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Spring clean your finances

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Guest blogger Leanne Salyzyn is an insolvency counsellor, licensed restructuring professional, and licensed insolvency trustee. Post a comment with your personal-finance questions.

As the weather starts to get a bit warmer, you might be thinking about raking your lawn of the winter’s debris or spring cleaning your home. It’s time to declutter and organize. While you are at it, why not take the time and spring clean your finances. Why do it? Like cleaning windows, organizing your finances can make things a lot clearer!

(1) File Your Income Tax Return
Although the 2015 income tax deadline has passed, it’s never too late to file your return. In fact, many don’t file a return simply because they think they missed the cut off. The Canada Revenue Agency will accept late filed returns. There could be unknown credits or refunds available to you. Couldn’t you use the money right now? And if you owe, ignorance is not bliss. It is better to know and make a plan to pay back taxes than to ignore the problem which may only escalate.

(2) Get a Clear Understanding of Your Credit Score
Don’t get caught off guard. Know what is reflected on your credit report. Often inaccurate information is reported and this can affect you getting the credit you require at a good interest rate. Do a credit check and make changes to it if necessary. Both Equifax and Trans Union (the two credit reporting agencies in Canada) offer credit checks on-line for a nominal fee.

(3) Tidy Up Investments
Take the time to organize, review and educate yourself about your investments. Did you make money or lose money on certain investments? Discuss and ask questions of your financial planner or advisor. Are these investments the best to meet my short term and long term goals? All to often we ignore our accounts and assume someone else has our best interests at heart. No one cares more about your financial goals than you!

(4) Organize Your Spending
Pull your bank statements and credit card statements for the past six months. Organize your spending into categories by using different color markers. Review where you spend and consider ways to cut back on unnecessary spending so that you may free up money for the things at matter the most to you.

(5) Prepare for the Unexpected
Most people plan for the best case scenario not the worst case scenario. Projecting your finances can help you see where your current savings and investment habits will take you. This will also give you clarity about future choices. Not enough people undertake this project. Most reply on credit to fund unexpected expenses. Make sure your financial plan has a built in cushion to help protect you in an emergency such as a job loss or major car repair. Grow a savings safety net now and make your future brighter.

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