9 Tips to Bring New Life to Your Finances
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Spring Has Sprung: 9 Tips to Bring New Life to Your Finances

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When spring is in the air, it’s time to put away those winter sweaters and pull out your summery shorts. It’s also a great time to clean your financial house, casting aside old habits and starting new ones.

So, as flowers begin to bloom and birds return to their nests, give yourself a fresh financial start, too. Here are nine ways to clear the cobwebs from your wallet and get your financial plan neat and tidy for 2020.

Written by Salene Hitchcock-Gear, president of Prudential Individual Life Insurance, which includes Prudential Advisors.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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9 Tips to Bring New Life to Your Finances | Slide 2 of 10

1. Review your spending, create a budget and set up automated savings

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If you don’t have emergency savings, you’re not alone: Nearly 60% of Americans don’t have enough money to cover a $500 emergency, according to a Bankrate survey. Increasingly, workplaces are helping people to contribute to an emergency fund alongside retirement plans like 401(k) accounts, and if that option is unavailable, individuals can use direct deposit to set aside emergency funds.

Creating a budget and setting aside money for savings is one of the best ways to reach financial goals.

SEE ALSO: 7 Budgeting Tools to Get Your Finances in Order

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9 Tips to Bring New Life to Your Finances | Slide 3 of 10

2. Throw away your debt

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Debt is like that clutter in the closet that’s taking up space you need for something else, including reaching goals like buying a new home. And just as you’d go through your closet, start out by assessing the debt you already have. While you may not be able to pay everything off, with some discipline you can make real changes.

Begin with consumer credit cards, tackling those with highest interest rates first as part of an overall repayment strategy that also addresses student debt and mortgages. You may even be able to pay off some debt with money raised from a spring yard sale.

SEE ALSO: How to Get Off the Hamster Wheel of Debt

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9 Tips to Bring New Life to Your Finances | Slide 4 of 10

3. Perform your own self-evaluation to keep your career growing

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Take stock of where you are at work, including your salary. Check the salary range for your job, know what you’re worth and create a negotiation plan. If 2020 is the year you need to take a career break to take care of your family, think about how to maintain your skills through volunteering or continued learning while you take time off from paid work.

SEE ALSO: 25 Best College Majors for a Lucrative Career

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9 Tips to Bring New Life to Your Finances | Slide 5 of 10

4. Spruce up retirement plan contributions

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If you began the year with a raise, a good bonus or even got a great tax return, you likely have already begun planning a summer vacation, started looking at new cars or making other plans. Consider setting some of that aside for the future by adding to your workplace account or in an individual retirement account.

SEE ALSO: Getting a Pay Raise in 2020? How Not to Blow It

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9 Tips to Bring New Life to Your Finances | Slide 6 of 10

5. Review your tax withholding

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If you got a big tax refund in 2019, it likely feels like a bonus. But it really means you were paying more than you should have last year, giving Uncle Sam money that you could have put to work for your own needs. Set up withholding so that you get the most out of your paycheck through the year without owning any money at tax time in 2021.

SEE ALSO: 10 Things Every Worker Needs to Know About the New W-4 Form for 2020

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9 Tips to Bring New Life to Your Finances | Slide 7 of 10

6. Dust off your estate plans

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Doublecheck your list of beneficiaries to see if anything has changed in the last year. A change in any relationship, like getting married, will likely prompt an immediate change. Also consider whether any life changes would impact elements of an estate plan, including any power of attorney documents.

SEE ALSO: 10 Common Estate Planning Mistakes (and How to Avoid Them)

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9 Tips to Bring New Life to Your Finances | Slide 8 of 10

7. Review insurance needs

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Spring is a great time to consider whether any life changes, like having a newborn or getting married, create a need for financial protection. If someone depends on your income for any number of reasons, it’s worth considering whether life insurance will work for you. It’s also a great time to review homeowners or rental insurance policies as well.

SEE ALSO: How to Shop for Life Insurance

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9 Tips to Bring New Life to Your Finances | Slide 9 of 10

8. Put a new shine on your financial plan (with an adviser)

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Whether it’s an accountant for tax planning or a financial adviser for investment and insurance advice, it’s important to find a professional who can help you review your accounts and provide recommendations on how to best reach your financial goals. In current volatile markets, for example, it’s important to know what’s happened in your portfolio and to use any investment losses to reduce capital gains taxes.

SEE ALSO: 10 Questions to Fire at Financial Advisers

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9 Tips to Bring New Life to Your Finances | Slide 10 of 10

9. Sow the seeds of your financial future

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Begin to think about financial goals for the rest of the year and beyond — what seeds can you plant today to reap the rewards you seek? Focus on what you want for yourself and your family, with a near-term budget and some long-term ideas, including saving for retirement. Do you want to go on a big family vacation this summer? In retirement, do you want to live in an urban area and volunteer? Do you want to climb mountains?

As you shake the dust off your financial plan and imagine your future, cleaning house can help you understand how much it will cost and start thinking about ways to keep you finances in order throughout the year ahead. The sky’s your limit.

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