Author Elaina Johannessen is program director for debt management plan operations with LSS Financial Counseling.

Spring is here [tips for a financial spring cleaning]

Though it doesn’t feel like it here in Duluth, Minnesota where I live, it’s been spring for a while now. As usual, I’m late in getting my spring cleaning done — and I’m going to blame the weather. Did you know that you can also do a spring cleaning of your finances?

Review your budget
What we spend can easily change in a heartbeat; for instance, groceries and gas prices fluctuate often. Therefore, look at your income and what you’re spending each month. Do you need to make any reductions in spending on non-necessities to offset any other price/cost increases?

Save, save, save
Once you’ve updated, cleaned up or created your realistic budget, determine what you can save each month. Think of it as a spring cleaning task to review how much you’re saving AND to see if you can increase savings. Or, if you haven’t been able to save in the past, it’s time to work it into your budget now. If you got a tax refund and still have money left, use that to jump start your savings. A good goal is to set aside at least six months’ worth of your expenses. Even though it seems daunting if you’re just getting started, every little bit helps. Starting is the most important thing to do. To help make saving easier, set up automatic deposits from your paycheck into a separate savings account.

Reduce debt
The best way to clean up our finances is to ditch or reduce debt. Get a plan in place to pay off your debt faster, which will save you a lot of money in interest in the long run. To save the most money, start with credit cards or other loans with the highest interest rate. Make higher than the minimum payment, or make extra payments to pay off the debt more quickly. Or if your budget is tight and you need to get rid of a payment faster, start with the lowest balance and pay extra to get rid of that debt sooner.

Once you’ve paid off one debt, put that debt payment toward the next highest interest or lowest balance, depending on your goal. Another great option is a Debt Management Plan (DMP) with LSS Financial Counseling. A DMP helps people every day pay off their debt faster and save money.

Go paperless, unsubscribe and automate
Make things simpler and cleaner. If you still get paper bills, switch to paperless so you can receive the bills via email. Then set up automatic payments through your bank, if it works for you.

Okay, you went paperless, but you are getting a ton of emails telling you about sale after sale. Go through those store emails and unsubscribe. It may surprise you how much less you spend on things you don’t need when you’re unaware of all the sales.

Some emails may be worth it if you regularly buy from that business/shop and you’re getting great deals. However, always keep in mind that just because something is on sale doesn’t mean it’s saving you money if you don’t really need it. So again — ditch those emails that are actually costing you more money overall.

Get organized
Go through and shred any paper documents you don’t need. Organize what you feel like you need to keep, and if possible, scan or take pictures of those documents and save them electronically to help get rid of clutter.
For tax purposes, it’s a good idea to keep pay stubs for a year. Hopefully you have access to them electronically via your employer. Regarding tax documents, it’s recommended to save them for three years. Determine what you absolutely must keep, and get rid of the unnecessary docs.

Help is available
Get started now on your ”spring cleaning” to get your finances in order. If creating a budget and managing debt seem challenging, the good news is there is help out there. LSS Financial Counseling is a trusted Minnesota nonprofit that offers free budgeting, credit and debt counseling to anyone.

To schedule your free, confidential appointment, give us a call today at 888.577.2227, email us or create your financial profile to get started online. Our certified financial counselors are available by phone, virtually, in-person or online.