3 ways to clean up your finances in the spring this season
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Nothing calls for a better time to get organized than spring cleaning season. Rainy weather is a good opportunity to spend a cozy day indoors, tidy up your home, or clean out your closet.
This is also an opportunity to take stock of your finances. With the end of winter and vacation expense reimbursement, and the anticipation of warmer weather and summer travel, you’re in the process of getting your money in order.
Below, personal finance experts offer their thoughts on three ways to clean up your personal finances this season.
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1. Clean up your taxes
With the tax deadline always falling in April, spring also means tax season. Now is the time to decide what you will do to tie a bow on taxes and put them behind you until next year.
If you are preparing for pay a tax bill, figure out how you’ll cover the cost (paper check, credit, debit, or IRS payment plan), and if you’re expecting a tax refund, figure out how you’ll use that windfall.
“Consumers should think about what they would like to do with their tax refunds if they received one, whether that means putting them towards a savings goal or building up an emergency fund,” said Sasha Grabenstetter, Certified Financial Advisor at eMoney Advisor. . “Once they receive a refund — or not — they should figure out how much tax is coming out of their paycheck and consider resubmitting their W-4 form to make changes for the year. tax 2022.”
And if you haven’t filed your tax returns yet, you’ll have to jump on it because the April 18 deadline is fast approaching. Tax software such as TurboTax®, H&R Block®, Credit Karma Tax, and TaxSlayer® can help you file your state and federal returns quickly and accurately while maximizing your deductions for a bigger tax refund.
While you’re at it, avoid the rush of preparing tax documents next year by creating a “tax toolkit” now where everything is centralized in one place, suggests Marsha Barnes, Certified Financial Social Worker and Founder of The Finance Bar.
On the TurboTax secure site
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Yes (for simple returns** only)
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2. Declutter your debt
In the spirit of cleaning up, there’s one thing we know that can get things messy pretty quickly: bloated debt.
Now is the time to organize your debts according to how you want to pay them off.
“Choose the debt with the lowest balance, the highest interest rate, or the one that causes you the most angst,” Barnes says. “There are no perfect rules for where to start. Start with a desire to build your financial confidence.”
Whichever debt you choose to pay off first (or try to pay off first), make sure your next step is to have a plan for paying off the other remaining debts. For example, suppose you have both outstanding credit card balances and student loans. A smart move would be to pay off credit card debt as soon as possible since credit cards have much higher interest rates, but then have a plan in place to eventually move on to paying off your student loan — especially since the federal student loan freeze is set to end on May 1.
In your planning, borrowers should set aside funds for student loans to ensure they can make payments when the freeze ends, recommends Grabenstetter. You might want to consider using a student loan repayment app like Chipper that rounds up users’ daily spare change to systematically reduce their student loan debt.
3. Prepare your summer budget
As summer approaches, you are probably planning a well-deserved vacation, as well as any other sunny weather activity.
Instead of waiting until June, prepare your summer budget a season in advance to help you get your money’s worth.
“Allocate more funds to these goals in the coming months so you don’t run out because your expenses don’t allow it,” says Grabenstetter. She even suggests budget for the little things you end up buying, like sunscreen, bug spray, snacks, sunglasses, and beach towels.
And when it comes to making those purchases, use a credit card that gives you either cash back or travel rewards for your spending. The Chase Freedom Unlimited® does both, giving cardholders 5% cash back on travel purchased through Chase Ultimate Rewards® (where you can redeem for cash back, travel, gift cards and more) , 3% cash back on drugstore purchases and restaurant meals (including eligible takeout and delivery services) and 1.5% cash back on all other purchases.
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Earn an extra 1.5% on everything you buy (up to $20,000 spent in the first year) – worth up to $300 in cash back. That’s 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on restaurants and drugstores, and 3% on all other purchases.
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Barnes adds that avid summer vacationers can also try spending for value this coming season, using the first month of spring to think about their summertime desires.
“Write these items or experiences down on a piece of paper with the approximate costs next to it,” she explains. “In order of priority, fit your top one to three experiences into your budget. Do your best to avoid forcing them to fit. The overall goal of budgeting is to provide financial safeguards, or financial security , around your money and your habits.”
At the end of the line
This spring, get your finances in order by making sure your taxes are taken care of, your debt is organized for repayment, and your summer trips are budgeted in advance.
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Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.