Spring Cleaning Your Finances

While most spring cleaning projects are likely focused on your home, spring is also a good time to evaluate and clean up your personal finances.

Examine your budget…and stick with it
A budget is the centerpiece of any good personal financial plan. Start by identifying your income and expenses. Next, add them up and compare the two totals to make sure you are spending less than you earn. If you find your expenses outweigh your income, you’ll need to make some adjustments to your budget.

Keep in mind that in order for your budget to work, you’ll need to stick with it. While straying from your budget from time to time is to be expected, there are some ways to help make working within your budget a bit easier:

  • Make budgeting a part of your daily routine
  • Build occasional rewards into your budget
  • Evaluate your budget regularly and make changes if necessary
  • Use budgeting software/smartphone applications

Evaluate your financial goals
Spring is also a good time to evaluate your financial goals. Take a look at the financial goals you’ve previously set for yourself — both short and long term. Perhaps you wanted to increase your cash reserve or invest more money toward your retirement.

Review your investments
To determine whether your investments are still on target, ask yourself the following questions:

  • Has my investment time horizon recently changed?
  • Has my tolerance for risk changed?
  • Do I have an increased need for liquidity in my investments?
  • Does any investment now represent too large (or too small) a part of my portfolio?

Pay off debt
When it comes to personal finances, reducing debt should always be a priority. Whether you have debt from student loans, a mortgage, or credit cards, have a plan in place to pay down your debt load as quickly as possible. The following tips could help you manage your debt:

  • Keep track of credit card balances and be aware of interest rates and hidden fees
  • Manage your payments to avoid late fees
  • Optimize your repayments by paying off high-interest debt first
  • Avoid charging more than you can pay off at the end of each billing cycle

Take a look at your credit history
Having good credit is an important part of any sound financial plan, and now is a good time to check your credit history. Review your credit report and dispute any inaccuracies.

Assess tax planning opportunities
The return of the spring season also means we are approaching the end of tax season, Now is also a good time to assess any tax planning opportunities for the coming year. You can use last year’s tax return as a basis, then make any anticipated adjustments to your income and deductions for the coming year.

Be sure to check your withholding. If necessary, adjust the amount of federal or state income tax withheld from your paycheck by filing a new Form W-4 with your employer.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016.

Speak Your Mind

*