Bruce Helmer and Peg Webb
As the days grow longer and the flowers begin to bloom, many of us feel the urge to open the windows, dust off forgotten corners, and breathe new life into our homes.
But what about our finances? Just like tidying up your living space, a thorough financial spring cleaning can eliminate inefficiencies, preserve your assets and align your money with your long-term goals.
Here’s a handy checklist to help you declutter your financial life and set yourself up for a more stable and successful future.
Digitize and organize your financial records
Before diving into budgets or investments, start by cleaning up the paperwork. Organized financial records save time, reduce stress and enhance security.
• Consolidate documents by gathering tax records, bank statements, credit reports, investment summaries, wills, insurance policies and loan documents. Eliminate outdated or duplicate paperwork that no longer serves a purpose.
• Go digital. Use secure cloud-based storage services like Google Drive, Dropbox, or encrypted USB drives. Make sure to enable multi-factor authentication for added protection.
• Establish a clear filing system, whether digital or physical, that categorizes your documents into banking, investments, taxes, legal matters and insurance.
• Set reminders for crucial deadlines — such as tax filing, insurance renewals and investment reviews — and back up your files regularly. A fireproof safe or a bank’s safe deposit box is a smart place to store key documents.
Streamline your budget
A budget is not a static plan — it should evolve with your goals and life changes.
• Reviewing your income and expenses. Compare last year’s spending patterns against your financial goals. Did you overspend in certain areas? Can you redirect funds to savings or investments?
• Trim the fat by canceling unused subscriptions and negotiating better deals on essentials like insurance or utilities. Also, leverage rewards programs and cashback offers wherever possible.
• Increase your savings and investments. If you can, aim to save at least 15% of your income. Automate transfers to your emergency fund, retirement accounts or brokerage accounts.
• If you’re carrying high-interest debt, explore refinancing or debt consolidation options. Use strategies like the avalanche (tackle highest interest first) or snowball method (smallest balance first) to speed up repayment.
• And don’t forget to adjust for inflation. Rising prices can sneakily derail your progress. Look for ways to reduce spending without sacrificing your goals. And regardless of your age, consider maintaining exposure to growth assets such as stocks.
Conduct an end-to-end financial review
A financial review is essential to ensure your strategy still fits your current life situation and the market environment.
• Check in on your investment portfolio. Is your asset allocation aligned with your risk tolerance and timeline? Rebalance if needed, and consider tax-loss harvesting to offset capital gains in taxable accounts.
• Pull your free annual credit report from AnnualCreditReport.com and correct any errors. A strong credit score (750 or higher) opens doors to better interest rates and financial products.
• Optimize your taxes by reviewing your withholding, maximizing contributions to tax-advantaged accounts such as IRAs or health savings accounts (HSAs), and exploring deductions or credits you may have missed.
• Revisit your estate planning documents. Make sure your will, power of attorney and trust documents are up to date — and confirm that beneficiary designations reflect your current wishes.
• If retirement is on the horizon (within 10 years), evaluate your readiness. Assess income sources, withdrawal strategies and the best time to claim Social Security.
Secure your financial information
With fraud and cybercrime on the rise, protecting your data is more important than ever.
• Strengthen your passwords and enable multi-factor authentication on all financial accounts. Monitor your accounts for suspicious activity by setting up alerts and reviewing statements regularly.
• If you’re not planning to open new lines of credit, consider freezing your credit with all three major bureaus — Experian, Equifax, and TransUnion — to block identity thieves.
• Be on guard for phishing scams. Never click on unknown links or respond to unverified messages claiming to be from your bank or insurer.
• Finally, review your insurance coverage. Make sure you’re adequately protected for home, auto, health, disability and long-term care. For broader protection, consider an umbrella policy.
Get in the habit
Spring cleaning your finances isn’t a one-and-done task — it’s an ongoing process that pays dividends in your future. By getting in the habit of organizing your records, updating your budget, reviewing your financial plan and securing your data, you’re investing in a more efficient, confident financial future.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.
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