Spring has officially arrived, although here in New York City, you wouldn't notice since it snowed this week...
Nonetheless, here are 10 ways to get your finances in order. Just as you may clean out your closet or complete other "spring cleaning" chores around the house, your finances should be cleaned up too.
1. Clean-Up Your Finances, Literally: Don't you hate when your wallet is a total mess and you can't even find your driver's license? Aside from organizing your wallet, closet, etc., you need to have all of your bills arranged in a neat fashion, instead of tossing them into the kitchen drawer or allowing bills to pile up on the dining room table. With too much clutter, we tend to lose bills, causing us to make late payments, which lowers the credit score! Categorize all of your bills and keep each type in a separate folder: rent/mortgage, utilities, phone/cable/Internet, credit card, car payment, etc.
2. Track Your Expenses: Use HelpSaveMyDollars.com's free online Expense Calculator. Simply enter in your take-home pay, followed by all of the different expenses you have and the calculator will determine that difference, which is equal to your savings. The calculator allows you to visually see where your money is going each month. If you have an iPhone, download the iXpenseIt app, which enables users to take a photo of the receipt after making a purchase in a store - the app will store that data, making it easy to keep track of your spending.
3. Cut Up the Credit Cards: Use a cash only budget. Leave one credit card intact for emergencies only. Credit cards have no boundaries and by using cash, you are physically removing something from your wallet, instead of using plastic to pay for things. Remember, do not close down your credit card account - that will hurt your credit score!
4. Automate Your Savings: By automating your savings, a certain amount of money is transferred from your checking account into your savings account each month. With less money in your checking account, you'll be forced to make do with less, while effortlessly building your savings at the same time. According to Kimberly Palmer, author of Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back, "It's so tempting to upgrade our lifestyle when we get our first job or a better-paying job, but the fact is, we have to save at least one-quarter of our income (including retirement) to achieve any sort of financial security. It sounds impossible, and sometimes it is, but on average that should be our goal. By focusing on minimizing the big three costs -- housing, transportation, and food -- you can save more than you would have thought possible."
5. Pay the Bills as They Arrive: Each bill has a different due date, making it nearly impossible to remember due dates. Solution? Pay the bill as soon as it arrives in the mailbox! After all, 35% of your credit score is whether or not you pay your bills on time. By downloading the Pageonce - Money and Bills iPhone app, you can create a calendar of when your bills are due.
6. Retirement Savings: Always contribute up to the maximum amount of money your employer is willing to match in your 401(k). Usually, employers will match 6% of your income, so you should contribute that amount, too. Additionally, open up a Roth IRA at a discount brokerage firm. Unlike a 401(k), money in a Roth IRA is money you've already paid taxes on. You can deposit up to $5,000 into a Roth IRA in 2011. By saving for retirement as early as possible, you'll take advantage of compounding interest.
7. Financial Goals: Where do you want to be, financially speaking, in 5 years or 10 years? Do you want to pay off all of your credit cards in a year or have your mortgage paid off in 10 years? Regardless, create a clear and detailed plan as to how you'll achieve these goals.
8. Get Out of Debt: If you have credit card debt, try to double the minimum payment, which will get you out of debt in a few years, regardless of how much debt you're in.
9. Credit Report: When was the last time you checked your credit report? If it has been over a year, you're taking a huge financial risk. You can check your credit report for free every year by visiting AnnualCreditReport.com. Look for any errors, suspicious activity or signs of identity theft.
10. Spread the Knowledge: Did you know that April is National Financial Literacy Month? Only 24 states require students to take personal finance classes in high school. We have a financial literacy crisis in this country. Share any and all financial strategies/tips with friends and family and especially your children, since chances are they're not learning about this topic in school. You'll save yourself tons of money and aggravation if your son is responsible with his credit card, especially if you are the co-signer on the card.
Scott Gamm is the founder of the personal finance website HelpSaveMyDollars.com. He has appeared on NBC's TODAY, MSNBC, Fox Business Network, Fox News, ABC News and CBS. Follow Scott on Facebook and Twitter.