I always get a little stir crazy at the beginning of spring. After making it through another Michigan winter, I can’t wait for the sunshine and warm weather right around the corner. It’s time to shake off winter and welcome spring for the fresh start that it is. Spring cleaning is definitely on my agenda, but that won’t just involve cleaning out the basement and the garage. Okay, I can’t lie: my husband will probably take care of that stuff anyway. My plan for this year’s spring cleaning is to really focus on tidying my finances. Care to join me? Here are a few tips for “cleaning up” your finances this spring. #1: Know the Score One of the most important aspects of your finances is your credit report. Your credit score and credit history can be major factors in whether or not you qualify for everything from jobs to loans to apartment rentals, and they often determine the rates you’ll receive on things like mortgages and auto insurance. It’s a good idea to check your credit report on a regular basis and be aware of its contents. You can receive a free credit report from each of the three major credit bureaus (Experian, TransUnion, and Equifax) once a year at www.annualcreditreport.com. These free credit reports will not include your credit score, but they will give you a comprehensive picture of the factors currently impacting your score. There are free credit score estimators available online, but if you’d like to find out the actual credit score used by lenders — typically your FICO credit score — you’ll probably have to pay for this service. Review your credit reports and be sure everything listed there is accurate. If you notice any errors, contact the credit bureaus to file a dispute. If there are derogatory accounts or negative history on your credit report, contact your creditors directly to see if you can make arrangements to get your accounts back in order. I also recommend working with a nonprofit credit counseling agency to develop a plan to get your credit on track. #2: Check Your Rates Do you know the interest rates on your credit cards and loans? If you haven’t evaluated your debt lately, now is the perfect time to do so. Interest rates are very low right now, and you could potentially save hundreds — even thousands — of dollars by refinancing your higher-rate debt. Be sure to check out the rates and terms for your credit cards, home loans, auto loans and student loans. Basically, if you have a loan, give it the once over. Contact your creditors to see if you qualify for refinancing at lower rates. You might be surprised by how something as little as a 1 percent reduction in your loan rate can save you a significant amount of money over time. #3: Start Saving Yes, interest rates on savings accounts are low right now, but that’s no reason to avoid saving money. If you don’t already have a savings plan in place, start now! Setting aside money for things like retirement, college expenses and home projects can allow you to reach your goals without taking on unnecessary debt. Identify your savings goals: for what purposes do you want to save money, and how much money do you ultimately want to save up? Make saving easier by establishing an automatic transfer that deposits a set amount of money to your savings account on the same day every month or on each payday. A great initial goal is to begin with an automatic transfer of as little as 1 percent of your paycheck or $25-$50 every month. Try to approach your savings plan like you would pay your bills — treat saving money as if it’s a mandatory part of your monthly budget. If you don’t already have a long-term savings plan in place for retirement, such as a 401(k) or IRA, now’s the time to get this started. Check with your employer and financial institution to find out more about the options available to you. As you organize your closet and clean out your car this spring, don’t forget to tidy up your finances while you’re at it. Take advantage of online financial resources and calculators to help you set financial goals, talk with a representative from your financial institution, and consider meeting with a financial advisor to find out your best options for getting and keeping your finances on the right track. April Clobes Executive Vice President and Chief Operating Officer MSU Federal Credit Union 3777 West Road East Lansing, MI 48823 email@example.com 517-333-2254
April Clobes is Executive Vice President/Chief Operating Officer for MSU Federal Credit Union in East Lansing. She can be contacted by e-mail or by calling (517) 333-2254.