Declutter During the first half of the year your bills got thrown into piles, your pay stubs were shoved into a desk drawer, and your tax paperwork was strewn across your desk. Start by collecting everything so it’s all in one place. Then walk away. Why? Because that’s step one, and this task is often too overwhelming to tackle all at once. After some time has passed and you’re ready to tackle the next step, sit down and categorize all the papers. It helps if you design a system for each category. For example, if it’s bank or bill related and the information can be found online, then shred the paper copy. If it’s a tax record, legal document or warranty, put it in a file.
Purge Think about when you clean your refrigerator: When you come across something questionable, you toss it. Pulling out a rotten tomato isn’t enjoyable, but the financial equivalent is more fun because it puts money in your pocket. So, dump the rotten tomatoes from your budget. Are you still watching HBO, or did your favorite show end in the fall? If it did, cancel until next season. Ditto for the gym — most will let you put your membership on hold, and it’s prime season to run outside. How about bundling your auto and homeowners insurance? Are you using all of your cell phone minutes, or could you downsize to a cheaper plan? If you perform this exercise carefully and correctly, your monthly savings could be significant.
Polish This is a good time to shine up your credit. You’re entitled to three free copies of your credit report a year — one from each major credit bureau — and spreading them out every four months is a good way to stay on top of your credit scores. The report will show you where you stand and tell you what you need to do to give your report a good scrubbing. One quick action: Pay down high-interest-rate debt, which is costing you money and, depending on your credit limit, could be costing you valuable credit score points.
Sweep Review all your bank accounts and sweep any extra cash you have into your savings account. Continue this trend each month throughout the year with an automatic transfer. If your tax refund or annual bonus is still sitting in your checking account, move it to your savings to avoid the temptation of spending it.