Spring: the season of growth and revival. After a long, cold winter, nothing feels better than cleaning up and getting organized. It’s the perfect juncture, nestled between the beginning of the year and summertime, to make changes to your current routine and establish new habits that are a better fit for your future by not only refreshing your home, but revamping your finances as well.
- Review and Consolidate Accounts
First up, take an inventory of all of your accounts. Be sure to consider bank accounts, credit cards, retirement accounts, other investment accounts, cryptocurrency wallets, health or flexible savings accounts, student loans, reward programs, and any other debts or investments. This may also be a good time to pull your annual credit report. You can review your credit report once annually without it having a negative effect on your credit score and it’s also a good way to see a full inventory of every account attached to your social security number. Look for opportunities to consolidate or close accounts as you’re looking through the list. For instance, if you have multiple bank accounts but one sits empty, it may be a good time to close the account unless you have plans to use it in the near future. Of course, you also want to be sure there aren’t any accounts on your report that you don’t recognize.
If you have funds in a former employer’s retirement plan, it may be worthwhile to consolidate and roll it into either an IRA or your current employer’s retirement plan but be sure to confirm that the fees and investment options are in your best interest before proceeding. On a similar note, consider if you could be receiving a better interest rate for either debts or investments. You may be able to transfer credit card debt to another card with a low interest introductory offer or your savings could be transferred from a traditional account to a high-yield savings account. Minimalism can be a beneficial approach; only maintain accounts that you truly need and have direct access to. But don’t necessarily close a credit account because doing so can potentially lower your credit score due to impacting your debt-to-credit ratio.
- Organize Your Important Documents
Regardless of if you prefer paper statements or electronic-only document delivery, there’s a decent chance you’ll continue receiving important documentation via the mail from one company or another. This can lead to an accumulation of financial documents, oftentimes with private information on them. Channel the reinvigorating springtime energy into browsing through any piles of paper or mail that have been growing around your home and determine what you need to save, toss, or shred. If a document has any Personal Identifiable Information (PII) listed on it, such as an account number, signature, or any part of your Social Security Number or a credit card number, be sure to shred it so that it doesn’t end up in the wrong hands after you deem it to be garbage. On the other hand, it’s a good idea to maintain a physical record of items such as estate planning documents, legal agreements, your will, insurance policies, real estate ownership documents, medical records, etc. Preferably keep these documents in both paper form in a safe location and as a secured digital copy too, such as stored in a password-protected electronic vault or folder. If you’re not sure where to start with saving your paper forms as digital copies, ask your trusted professionals as they may provide an option for this along with their services.
- Review Your Financial Goals
It’s no secret that time brings change, even a few months can make a big difference when it comes to your goals and plans. There’s no time like the present to pause and consider if the financial targets you set in the past are still relevant. You could consider any aspect of your life that correlates to your finances, whether that’s choosing a preferred retirement age, buying or selling property or a company, finding a new job, paying for your child’s college education, or saving for an exciting vacation. If you’re looking for direction on what you’d like to accomplish or the lifestyle you want to live, consider what experiences are most meaningful to you and what you personally value.
If your current spending supports the future you’re striving towards, wonderful, keep going! If it doesn’t, take stock of what you need to change in order to reach the intentions you’ve set for yourself and your family. Perhaps that means creating or editing a budget, diversifying your investments, scrutinizing where you’re shopping and if there are better options, cancelling subscriptions or services that aren’t necessary, or even something as serious as exploring changing careers.
As the flowers bloom around us and trees come back to life, we hope this list has inspires you to do some weeding in your financial garden. There are so many ways to get organized when it comes to your finances, consider what changes and habits would be most helpful to you going forward. Whether you need to take stock of the various accounts floating around with your name on them, tackle the collection of documents in your office, or rejuvenate your financial goals, you’re sure to feel renewed after a spring cleaning. If you have any questions or don’t know what to prioritize, professionals like a CERTIFIED FINANCIAL PLANNER™ can help guide you.
