If summer is a season of spontaneity and indulgence, fall offers a counterpoint: it’s a chance to get back on track and on budget.
“Summer, with traveling and no school, is usually a very expensive time. Fall is a nice reset,” says Ashley Feinstein Gerstley, a certified financial planner and author of “The 30-Day Money Cleanse.”
Gerstley says giving yourself a “money cleanse” provides an opportunity to carefully examine your spending and financial habits so you can make the necessary changes to finish the year strong. With inflation and economic uncertainty in the background, this is no easy task, but making extra efforts now may be worth it.
Here’s a step-by-step guide to a fall financial cleanse that can help you get your budget on track for the rest of the year:
Start with a look back
Nate Hoskin, a CFP and financial assistant at Brightside, an employee financial wellness provider, says the first step to a fall financial cleanse is to look back, starting with your New Year’s goals. He suggests monitoring progress toward the resolutions adopted in January so you can make any necessary adjustments.
Then, Hoskin says, start what he calls a “financial audit,” which involves tracking all your expenses over the past few months by examining your credit card and bank statements. From there you can see what unexpected expenses occurred or why it was so difficult to save. “With inflation that is quite a challenge. Your budget may not work out even if you have done everything right, because some things are out of your control,” he adds.
He suggests giving yourself the opportunity to make small changes in the future, without dwelling on past missteps.
“Knowing where our money goes is a huge game changer and can help us change our habits,” says Gerstley.
Try a budget
If you’re not already following a budget to track your spending, fall is a good time to give it a try, says Ashley Lapato, a financial expert on TikTok who posts as @TheOrganizedWallet and is a spokesperson for budgeting. app YNAB.
“I always think the first step is zero budgeting,” she says, meaning every dollar is accounted for, including the money set aside for savings and any debt payments.
“It forces you to confront spending decisions and get very clear about financial priorities,” she says, because you’re sifting through every little bit of spending.
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Create a new morning habit
Lapato likes to start every day with a quick check of her own budget. Every morning, she spends less than five minutes logging into her budgeting app or checking her bank account and financial goals.
“Doing this has changed my perspective. It puts me right-brained in the morning when I look at bills, goals, and things I want to accomplish,” she says. When she has to make spending decisions later in the day, her balances and goals are most important.
Make paying off debt a priority
Stuart Boxenbaum, president of Statewide Financial Group, a financial advisory firm, says that with interest rates rising, this fall is also a good time to aggressively pay down high-interest or variable-rate debt, such as credit card debt.
“Before you put other money into savings, you have to pay off debts with high interest. If you pay 18% or more on a credit card, it’s a no-brainer. Pay off the debt first,” he says, because yields on savings accounts are much lower than those interest rates.
More: The growing ‘debt gap’ in the US is helping some move forward, while others are falling further behind
Check your tax situation
A cash cleanse should also include a tax audit, says Karla Dennis, a registered tax agent and founder of Karla Dennis and Associates, a tax and accounting firm. “You could go all year and assume your withholdings are up to par, but you could end up short,” she says, which would mean a surprise tax bill in April if too little taxes come out of your paycheck .
To avoid that fate, she suggests using the IRS’s tax withholding estimator. Enter your personal information and get an estimate of the amount you need to withhold so you can make the necessary adjustments for the remaining months of the year. If you recently got married, got a raise, or started earning extra money through a side hustle, estimating your withholding is especially important, Dennis adds, because you run a greater risk of withholding too little.
To see: Household incomes increased in only five states last year. Is your state one of them?
Make room for fun too
Budgeting, debt, and taxes aren’t exactly words people associate with fun. That’s why it’s so important to include treats in your budget, Lapato says, because it can actually keep you on track. “Sometimes we need that serotonin boost,” she says. For her, that usually means publishing a new blush or a new book.
“Instead of feeling guilty, I built it into my budget as its own category,” she says, adding that she sets aside a little money for this every month. “Give yourself permission to enjoy life,” she adds—a philosophy that applies this fall and beyond.
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Kimberly Palmer writes for NerdWallet. Email: kpalmer@nerdwallet.com. Twitter: @kimberlypalmer.