Spring clean your finances

When it comes to spring cleaning, you probably haul the junk out of your garage, scrub your fridge, and wash the rugs and drapes. But don’t forget about your personal finances. Just after tax season is the perfect time to perform an annual evaluation and tidying up of your budget, bank accounts, debts, and investments.

Evaluate your debt load. How much do you owe, and how much are you paying the lenders in interest? Comparison shop what you’re paying in interest with what’s available now, and consider refinancing your mortgage or asking your credit card company for a lower interest rate. If you want to take advantage of the 0% balance transfer offers that are all over the place, make sure you’ll be able to pay off the transferred balance in full before the promotional period expires — and resist the temptation to run up new debt on the old card.

Chip away at that debt. The question has always been whether you should you start paying off the balance with the highest interest or knock out the smallest bills first. Although starting with the highest interest rate makes the most sense mathematically, researchers found that people are more motivated to continue with a debt-reduction plan if they knock out a small debt in its entirety rather than merely a chunk of a bigger one.

Update your budget. If you’ve undergone a major job-related change like getting a big promotion or switching from two incomes to one, revisit your household budget. If you’d like to have one partner stay home with a child or go back to school full-time, the best way to adjust to being a single-breadwinner family is to start living like one six months beforehand. This will expose any weak spots in your budget or expenses you’ve overlooked. It will give you a nice addition to your savings cushion, as well.

Tally up your rewards. Credit card points, airline frequent flyer miles — many of these rewards have expiration dates. Go through your various loyalty club memberships, so you can use your rewards before you lose them. If you have to pay a fee to participate (through a credit card’s annual fee, for example), calculate whether the value of the rewards offsets that amount.