Do a spring cleaning of your wallet and finances

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As we approach spring, a lot of us are tempted to get into spring cleaning around the house. But have you done spring cleaning of your finances? That’s my assignment for you today.

I want you to block off some time, give this an hour. Then get out your monthly bills and look at each one. The goal is to reconsider those monthlies that we think are just automatics in our lives and see if there’s a way to get the dollar amount down. Focus on these key areas:

  • Take your technology bills like what you pay for a cell phone, landline, TV or Internet connection and go shop them. See what offers your existing providers have for new customers. See what their competitors are offering for new customers. You may look at your pay TV package, for example, and see you have channels you don’t watch. Maybe you can scale back your programming package.
  • Insurance is very dull, but it cuts money out of your wallet each month like a knife. What are you paying for auto insurance? Do you have the right coverage? When it comes for renewal, shop that policy. With homeowners’ insurance, what kind of deductible do you have? Do you know? Whatever it is, you want it to be higher. You want a high deductible for 2 reasons: Because if you make a claim, you’ll get canned and being too willy-nilly with making those claims can raise premiums in the future.
  • Take your credit card bills or your checking account statement and see where you’re spending your money. But don’t do it after a full meal. You might get indigestion! This is a real “mirror test,” where the idea is that if you look at yourself in the mirror as you’re eating, you’ll get grossed out and lose your appetite. It’s the same thing here. If you look at the money you’re spending, you may get upset. But being upset is not enough. You need to have an action plan to reduce your spending.

Editor’s note: This segment originally aired in March 2011.

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