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6 Easy Ways to Clean Up Your Finances for the New Year

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6 Easy Ways to Clean Up Your Finances for the New Year


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Taking stock of your finances at the end of the year is always a smart move, but it can feel overwhelming—which makes it all too easy to put off. If a full postmortem of your 2021 budget is just too much right now, here a few quick ways to get started.

Confirm your contact information

Let’s start with the easiest possible task: If you moved in 2021, make sure your financial institutions and employer have your new address. The last thing you want is to miss an important piece of mail and screw up your 2021 taxes—so it can’t hurt to double-check.

Audit your subscriptions and automatic payments

Recurring monthly payments can really add up over time, so go through your subscriptions and ask yourself what you truly need and what you can do without. Even if you only find one or two nix-worthy line items, you’ll still free up some funds for other uses, and that’s always a good thing.

Repeat this process for any automatic payments and transfers, especially your internet and/or cable bill. You can often get a lower rate just by threatening to cancel service, and if you’ve already done that, it still pays to double-check that your monthly bill is what it should be. Cable companies don’t always follow through on their promises to lower rates, and autopay makes billing mistakes easy to miss.

Update your banking passwords

Data leaks happen all the time, and if there’s one piece of personal data you really don’t want compromised, it’s your banking login. Start the new year with a fresh set of passwords for all your financial accounts, ideally with the help of a password manager. If you don’t already have one, you really should: Not only do password managers make it easy to keep track of all your logins, they also encrypt your data to protect against leaks and hacks and enable you to securely share account access with people who need it. Lots of companies offer discounted subscriptions this time of year, too, so you might even be able to get a great deal.

Clear out payment app balances

If you use Venmo, Cash App, PayPal, or other payment apps, check to see if you’re carrying a balance. Most people are—which means you’ll probably find some free money in there. If you do, you can transfer it to a high-yield savings account, use it to pay off your credit card debt, send it to a local mutual aid fund, or just pocket it for a rainy day.

Check in on your savings and debt payoff goals

Whether you’re saving for retirement, paying down debt, or both, it’s a good idea to take stock of your progress this year. Did you meet your goals? If not, what adjustments do you need to make for 2022?

Don’t forget to consider factors beyond your own habits, too—namely, interest rate changes. In 2019, high-yield savings accounts offered a maximum of around 2% APY; due to the coronavirus pandemic, that number has fallen to 0.40%-0.60% APY, and the Federal Reserve doesn’t expect it to increase before 2023. Meanwhile, credit card interest rates increased by nearly two percentage points in the last two quarters alone, because of course they did. If the interest rates on any of your accounts have changed significantly this year, it’s worth shopping around to see if you can get a better deal elsewhere.

Gear up for tax season

As another December draws to a close, it can only mean one thing: Tax season is coming. Getting your tax documents in order now (and touching base with your accountant, if you have one) will save you time and effort down the line.

Unless the IRS postpones Tax Day for the third year in a row, the 2021 filing deadline is April 15, 2022. This is also the deadline for making tax-deductible IRA contributions, even if you file an extension—so don’t procrastinate on your contributions for too long.

If there’s one thing to keep in mind here, it’s that cleaning up your finances doesn’t have to be a long, drawn-out process. Most of these tasks take just a few minutes to complete. Pick one or two to start with, get them taken care of, and go from there. You’ll start 2022 in a much better place.

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