Springtime is almost here! Spring brings a sense of renewal and optimism after the long dreary winter months. As the warmer weather moves in, we tend to find ourselves feeling more motivated, ready to clear out the old and bring in the new! Spring cleaning is a popular tradition for many, as it provides a chance to clear out any stagnant clutter and stale air. We kick off the season with scrubbing, organizing, and decluttering all of the physical aspects of our home and lives.
This year, in addition to tidying up your home and other physical aspects of your life, why not do the same for your finances? Financial spring cleaning allows the opportunity to refresh and renew your current financial picture. After all, no one wants their financial picture to resemble that bottomless junk drawer or disorganized garage that was never cleaned up!
Here are some suggestions to get you started on your financial spring cleaning this year:
De-clutter your Finances
Many of us find ourselves drowned in endless piles of paper, as it can be difficult to find time to organize financial records. Take time to sort through any growing piles of paperwork. Shred documents that you no longer need, either because they are outdated or because you are receiving duplicate electronic copies. If you are not currently enrolled in e-delivery for financial documents from your investments, banks, and creditors, consider doing so. This can reduce the clutter that most of us dread from piling up. Also, consider signing up for automated bill pay services and investment purchases. This ”set it and forget it” approach will help you reduce your monthly financial workload and ensure you never miss a payment or contribution.
Revisit Financial New Years Resolutions
Most of us set resolutions at the beginning of the year. Now is a good time to check in with them. Examine your progress on any debt-reducing or savings goals you established. If you are meeting these goals, great! If you are not progressing as anticipated, look for ways to get back on track for the remainder of the year. It’s not too late to adjust these goals to something more attainable in your particular situation if you are having trouble meeting them.
Analyze Your Budget
Creating and sticking to a budget is a crucial element in anyone’s financial picture. If you have previously established a budget, make sure you are following it monthly. If it needs some tweaking, now is the time to reanalyze your income and expenses and find something that works. There are several free tools available online, such as Mint and BudgetTracker, to assist you in implementing and maintaining your budget. Consider utilizing one of these tools to create an initial budget, track income, and categorize expenses so you can easily analyze where your money is going.
Review Insurance Policies
Dig out your insurance policies and check over them to ensure they still are suitable. Is your coverage on your home and automobiles still adequate? Have any life changes happened that warrant additional life insurance? Have you switched jobs and need to re-evaluate group benefits? Ask yourself these questions and address any action items if necessary. Also now is a good time to look at your rates. Some policies like home and automobile insurance have rate changes rather frequently, and we may not notice the changes until we take the time to sit down and examine premiums and coverage. Reach out to your agent(s) to review your policies, discuss any potential ways to reduce rates, or add additional coverage in areas you may need it. In regards to life insurance, review your current beneficiaries and make sure the information is still accurate, or make any changes as needed. Also, review your coverage amounts to verify they are still appropriate for your situation. If you have been promoted, received a significant raise, or are no longer covered by a retirement plan then you may need to increase your coverage.
Check on your Credit Score
In general, it is a good idea to check your credit report every year or so. First, check for inaccuracies. Finding information that does not pertain to you can be a sign that your credit is mixed up with someone else’s, or can indicate identity theft. If you find inaccuracies, be sure to investigate them and clear them up to avoid future issues. Also, outdated information can hurt your score, so ensure your creditors have all balances up to date and are reporting payments correctly. Fixing these types of issues can have a significant impact on your overall score. Lastly, look for any ways to optimize your credit by reducing balances on loans and credit cards. Keeping your debt to credit ratio below 30% is suggested to keep your credit score healthy, and anything better than 30% will only improve your overall score further.
Written by Kristin Prieur
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