Spring clean your finances in 5 easy steps
Spring is considered a good time to deep clean your home. To really get your house in order, expand the tradition to include putting your finances in order. It can help reduce stress and give you a sense of confidence. Here are five steps to help you organize and polish your financial life.
- Throw away paper and secure passwords. It’s easy to get bogged down in paper, even in the electronic age. Get out the shredder and throw away the old bills and notices. If you store passwords on paper, consider moving them to a more secure password storage device for better security. While you’re at it, change your passwords to reduce the risk of getting hacked.
- Assess your financial stability. Review your personal cash flow by preparing a summary of money coming in and going out to pay bills, fund your lifestyle, and manage emergencies for a set period of time. Calculate your assets and liabilities to get an estimate of your net worth. Watch for rising living costs and look for opportunities to increase your income, reduce your debt, reduce your expenses and increase your savings.
- Simplify cards and subscriptions. Use those gift cards that are piling up in your wallet. Consider eliminating memberships that are not value for money. Close that old bank account if you no longer use it. Review rates for insurance policies, cable and phone contracts, and other ongoing costs that can be renegotiated, bundled, or improved by switching to a competitor.
- Touch up your estate plan. Update your will or trust to make sure it reflects your wishes. Confirm that your beneficiary designations are up to date, especially if there has been a divorce, birth or death in your family. Further protect yourself by assigning a Power of Attorney and creating a Living Will and Advance Directive according to your personal wishes and state requirements.
- Refresh your savings and investments. Make sure your emergency fund is sufficient to deal with an unexpected setback. Check your retirement savings to determine if you’re still on track. If you earn more, consider saving more. Make savings automatic with every paycheck. If you have a 401(k) with a former employer, a rollover may provide more investment options and lower your costs. Consider diversifying your investments to better align with changes in your life. Spring is the perfect time to meet with your financial advisor for your annual review and fine-tune your financial plan based on changing life goals and circumstances.
Thomas A. Callaway CRPC®, is a financial advisor at Ameriprise Financial Services, Inc. in Paris TX. He specializes in fee-based financial planning and asset management strategies and has been practicing for 29 years. To contact him you can go to www.ameripriseadvisors.com/thomas.callaway or call (903)785-7000, office located at 2219 Lamar Ave Paris TX 75460.
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