As you leave winter behind, you get to look forward to warmer and longer days ahead. With spring approaching, you’re probably thinking of ways you can declutter around the house and get ready for the busy season ahead. Spring cleaning is not just for your home, it can also be for your finances. Much like clearing out old clothes and decluttering your “junk drawer,” financial spring cleaning can bring a sense of order and calmness to your overall well-being. In this article, I’ll share with you practical and actionable steps you can take to spring-clean your finances.
Organize Financial Documents
In today’s world, you’re probably receiving all sorts of different documents both in the mail and via email. To help organize your financial documents, consider keeping them all in one place. You could use a classic three-ring binder, or you could upload the documents to a secure cloud-based server. By keeping your important financial documents like your tax returns, bank statements, investment statements, and insurance policies all in one place, you’ll be able to easily locate them and have a home for your documents in the future.
Review Your Budget
Reviewing your budget at this time of the year can serve as a great checkpoint for you to see how well you’ve been following your budget. For many, spring and summer are more expensive times of the year. If that’s the case for you, now can be a good time to work any extra expenses you have into your budget so you’ll be ready for them later.
Evaluate Subscription Services
As you think about items you can clean out in your house, think about subscription services you can clean out as well. Most subscription services are set for automatic payment and can become quite costly over time. Review your past month’s transactions to see what subscription services you have and determine if they’re necessary or still being used.
Update Beneficiaries
For the accounts that allow you to name beneficiaries, review the beneficiaries you have listed to double-check it is still as you wish. If you got married, went through a divorce, or had a child, you may need to update your beneficiaries. Even if no changes are needed, it can be a sense of relief knowing that your assets will pass as you wish.
Reevaluate Your Emergency Fund
Determine, based on your current financial situation, if your emergency fund is adequately funded. If your expenses have increased or you’ve had to use some money from it, then develop a plan to replenish your emergency savings to get it back up to your desired amount.
Assess Your Debt
While reviewing your financial documents, you can also review your current debts. Having an understanding of what you owe and creating a repayment plan can give you clarity on a path forward to paying off your debt. For high-interest debt, consider consolidating it to get a lower interest rate and having one payment rather than keeping up with multiple.
Review Your Investment Portfolio
Meeting with your financial advisor or reviewing your portfolio yourself can aid in ensuring your investments are aligned with your goals. When reviewing your investment portfolio, you can look at how much you’re currently contributing and what types of accounts you’re contributing to. You can also look into how the investments in your account are currently allocated. The right asset allocation will depend on your individual goals. Over time your asset allocation may drift, and you might need to rebalance your portfolio back to its original asset mix.
Sell & Donate Unused Items
While cleaning out your old items, think about if any of them have value and would be worth reselling. To be intentional with the money from the sale, decide ahead of time how you’re going to use it. You can also consider donating items that cannot be resold.
Review Insurance Policies for Adequate Coverage
While cleaning up your finances this spring, review your insurance coverage on things like home, auto, boat, and life to see if you’re properly covered. If the value of these items increased, then it may be a sign that you need to update your coverage. You can also check to see if you can bundle your policies to potentially gain some cost savings.
Read Over Estate Documents
As you start to get things organized, read over your estate documents to make sure they’re still in good order. It’s also a good idea to share with a loved one where your estate documents are stored. If you have not completed estate documents, then this may be a good time for you to begin finding the right professional to help you through your legacy planning.
Reassess Financial Goals for 2024
Use this first quarter as a checkpoint to review your financial goals and see if you’re on track to reach them. This can also be a great time to schedule a date night with your spouse to check in with each other on the goals you have planned for this year.
As you begin your spring cleaning, take it one step at a time. Before you know it, you’ll be revamped and ready for the longer and warmer days ahead!
-by Jacob Young, AAMS®
Financial Advisor, RJFS
313 East 10th Avenue
Bowling Green, KY 42101
Phone: 270-846-2656
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of the author, and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Ben Smith Life Compass Financial is not a registered broker/dealer and is independent of Raymond James Financial Services, Inc. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.
