March 20 marks the first day of spring, the time of year to clean up your clutter and embrace a fresh start. While the main goal of your spring cleaning might be to clean out your closet or clear out the garage, these aren’t the places to tidy up loose ends. One overlooked spring clean up category in your life is your bank account — and tidying up your finances could help you find money you never knew you had.
The Importance of Financial Spring Cleaning
Exploring the different ways your money can be better managed is the first step in renewing how you view your financial situation for the rest of the year. Just three months into 2014, executing a financial spring cleaning list is still possible for those who didn’t initiate a money-oriented New Year’s resolution, making spring the best time to get on the right track when it comes to spending, saving and reducing clutter.
5 Spring Cleaning Tips for Your Bank Account
If you’re too busy spring cleaning other areas of your life to discover cash you never realized you had, we’ve gathered up a few spring cleaning ideas specifically tailored to rejuvenating your banking.
1. Dust Off Service Contracts
When signing up for long-term services like auto insurance and cellular phone service, it can be easy to forget that the services you once needed two years ago, or even just last year, might not necessarily be what you need now. Cell phone plans are a commonly missed item on spring cleaning lists for individual plans as well as business phone plans.
Ben Luftman, a criminal defense attorney at Luftman, Heck & Associates, shared his success at re-evaluating his legal firm’s cell phone contract:
“I don’t believe a lot of people know about a shift in the industry to do away with minutes all together and go with what will eventually be data-only plans,” Luftman explained. “As an example, Verizon Wireless now offers unlimited minutes and the ability to share data between up to 10 phones and iPads. On our prior plan, we were sharing minutes among multiple people and we were able to save 40 percent per month by switching our plan.”
The same concept still stands with household family plans, especially if you have kids who’ve left the nest and can be omitted from the plan.
2. Review Errors on Statements
Leaving a paper trail is so ’90s, but the ease of online banking and automatic bill pay have made it all too easy to ignore account statements. In fact, you might have already been charged for a purchase or service you never even made. However, since you don’t stop to verify whether charges on a statement are correct, potentially hundreds of missing dollars could be lost.
3. Consolidate Credit Card Debt
Trying to keep track of multiple credit cards is a balancing act that is difficult to master for some. Don’t risk missing a payment and incurring a late fee; instead, consolidate credit card debt into a single account that offers low credit card rates, without transfer balance fees. Those with good credit will have an easier time finding this kind of credit card incentive, and might even strike gold this spring with added rewards programs tied to the account.
4. Dig Around for Lower Loan Interest Rates
Like the first idea on this spring cleaning list, reviewing your current loan agreement to assess your loan rate compared to other loan rate offers you’ve received can help you keep extra funds in your checking account this season. Perform some serious spring cleaning by refinancing your home loan or auto loan to save thousands in interest charges during the course of its term.
5. Have Your Savings Account Save for You
Another simple way to clean up your finances this year is to combine multiple savings accounts into one high-yield savings fund. This way, you actually see your savings account balance increase significantly, which helps motivate you to continue aspiring toward your financial goals.
An option to also take advantage of are unique savings tools offered by banks and credit unions. For example, Bank of America offers its Keep the Change program that rounds up checking account purchases to the nearest dollar. The extra change from each transaction then is automatically transferred to your Bank of America savings account.
Andrew M. Davis reveals his experience using a Keep the Change savings account. “I’ve been using Bank of America’s Keep the Change program since 2004. To date, I’ve saved about $1,300 — an average of $140 a year,” notes Davis. “I really like the program. Every little bit of saving helps and it happens without me even noticing. So, does it make a big dent? No. Does it help me save? Yes.”
While these recommendations are just a few ways to take on the financial spring cleaning challenge this month, doing one or all of these spring cleaning ideas will help you realize how much money you’ve been missing.
Photo credit: tanakawho via Wiki Commons