The middle class budgets for today’s comfort, rather than their long-term plan for designing their perfect life.īy setting and reviewing your long-, mid-, and short-term goals, you can re-evaluate your immediate monthly budget to make sure it serves what you’re trying to accomplish. Starting with long-term goals and then working backward is one way the wealthy think differently about money.
You can tweak and adjust your spending, savings, and investments as needed to put yourself on track for hitting your short-term targets for the end of this year. Your financial spring-cleaning offers a perfect opportunity to check in on your progress. Do you have as much cash set aside in your emergency fund as you’d like? Are you carrying any credit card balances, and paying high interest rates? Are you putting as much toward your tax-advantaged retirement accounts as you’d like? When you’re clear on your long-term financial goals, you can then work backward to set mid-term financial goals over the next two to five years and short-term financial goals for this year. For example, I want to reach financial independence within the next five years, so I set targets accordingly for net worth and passive income by the end of this year.Ĭheck in on your own personal goals. Set (or Check Progress on) Financial Goals for the Year You can also purchase your own paper shredder for less than $50 on Amazon. Many banks and shipping businesses, like FedEx, offer shredding services. If something isn’t valuable enough to justify space in your fireproof safe, then it isn’t valuable enough to keep as a hard copy.įinally, make sure you shred all financial or personal documents when you discard them to avoid identity theft. For any original documents you simply can’t bear to part with, put them in a portable, fireproof safe. Borrow or rent a scanner if you don’t have access to one already to make the transition painless. Make your file storage digital to be more organized and cut down on clutter. If my laptop stops working after I spill water on it - which I’ve done - I won’t lose my critical documents. I back them up through two systems: an automated cloud backup service that constantly uploads my files for secure off-site storage, and an external hard drive I keep at my apartment. Today, I keep all of my important documents digitally.
Then I moved abroad about five years ago and had no choice but to get rid of it. Like most Americans, I used to keep a big, bulky filing cabinet for important paperwork. You’ll need to itemize each of these deductions come tax time. Make sure you keep your donation receipts in case you decide to claim a tax deduction for charitable giving. Your trash pile should end up being the smallest of the three. Nearly everything you can’t sell can be donated. You can donate your clothes, furniture, and old electronics. What you can’t sell, donate to a charitable organization. Sell these on Craigslist, eBay, or Etsy to recover some of your initial cost. There’s a market for your old cell phones, computers and other electronics, clothes, furniture, and children’s belongings.
Separate your outgoing items into three piles: sell, donate, and trash. Have old iPhones just sitting around? Sell them for cash. When in doubt, throw it out, sell it, or give it to someone who could use it. Go through every room, closet, and storage space with a fine-toothed comb.
It slowly fills up our homes, leaving us constantly shuffling items around in a doomed attempt to tidy up. We all accumulate far too much stuff in the course of modern life. You can knock out several house cleaning and financial cleaning tasks simultaneously.
#FINANCIAL SPRING CLEANING HOW TO#
How to Spring-Clean Your Financesīreak out your financial dustpan and set aside a weekend morning to clean up your personal finances and plan how you’ll end this year in far better financial shape than when you started it. So just as you spring-clean your home to give it a more thorough scrubbing, you should do the same with your finances. Just as your house doesn’t clean itself, your money drifts into chaos and entropy if you ignore it for too long. To create the kind of lifestyle you dream of requires careful planning and disciplined work.
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