Home isn’t the only place that benefits from a good scrub. Our bank accounts need a spring cleaning, too!
Whether it’s reorganization, budgeting or setting new goals, it’s always a good idea to check your financial situation so that you can feel confident and secure.
Here are five steps to help you declutter your finances:
1. Ask yourself: how do I want to feel at the end of this process?
Do you want to feel organized, at peace, happy, focused, or something else? When you’re clear on how you want to feel, you can find ways to get there. Here’s an example: I want to feel organized and at peace about my finances. I want to know that my personal paperwork (e.g. estate plan) is in order, my financial records are organized, and my banking is streamlined so that I’ll feel confident and secure about my finances.
2. Create a list of everything you'd like to accomplish
Some possibilities may include organizing all of your financial record-keeping, getting your estate paperwork (will, healthcare directive, power of attorney, etc.) in order, revisiting your financial goals or creating new ones. You could also set up some automatic transfers to take the effort out of doing your finances, meet with your financial planner to review your investments or speak with a non-profit credit counsellor about your budget and debt.
3. Prioritize your list in order of importance
Sometimes we need to start with a small project to get a “win” under our belt and sometimes we need to tackle a big one, knowing that once it’s done, everything else will be easier.
4. Focus on one task at a time
And finish it to completion, even if it’s over time. This will help you keep attention and focus on the single task at hand.
5. Get yourself organized to maximize your time and effort
An analogy is baking a cake. Instead of grabbing each ingredient when needed, which you may or may not have in your home, it’s a better use of your time to gather all ingredients and tools before starting the process. In terms of finances, think about your first priority and what you need to accomplish the task. Do you need folders and labels to organize your financial documents? Do you need to talk with a professional (e.g. lawyer, financial planner, financial institution, non-profit credit counsellor, accountant, etc.)? Or do you need to block out some quiet time, brew a cup of coffee and put your favourite music on so that you can work productively?
While we only listed five steps, in reality, there are seven. Step six is to celebrate when you’ve accomplished one of your priorities! This can be a big, daunting task and you did it, so pat yourself on the back and find ways to stay committed to organized finances so that at this time next year, it won’t feel as big. And finally, the last step is to start on the next priority and repeat the steps until you have finished your spring cleaning for the year.
Stacy Yanchuk Oleksy is Director of Education and Community Awareness at the Credit Counselling Society.