The arrival of spring has brought warmer weather, longer days, a renewal of life … and the yearly desire to clean out and get organized. It’s also the perfect time to get your financial house in order. Here are some housekeeping tasks you can tackle to help make sure you and your money are headed the right way in the year ahead.
Update your budget. Blow the cobwebs off of last year’s budget and see if there have been any significant changes to your spending or saving habits in the last 12 months. If you’ve gotten a raise, consider upping your contributions to your 401(k) to set yourself up better for retirement. If your spending has gotten out of hand, look for ways to rein it in.
Check your credit report. You’re entitled to a free copy of your credit report every year from each of the three major credit reporting agencies. You can request a copy from each at annualcreditreport.com. Look for any errors or issues that could potentially drag down your score and address them.
Evaluate your retirement account performance. You may want to do this more often than once a year — but take this opportunity to see how your 401(k) is doing. Perhaps you can increase your contributions following a pay raise. Look at your allocations and see if they’re in need of rebalancing. And make sure you’re on track to meet your retirement and other savings goals.
Do a deep dive on your debt. Write down all your debts including mortgage, HELOCs, auto loans, student loans, and revolving lines of credit. List the balance for each account, along with the interest rate you’re currently paying. You may want to put more money toward the highest-rate debt to save the most money. Or, start with the smallest balance and work your way to the largest to get the psychological boost from paying individual debts off more quickly. And consider calling creditors to see if you can negotiate a lower rate or refinance.
Review insurance policies. Look over your auto insurance, homeowners or renter’s policy, life insurance, umbrella policy, health and disability insurance and any other coverage to make sure it’s still sufficient to meet your needs and to ensure that you’re receiving any discounts you’re entitled to.
Automate your bill payments. Using online banking to pay monthly bills has many advantages. You can save time, money (on postage), late fees and dings to your credit by avoiding late or missed payments. Set up recurring payments through your bank or with your various account holders. One more plus — less paper is kinder to the planet, too!
Meet with your financial advisor. It’s a good idea to meet with your advisor to review your personal balance sheet and check the progress on your retirement and other financial goals at least once a year. Come armed with questions and an open mind. If your financial status has changed significantly, consider more frequent check-ups.
Getting all the details about your finances out in the open can be a little intimidating. But remember, knowing where you stand is always the first step to getting where you ultimately want to go.
Sources:
https://www.consumerfinance.gov/about-us/blog/its-not-too-late-spring-clean-your-finances/
Perhaps you’ve lost a job, faced an illness or have been delt a family crisis that emptied out your emergency fund. What are your next steps?
You’re eyeing center-hall colonials in your neighborhood and dreaming about the garden you want to plant in the backyard and all the holiday celebrations you’ll host. You’ve saved toward this goal and think you’re ready to pull the trigger. But the real question is: How much house can I afford?
Or is it?
Social Security’s financial cliff is coming closer into view. Experts project that the fund that pays for government retirement benefits through FICA taxes will be depleted within the next 15 years.
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