Now that we have officially made our way into spring and tax season is behind us, it is a great time of year to clean up all things financial in your life. Here’s an easy action plan to get organized and potentially save your family money in the process.
- Take stock of your monthly recurring expenses and either use a simple spreadsheet or a budget tool to help organize your spending. Pay close attention to those subscriptions and utility bills. Figure out what is coming in on a monthly basis and what is going out.
- Look closer at cable, internet, and cell phone bills. These bills tend to creep up after a while and before you know it, are significantly more expensive than what you originally were paying. Many times it’s worth a call to those providers to so if you can negotiate them down or get a new promotion.
- Check your credit score to make sure things are in order. There are many free credit score websites that will allow you to track your credit report and score on a regular basis. It is extremely important to review it every couple of months to make sure it’s accurate and that there are no new accounts added to it that you didn’t open. Being vigilant about your credit can save you from the waste of time, money, and headaches associated with identity theft.
- Review any outstanding debts like credit card balances or loans to make sure that interest rates that are associated with them are what you think they are. Some debts may have floating interest rates, so it is essential that you pay off any higher interest rate debts first.
- Evaluate and rebalance investment accounts as necessary. Every quarter it makes sense to review your retirement accounts or other investment accounts to make sure that they are appropriately allocated based on your investment goals. If you are unsure about whether changes need to be made, consider enlisting the assistance of a trusted financial advisor.
- Review tax withholding – As taxes have just been filed, there is no better time to consider adjusted tax withholding on paychecks. If you owed a large amount or received a large refund, consider taking action to remedy the situation. Some people like getting a large refund every year, but if it’s at the expense of not having enough money on a monthly basis leading to credit card debt until your refund arrives, that’s not a good plan. There are tools available online and often payroll providers will offer a withholding tool to employees whose company uses their services.
- Consider increasing retirement plan contributions. If you identify some savings throughout the spring cleaning process, this could be a great opportunity to put it to work before it is spent on non-essential items. A 1% difference can make a large impact on savings over a person’s working life.
- Review insurance coverages – Most people rarely think about their various insurances until they have a claim. Meet with a qualified insurance professional to be sure that you are carrying the appropriate amount of life, disability, home and auto insurance. This may also entail shopping around in order to make sure you are not overpaying.
By taking a little time to get your financial house cleaned up, you will not only feel better but you may even have found some extra money to put towards a summer vacation!