Key takeaways
- The old adage, “You reap what you sow,” is as true for those trying to get their financial houses in order as it is for farmers.
- Springtime is the season for thorough house cleaning and fresh starts. It’s also a great time for cleaning your financial house, which can give you a financial fresh start too.
- Taking steps to sow strong financial seeds now, could allow you to reap financial benefits six months later.
- Things like writing a brief financial vision narrative, saving more money, using a budgeting app, eliminating high credit card payments, and staying aware of your spending habits work together to clean up your finances in spring so you can see a tangible benefit in the fall.
You reap what you sow. I realize that’s a biblical reference, but I’m looking at it from a bit of a more practical standpoint: sowing in the spring and reaping in the fall. And, it’s that time of year—it’s spring. Flowers are blooming, trees are sprouting new green leaves, and everything just smells fresh, giving homage to the saying, “Spring is in the air.”
1. Write down exactly how you want your finances to look in six months. This is a very brief narrative from the perspective of how you’ll save and spend differently. Include any other changes you want to make that will allow you to enjoy some tangible benefits over that six month time frame. Get that done first. The next four steps will give you some clarity about that narrative, which may end up meaning you have to put them in place in a different order.
2. Download a budgeting app. Take a few minutes to get any one of the many budgeting programs available for free. They’ll do a lot of the heavy lifting for you, so you don’t have to track all these things manually. Most people have heard about Mint.com, but there’s a lot of others out there too. A budgeting app makes it easier to identify exactly where your money is going. It’s important to know what you spend your money on because that knowledge is necessary for the next step, which is really the most important one.
3. Make an effort to save more each month. You need the budgeting app so you know how much you can actually save. If you haven’t saved at all and things are tight, making it difficult to put much money away, start with $10 per month. Wherever you are right now, when it comes to saving, try to increase it a little bit. Make increasing your savings one of the benefits you want to see six months from now.
4. Clean up anything you’re dealing with in the debt arena. A huge number of people have high credit card payments. These are usually the main obstacle keeping them from moving forward to where they want to be financially. If you struggle with high credit card interest and payments, there are many ways you can alleviate the negative effect they have on your finances. Refinancing a home loan, getting a personal loan, or consolidating all credit card debt into one loan are three options for reducing debt and freeing up cash. You can even try to get credit card debt lenders to reduce your interest expense. Paying less in interest every month will help you save more and adjust your budget to better meet your other needs.
5. Practice awareness spending. The goal here is to be fully aware of where your money is going. This is something you do once a week. Choose one day, preferably the same day each time, and take a couple of minutes to go over the spending tracked by your budgeting app. If you see that you’ve overspent somewhere, you can make a conscious course correction so that you reap the maximum benefits in six months.
It’s no different than making sure your crops are coming up right, pulling weeds, and eliminating opportunistic pests. Doing these things ensures you get a full harvest when the time comes. It’s much the same with finances—we reap what we sow. Start your financial house cleaning in the spring and it’ll help you have a great harvest in the fall. Until next time, enjoy.