affair.
You can't just get a credit report any time you check your account like you can with your overall score. That said, you are entitled to an annual free copy of your credit report from each of the three major bureaus: Experian, Equifax, and TransUnion. Look through each credit report and keep an eye out for any errors. They happen more often than you might think, and if you spot one, you can dispute it. If the errors get dismissed, your overall score will improve, which can help if you need a home or car loan during the upcoming year.
Step Three: Set Your Financial Goals
By now, you should have a pretty good idea of where you stand financially. Hopefully, you’ve finished this whole exercise and found that you are in great shape. However, there are always goals to set. Maybe you want to start saving more for retirement, or perhaps there is an investment property you have your eye on. Write down your goals, and identify which are a priority so that you can focus on those first. Your financial goals are personal and completely up to you. Now that you know where you are to start, you can have a clear idea of what you need to do in order to get where you want to be.
Spring is the perfect time to go over your finances to get a better understanding of how you can spend your money throughout the rest of the year. Figuring out your income and assets helps you determine and stick to a budget. Now is also a great time to take a hard look at your credit report to find any errors you can dispute. Finally, once you know where you stand, you are better equipped to set realistic goals you can work toward for the rest of the year.
Gloria Martinez started WomenLed to celebrate the advancements women have made and inspire women to become entrepreneurs and seek promotions in the workplace.