How to “Spring Clean” Your Finances

When spring is in the air, it’s natural to want to do a bit of cleaning or sprucing up in your life. Besides cleaning, sorting, and getting rid of unwanted items, it’s also essential to do a financial spring cleaning.After all, the more organized you are in your finances, the more likely you are to be on track with your goals.

In today’s blog, we’ll cover practical ways to clean out financial clutter, make adjustments, and start fresh with your finances.

Evaluate any Automated Expenses

Much like the dreaded “junk drawer” area of your home where you aren’t sure what you’ll unearth during a deep clean, your finances most likely contain many automated expenses worth reviewing.

Track down these expenses as thoroughly as you can. Some are necessary, and some may not be. Some items that could most likely use some reflection on their necessity include:

  • Streaming services (Netflix, Hulu, etc.)
  • Amazon Prime- the service itself and any goods you may have on a subscription (trash bags, soap, etc.)
  • Reading services such as Kindle, or a monthly subscription to your favorite newspaper
  • Car wash membership
  • Food items- meal prep delivery kits, treat boxes, wine, etc.
  • Clothing (Stitch Fix, Rent the Runway, etc.)
  • Beauty products (sample boxes, makeup, etc.)
  • Games or entertainment, video games
  • Pet products
  • Charitable donations

Determine which services add value to your life and which ones you could cut. If you’re not inspired yet, do a calculation of how much the expense adds up to yearly to really get a feel for its cost. While some may feel like they’re only $10 here or $15 there, you can be sure that those little amounts add up!

Some other automated expenses that are more of a necessary evil, so to speak, include things like:

  • Insurance premiums
  • Mortgage payments
  • Phone bill
  • Internet bill
  • Software services

That said, it’s still worth reviewing those types of expenses to ensure everything is being withdrawn correctly and to determine if any changes are in order.

For example, did your phone carrier switch to your newer, cheaper plan when they said they would? Can you get a better deal on a software suite? Questions like these will keep you on top of your expenses and wallet fatter.

Review Your Estate Plan

Another aspect of your finances to review in your spring cleaning is your financial plans for the future. It seems far away now, but retirement or whatever your next chapter holds can creep up on you faster than you’d think! Plus, any good plan should also have the flexibility to make necessary changes.

Take, for instance, your estate plan. Your estate plan contains the legal documents that determine what will happen to your money when you die, or should you become unable to manage it.

There are several reasons for revisiting this plan, and they’re all tied together by the fact that, put simply, life changes. You may have added new members to your family through birth or marriage, gotten divorced, moved, changed jobs, received an inheritance, or any other major life events.

All of these events have the potential to affect your estate plan, so dust it off and make any necessary revisions to ensure that it will still serve you best in the future.

Check-in On Your Financial Goals

This brings us to our final item of financial spring cleaning; checking in on your financial goals. It’s easy to let financial goals fall by the wayside. They might seem so “big picture” that we forget about them, or they become out of sight, out of mind, and we lose track of where we’re at with them.

Instead, make it a practice every so often to sit down and look at actual numbers, spreadsheets, and documents. It’s also wise to sit down with your financial advisor to get concrete about what you’ve accomplished and still have yet to achieve.

This practice applies especially to those who are nearing retirement. You’ll want to look at what you’re contributing to your accounts and what adjustments are needed. For example, you may want to max out your 401k or convert contributions to a Traditional IRA to a Roth account as part of your broader tax strategy. Consult with your advisor to see where you need to be to retire comfortably.

Help from the Pros

Financial spring cleaning can help you shake off bad financial habits and make room for better ones. It’s a great check-in point for your goals.

We’re here to help you make sense of whatever shape you find your finances in and re-align for the future. Contact us today to get started!