Our 15 best tips for financial spring cleaning

We've all just lived through a year of rough financial times. Time for a financial spring cleaning. What better time to review the way you spend and save your money and find ways to improve your financial position for the coming year?

Here are 15 tips for getting started. First, let's look at things you can do to improve your debt situation or find additional cash, then we'll talk about ways to use that newfound cash:

  1. Check your credit card interest rates. Even if you pay off your credit card bills each month, it's a good idea to check your rates just in case you hit a rough financial patch and have to put off paying your cards in full for a couple of months. Most credit card companies jacked up people's rates considerably in the last year, but they did lose a lot of customers. Some are trying to win back those with a good history paying bills on time, so you can find deals out there. Bankrate.com has an excellent search tool that lets you look for the best rates depending on your credit score, by card type and by issuer.

  2. Set up autopay on your debts. If you're not already paying your debts automatically, set this up right away. Even one late payment can hit your credit hard, and you could see interest rates that you have to pay on your debt skyrocket. While the new credit card law does put more controls on credit card companies, they can raise your rates for at least six months when you pay late. Also, you can even earn points if you pay your bills on a credit card with reward points. If you can't use a credit card to pay your debts (I know some utilities won't allow it), then set up an autopay using online banking. Why waste money on stamps and envelopes paying bills? Think about how much you can save over the year in stamps alone. Plus you never have to worry about a late payment.

  1. Check your reward cards. Credit card companies changed the rules on most cards before the new credit card bill took effect. Many reduced their reward benefits, but some have introduced cards with better rewards as they seek out the best customers. So if you do have excellent credit, compare your rewards with those of the new cards on the market. Again Bankrate.com is a good source. You can even search by my favorite type of reward: cash back cards.

  2. Review your cable deal. Cable companies run special deals all the time introducing new channels or Internet services. Go to your cable companies Web site and check out the deals currently available. You may be able to get a better deal as well as additional services/

  3. Review your wireless bill. Review your wireless useage and make sure you have a plan that best meets your needs. For example, if you're paying for unlimited useage and you only use 300 minutes a month or less, you may be able to lower your bill by $30 a month or more depending on your wireless company. If you find month after month you're paying for extra minutes, you may need to increase your time. Those extra minutes can add up fast and cost you more than to upgrade your plan. If you just use your wireless phone for emergencies, consider a pay as you go plan rather than a standard monthly charge.

  4. Check the deal on your home phone. More and more telephone companies offer unlimited long distance. Also, many offer package deals that include your cable and wireless. Compare these deals with what you're already paying and figure out which one is the best considering your use of your cable, wireless and landline phone services.

  5. Review your home and car insurance policies. With home prices dropping, you may be able to save money by lowering your insurance to match the current value of your home. You also may be able to lower your costs by increasing your deductibles. If you do decide to increase deductibles, be sure you can cover that deductible if you need to file a claim with emergency funds you've socked away.

  6. Shop for new home and auto policies. After you review your policies, take the time to shop for new policies. You may find you can save money by changing insurers. Insweb and Insurance.com are two good Web sites on which you start your search.

  7. Spend your gift cards. Don't let your gift cards expire just because you stuck them in a drawer and forgot about them. Use them to buy needed items right away. You could even lose them just because you've been letting them hang around in your wallet waiting for just the right idea to pop into your head. If you don't spend the money, it's like giving a gift to the store or credit card company from which it was bought.

  8. Check your credit reports. You should do that for free once a year by using annualcreditreport.com. It's much easier to fix a problem the closer you are to the date it happened. Also, you can be sure no one is using your credit cards or good name fraudulently.

  9. Fix any credit problems. If you find any questionable accounts or any errors in your credit report, work on the fix immediately. You'll get instructions explaining how to question errors on your report when you receive your copy. Don't put if off -- take care of it immediately.

  10. Increase your retirement savings. Now that you've found a little extra cash, increase your automatic savings into your retirement account. You can do this as long as you haven't maxed out the amount you're allowed to save. if you increase your percentage by 1% per year, you'll hardly notice the difference, and you'll be much better prepared for retirement. I also recommend people increase their automatic savings by 1% whenever they get a raise. You'll get a bit less of a raise, but you'll improve your retirement options tremendously over the years.

  11. Review your investments. You may find that hard to do after the crash, but if you haven't checked your investments recently, take the time to do it now. Research your investments, see how they are doing and see how your investments stack up.

  12. Rebalance your investments. You may find your investments are out of whack. You could have more in stocks than you feel comfortable carrying. Or you could have moved much of your portfolio into safe investments that are growing at only 2% or less per year. When inflation returns, you risk the possibility of losing your money each year if it isn't growing faster than inflation. Re-balance your investments so you have the right percentage invested in stocks or stock mutual funds, bonds or bond mutual funds and cash. You decide that balance based on the risks you're willing to take. For example, if you think stocks are now safe, you may want to invest 60% or 70% of your portfolio in stocks, as long as you won't need the money for at least 10 years, and 30% or 40% in bonds and/or cash.

  13. Set up an appointment with a financial planner. It's a good idea to sit down with a financial planner once a year to review what you are doing with your money, set goals and be sure you've got your money allocated appropriately so you have a chance of meeting those goals. No plan is set in stone, so meeting annually with a financial planner is a good idea. But, seek out a planner who is fee based rather than commission based. When a planner gets money based on commissions for the products he or she sells, you may getting advice that helps the planner earn more money. For information on how to find a planner in your area, check out the Financial Planning Association.
Spring cleaning your finances this year is so much more important as we recover from one of the worst downturns this country has ever seen. While it's a good idea to review your finances every year, don't even think about missing it now.

Lita Epstein has written more than 25 books, including The Complete Idiot's Guide to Improving Your Credit Score and The Complete Idiot's Guide to Personal Bankruptcy.
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