Spring Cleaning Your Finances
By Carina Diamond, CFP®

Spring has finally sprung and there’s no better time to do some cleaning up – of your finances.

Throughout the year, it can be easy to become distracted and allow your financial plan to veer off in an unanticipated direction. There’s no time like the present to clear the dust and make sure the plan still makes sense for you and your family.

When you’re ready to de-clutter and reorganize your finances, below are a few tips to get started.

  • Check your credit report – Getting into the habit of checking your credit report at least once a year can be tough, but it’s necessary to make sure your credit score is in good standing and that there are no errors on the report itself. Take some time to review your credit report to make sure there are no inaccuracies, and immediately flag any if there are. A government website – www.annualcreditreport.com – offers free annual credit reports, so there’s no excuse for not knowing your credit history.

  • Review your cash flow – When is the last time you evaluated the money coming in and more importantly, going out? Are you in a relationship where your finances are being shared, or are you covering your financial obligations by yourself? The turn of a new season is a prime opportunity to take a step back and make sure all expenses are being considered, and that you’re still allocating enough to your savings, retirement, and “rainy day” accounts while leaving yourself some spending flexibility. Saving for a new home or summer vacation? Tweak your budget so it reflects how much you’ll need to save for those expenses.

  • Ramp up your retirement - Currently, 80 percent of Americans have no idea how much money they’ll need in retirement.* If you’re feeling this way, it might be time to reevaluate your contribution to your retirement account. After you’ve taken a close look at your cash flow, you’ll likely find some extra money to allocate towards your retirement account.

  • Rebalance your investment accounts – Similar to your retirement accounts, consider a spring time review of your portfolio to ensure that your allocation is at your desired levels. You can then make adjustments if necessary.

  • Shred it – There’s nothing quite as satisfying as clearing out excess paperwork. As you go through your finances, create digital copies of all important documents (and back up to your external hard drive!) and feed those papers to the shredder. Clearing your desk of piles will be good for both you and your finances.

Just like the fresh air this season brings, you can bring a sense of freshness to your finances. A CERTIFIED FINANCIAL PLANNER™ professional can also help you identify areas of improvement and keep you on track to meet your financial goals.

* Source: Age Wave/Merrill Lynch, “Finances in Retirement: New Challenges, New Solutions,” 2017.

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