3 Quick Tips To Clean Up Your Finances

The seasons have officially changed, and the new year is slowly creeping up on us. Right now, is the perfect time to do a little bit of prep to start the new year off right. What I’m talking about here is checking in on those personal finances and getting yourself all setup for success once that ball drops.  

Check out the easy tips below to get that financial journey tidied up for next year.

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1. What can you shed?

Everything in life sheds, it’s a way for living things to drop the useless remnants of the past and start new growth. Your finances should be the same, new growth can happen by shedding a few unnecessary things. Take a look at the last few months of finances (I like to go back 3 months) and write down all of your subscriptions and recurring payments. Is everything absolutely necessary? Be honest. Do you have memberships that you’ve been paying for that have gone unused? Do you and your significant other both pay for Netflix or similar streaming service? It may seem like a small amount of money, but these little intentional changes could make a huge impact on your finances once added up. 

2. What can you save?

Now that we’ve just identified where we can save money every month. Let's focus on turning that money into more money. Or with the holiday season coming in hot, maybe that extra couple hundred dollars you’re saving for the next few months can go towards gifts, or a holiday trip. Every little bit of money that you can save will make a difference once retirement comes around. $50 a month might not seem like much right now, but at 65 that could make a huge difference. 

Disclaimer: This is not financial advice; I am not a licensed financial professional. The following statement is meant for informational purposes only and does not constitute financial, accounting, or legal advice.

Last year if you invested $600 ($50 saved a month x 12 months) into Coca Cola stocks you would have $721.24 today. That’s a return of 20.21%! If my math is correct (if you know me, you know math isn’t my strong suit at all), and factoring for the same rate of return (realistically this will fluctuate, but for examples sake we’ll stick with it); and assuming you invest $600 every year, and factor for compound interest; in 38 years that would be $3,879,196! OVER THREE MILLION DOLLARS!! 

How important is that extra $50 a month now? 

3. What's not working? 

By this I mean, where in life can you cut back? We’ve already shed unused or unnecessary subscriptions. But what areas in life can we identify as truly unneeded or excessive? Do you stop every morning and grab a coffee on the way to work? Depending on where you get a coffee this could be an extra $520 to $1300 a year! Going out to eat or ordering takeout more instead of cooking at home? Take the time to identify the areas that are costing you money. These could all be areas that you save a crazy amount of money.

A few months back Hunter and I took a very in depth look at our finances and followed the step above, we ended up with close to $300 extra every month! The smallest little changes to your finances will help, and if used correctly could completely change how you enjoy your future.