If you’re feeling financially disorganized, making a few key moves can help you restore order and take charge of your money. You’ll learn to live within a budget, pay down debt, and start saving so you can work toward a successful financial future.
Here’s what you need to do to clean up your finances.
Ways to Clean Up Your Finances
1. Look at the Big Picture
The first step is to look at your entire financial situation. Review your bank statements, credit card statements, bills, and paychecks. It might feel a little overwhelming at first, but seeing your income and debt all at once, and comparing the two, can help you understand exactly what you own and what you owe.
Make the process easier with a money management tool that can help you track your accounts in one place.
2. Set a Practical Budget
Setting a budget can be a great way to organize your spending and saving. One way to do it is by using the 50/30/20 method. This process can help simplify your money by dividing it into three categories.
To start, 50% of your income goes to necessities, such as housing, utilities, groceries, and other essential bills. Next, 30% is for discretionary spending, like entertainment or eating out. The remaining 20% is for your financial goals, such as savings and retirement.
As a final step in the budgeting process, take a look at your savings account. You may want to consider opening a high-yield online bank account where your money could earn more for you.
3. Make Payments On-Time
One surefire way to make sure your bills are paid by the due date is to automate your finances by setting up autopay. Since payment history affects approximately 35% of your FICO® score, consistent on-time payments could potentially benefit your score.
Plus, many financial institutions may offer a discount for setting up automatic payments. You can also go paperless and get notifications delivered straight to your email inbox.
4. Cancel Unused Subscriptions
As you’re evaluating your spending habits and budget, be sure to look for subscription services you can cancel.
Whether it’s an unused Netflix subscription or an underused gym membership, canceling what you don’t use could save you a substantial sum over the course of a year.
Get up to $300 when you bank with SoFi.
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5. Make a Plan for Your Debt
If you’re working on paying off multiple loans, you could explore the idea of consolidating your debt with a personal loan. If you have debt built up across multiple credit cards, for example, the different interest rates and due dates can lead to confusion and missed payments.
One possibility to help simplify things is a debt consolidation loan. You could choose a new repayment term, possibly with a lower interest rate, if you qualify.
If you have private student loans to repay, you might also want to consider refinancing your student loans. You may be able to get a lower interest rate that could help you save money. Evaluate the options to see what might work for you and what you can qualify for.
6. Review Your Current Investments
If you’ve had multiple jobs, you may want to consolidate your investment accounts, too. Having several 401(k) accounts from past jobs could be tough to keep track of and might not help you make the most of your money in the long run.
Rolling over your old 401(k) accounts and combining them into one IRA account, for example, could be one option to consider.
You can also check with your current employer to see if you can roll over your previous accounts to your new plan. Be sure to compare the different investment choices of each account to make an informed decision.
7. Commit to Regular Maintenance
Streamlining your finances in the present is just the first step. From now on, commit to doing a regular financial checkup. Review your finances monthly, and adjust your budget and financial strategies as needed.
8. Stay on Top of Your Credit Report
While you’re at it, check your credit report and review it to make sure it’s correct. If you spot any errors, notify the credit bureaus. You can get a free copy of your report from AnnualCreditReport.com.
In addition, you may be able to check your credit score for free through your credit card or bank. You can see how your score changes over time and what may be impacting it the most. Then you’ll know what you need to work on to strengthen your score.
9. Review Insurance Policies
If you have life insurance policies or other benefits with beneficiaries, review those designations at least once a year. With big life changes, you’ll want to make sure your beneficiaries are up to date.
If you get married or remarried and change your name (or your spouse’s name changes), you’ll need to add that information to the policies as well.
10. Update Your Tax Withholding
Take a look at your most recent tax return. Did you end up with a big refund? Or maybe you owed way more than you planned for. Your withholding may be too much or not enough.
Discuss your withholding information with a tax professional to make sure you’re having the correct amount taken out of your paychecks for taxes.
The goal is to free up more of your money month to month as you earn it so you can put it toward savings or paying off debt.
11. Maximize Account Benefits
Finally, as part of your financial cleanup, you should review the benefits and features of your bank accounts and see if a new account might benefit you more.
If you’re thinking about a high-yield savings account, for instance, check out SoFi Checking and Savings. You’ll earn a competitive APY, pay no account fees, and there’s no minimum balance.
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SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
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