6 Financial Items to Include on Your Spring Cleaning List

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When most of us think of spring-cleaning, we think about dusting and sweeping and polishing. But there are other areas besides your home that could use a good annual cleanout, like your finances. Here are six things you should do this spring to make sure your money management strategy is as neat and orderly as your house will soon be.

1. Remove Unnecessary Expenses

Are you paying for more cable channels than you really need? Do you still have a gym membership when you haven't gone in months? Take a look at your annual and monthly expenses and slash anything that's no longer serving you.

2. Come Up With a Debt Payment Plan

If you have any outstanding debt, it's time to come up with an aggressive debt payment plan.

The "snowball" method is a popular strategy that works for many people. It involves throwing any extra money you have (like that cash you saved by slashing expenses in the previous section) toward paying down the account with the smallest balance, regardless of interest rate. Once that one's taken care of, you move down the list to the account with the next-smallest balance, until eventually everything has been paid off.

The idea behind this method is that crossing debts off your list will give you the psychological victory of "winning," which keeps you motivated. Debt is a burden that seriously limits your ability to make the most of your money. Make this the year you finally eliminate it.

3. Review Your Insurance Coverage

Chances are you've had some changes in your life since you first signed up for your various insurance policies. Review these annually to make sure you're still getting the coverage you need.

Call up your insurance agents for your home/renter's insurance, auto insurance and life insurance to discuss your current needs and find out if any plans or features have been added recently that you may qualify for. It may take a little time on the phone, but it's worth it when you have the peace of mind of knowing you're adequately covered in case of emergency.

4. Check Your Credit Score

Your credit report is one of the most important pieces of your financial life. The difference between applying for a loan with great credit versus applying for a loan with bad credit can yield a difference of tens of thousands of dollars over a 30-year mortgage.

You're entitled to request a free credit report each year from each of the three major credit reporting agencies: Experian, Equifax and TransUnion. Head to annualcreditreport.com to get yours.

Scan your report carefully to make sure nothing looks off. If you see a late payment you don't recognize, a balance that doesn't match your records or any other discrepancies, contact the reporting agency immediately to open up a dispute.

5. Shop Around for Better Rates

We often shop around for the best deal when we sign up for a new service, but once it's become a monthly line in our budget, we tend to pay it and forget about it. Take this time to re-evaluate your regular expenses and see where you can save some money.

Examine things like your cellphone bill and cable bill and do some research to find out if there are any new plans or promotions you qualify for. Call up customer service and negotiate -- they're often willing to make a few concessions to keep a longstanding customer, whether it's giving you a discounted rate or some premium features for free. Don't forget to arm yourself with the prices competitors are offering; threatening to switch providers can go a long way in making a your provider willing to work with you.

6. Revisit Your Budget

Our needs change over time, so your budget should be flexible enough to change with them. Revisiting your budget at least once a year ensures that it still works for you. Your budget will only be successful if it's in line with your current life and priorities.

Review your budget's performance over the past few months to see if there are any areas you can cut, any areas you need to increase or any new categories that should be added. If you're struggling to keep up with your budget, try adopting the anti-budget: pull your savings from the top first, spend the rest without constraint.

Paula Pant is an entrepreneur and real estate investor who has traveled to 32 countries. Her blog Afford Anything is not the same tired, stodgy, uninspired financial advice that you'll find on other websites. Afford Anything shows you how to crush limits, create wealth and maximize life.
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