Spring cleaning usually means refreshing your home, but your finances deserve a spring refresh too! If your spending has felt a little unorganized lately, the good news is it only takes 30 minutes to get back on track and feel more in control of your finances. Here’s how to spring clean your spending – fast.
Minutes 1-5: Review Your Budget
The foundation of a successful spending refresh often starts with your budget. Review your income, expenses, and what you had left (or how much you went over budget) last month. If your income was higher than your expenses, there’s a good chance you’ll have money left to save each month. If your expenses were higher than your income, this is a great opportunity to see where your money is going and which expenses you can cut.
Don’t have a budget? Now would be a good time to create one before you continue with the rest of this guide. Check out our fillable PDF Budget Worksheet to quickly see how your income and expenses stacked up this month.
Minutes 5-10: Get a Clear Snapshot of Your Spending
Now we’ll take a deeper dive into the expenses part of your budget. You probably don’t need to spend as much time reviewing essential expenses like your rent/mortgage or car loan, since those are likely fixed month-to-month. What we really want to look at is your discretionary spending, or spending on non-essential items that can be adjusted or postponed. Examples of this spending include any daily coffee purchased on the way to work, takeout on nights you don’t feel like cooking dinner, or subscription services.
Start by opening your recent bank statements and credit card transaction history. Quickly scan your transactions and take note of what you’ve been spending money on over the last month. As you look through, ask yourself the following questions:
- Is there anything non-essential you’re buying almost daily or weekly? If so, do those purchases feel small in the moment but look like they’re starting to add up?
- Are there any recurring charges for subscriptions, and do you use the subscriptions?
- What spending feels valuable vs. wasteful?
It’s important to remember that spending is personal. That daily coffee might be a non-negotiable to you, but it might fall lower on the list of spending priorities to someone else – and that’s okay. The point of this exercise is to increase your awareness as to where your money is going, whether you end up being content with what you see or identify areas for improvement.
Minutes 10-20: Cut Out the Clutter
There’s a reason you asked yourself the questions in the previous section – your answers are the very places you can probably declutter your spending. These “clutter” items are non-essential purchases you are spending money on that are slowly adding up, taking money away from your other financial goals.
Start by cutting:
- Any unused subscriptions that took you by surprise (“I’m still subscribed to that?”), and possibly even all subscriptions for the time being – if you are continually exceeding the amount of money you bring in each month. A subscription service is a nice-to-have, it’s not a necessity – and should be one of the first things you can slash from your spending.
- Purchases that feel wasteful to you.
- Duplicate services (multiple music platforms or streaming services).
Even if you only have one monthly charge to cut, you’d be surprised at the difference it can make. Saving $20 a month for a whole year is an extra $240 in your account.
Minutes 20-25: Refresh Your Spending Habits
Did you notice patterns in your spending that you want to change? For example, were there impulsive online purchases you wish you hadn’t made, or items you bought and didn’t end up using? Were there nights you had groceries in the fridge and didn’t really need to order takeout? Below are examples of small swaps you can make:
- Try making a meal out of what you already have at home instead of ordering takeout.
- Return items you ordered and haven’t used instead of saving them “just in case.”
The key is intention – by noticing patterns you would like to change and intentionally changing them, you’ll feel more confident and in control over where your money is going.
Minutes 25-30: Set Goals
Now that you know where your money is going, you’re in a better position to set financial goals. Keep your goals specific, achievable, and realistic – you’re more likely to achieve them that way. For example, if you determined that you can realistically cut $30 in takeout spending each month – consider redirecting that $30 to your emergency savings. This is a specific, achievable, and realistic goal because you have the $30 and the means to redirect it each month. It’s important to remember that progress isn’t always linear – you might hit a setback from time to time, and that’s okay. Try to pick up where you left off in the following month.
If you’re looking for an in-depth guide to budgeting, check out our Budgeting 101 Guidebook. If you live, work, worship, volunteer, or attend school in Monmouth or Ocean Counties and want to discuss your financial goals further – visit one of our local branches or call to make an appointment at 732.312.1500.
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