It has been a long winter, and the last thing anyone wants to think about is spring cleaning; however, an annual deep clean of your house is a chance to start fresh, get organized and get back on track.
The same is true for your “financial house.” By taking this time once a year to review your financial well-being and creating clean and organized finances, you may be able to gain confidence while freeing up more time to enjoy the warm spring weather just around the corner.
Use the following S-P-R-I-N-G acronym to get motivated as you review components of your “financial house.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of Kiplinger’s expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of Kiplinger’s expert advice - straight to your e-mail.
S—Shred old financial documents.
Keep your tax returns, canceled checks, and any records that support tax deductions for auditing purposes. But, it may be time to get rid of those old pay stubs, financial records and documents that you’ve been saving for years. The IRS recommends keeping tax documents anywhere from three to seven years depending on your specific tax situation. Visit www.irs.gov (opens in new tab) to learn more and determine how long you should retain your tax documents. And remember, it’s important to shred, not throw away old financial documents to help protect your identity.
P—Prioritize your expenses.
Review your savings goals and spending habits. If you have never tracked your spending or set a budget, you may be surprised at how much small purchases add up. Consider using online resources to establish a budget and provide personalized financial reminders. These sites also provide expenditure comparisons, such as the average cost of auto insurance, to help identify additional savings opportunities.
R—Review your estate plan.
Creating an estate plan is a way to efficiently pass on assets to your loved ones and to help avoid the stress and cost of probate after you pass away. If you already have an estate plan, do an annual review to make sure designations are all still current. If a major life event has occurred ,— such as marriage, divorce, birth or death — since the last time you updated your estate documents, take action and meet with a qualified attorney to help you make the necessary revisions.
I—Investigate your insurance coverage.
Now is a great time to review all of your current insurance policies to make sure you’re still paying the best rates and have the appropriate amount of coverage. This review includes home, vehicle, health, long-term care, life insurance and more. If you have had a policy in place for a number of years, there may be enhanced benefits or better rates available in the marketplace than in years past. Consider bundling policies and shopping rates to find the best deal for you.
N—Negotiate your rates.
Every year, make it a priority to look at your outstanding debts and the interest rates you’re paying. Compare rates so that you have a realistic expectation of a possible rate reduction. If your rates are on the high side, contact the loan provider or credit card company and start negotiating a lower rate.
G—Go over your retirement plan.
If you already have a retirement savings account, review the plan and consider contributing the maximum amount possible or, at a minimum, taking advantage of any employer-matching programs available to you. If you do not have a retirement savings account through work or want to contribute even more, consider opening an individual IRA or a Roth IRA as a way to save for retirement.
Remember, your finances should be top-of-mind all year long; but take some extra time this spring to review your progress and get your financial house in order. If you are feeling unsure about your retirement, be sure to consult a qualified financial professional.
Steve Post contributed to this article.
-
-
Stock Market Today: Stocks Stabilize After Jobs Report Jolt
The November jobs report blew past expectations, sending the markets sharply lower at the open.
-
Amazon vs. Walmart: Who Has the Cheaper Grocery Prices?
A study finds Amazon handily beat Walmart for the lowest prices on food and consumables. In other categories, things tightened up.
-
Doing Your Retirement Income Planning in the Right Order Matters
A strong retirement income strategy considers many factors, including the retiree’s unique financial resources and needs. How and when you tackle them is critical.
-
How Parents Can Teach Their Kids About Cryptocurrency
Starting with explaining the concept of money to begin with can help them grasp the concept of digital currencies.
-
How Do You Overcome Stage Fright? These 6 Tips Can Help
Many people fear public speaking more than they fear death, yet advancing professionally could depend on whether you make a good impression when you step up to the microphone.
-
2 Ways Retirees Can Defuse a Tax Bomb (It’s Not Too Late!)
If you’re retired and find yourself sitting on a “tax bomb,” you may think there’s nothing you can do. But two strategies could seriously reduce your taxes in retirement.
-
5 Trends in High-Net-Worth Philanthropy
Wealthy families and organizations are giving more to charity but also targeting funding to fewer grants in their efforts to create bigger impacts.
-
6 Ways a DAF Can Make Your Year-End Giving Better Than Ever
Giving appreciated assets instead of cash could be the most tax-smart move you can make with a donor-advised fund, but wait, there's more…
-
Life Insurance Strategies to Consider When You Own a Family Business
Not only can life insurance replace lost income, but it can help with estate taxes and provide a sense of fairness for family members who don’t participate in the business.
-
Short-Term Investments to Protect Against Inflation and Market Volatility
Rates on Series I savings bonds, T-bills and fixed annuities are all above historical averages and could serve investors well during turbulent times like these.
