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10 Spring Cleaning Financial Tips

April 28, 2017
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It's the day after tax season! Hopefully Uncle Sam treated you nicely this year, and now that your taxes are filed you've probably started to look towards the year ahead. Spring is here, you're cleaning the house, getting ready for summer break, planning your vacations; but what about your finances? What are some spring cleaning tips to get your financial house in order? Here are a few that might help.

1. Meet with your tax professional   

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By the end of April, you should know whether you’re in line for a tax refund, or whether you owe more than you’d planned to pay. If you consistently find yourself playing the guessing game come tax season, it may be worth having a meeting with your tax professional for the year ahead. If you tell them the big ticket items you have planned for the year, be it buying a home or starting a business, they can give you tips to save on your taxes, rather than having to make the best of the situation after the fact.

2. Check your credit report

If you don’t check it regularly, the beginning of the year is an excellent time to review your credit report for discrepancies. Unplanned inquiries, debts that have gone into collections, and even rising balances on a credit card can lower your score unexpectedly. Reviewing your score can help you see where you need to focus your efforts in the coming year. Also consider signing up for a service that regularly updates you on changes in your score. Check our video blog here to find out how your FICO score is calculated.

3. Draft or update your will

If you don’t have a will or power of attorney planning completed, look for an attorney or service that can assist in drafting these documents. Some employers will contribute to your costs or offer a discount for utilizing certain attorneys, and DIY companies such as LegalZoom may be adequate based on the complexity of your needs. If you have these documents in place already, review them to see if any of the information is out of date: have you divorced since they were drawn up? Upon your death are you leaving assets, or even worse, your children, in the hands of someone who can no longer manage the responsibility? A thorough review can prevent a potential planning disaster.

4. Cut unnecessary expenses … and maybe add a few worth having

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High cable packages, cellular plans with data that goes unused each month, memberships at gyms you never go to; it can all add up. Search for cost savings in areas where you may be wasting dollars each month. At times, however, adding expenses might be worth the money in terms of time saved. Are you self-employed, and spend a great deal of time doing administrative work when you could be finding new business? Maybe hiring a part-time assistant would free up your schedule and lead to increased revenues. Are you a working parent, coming home after a long day and faced with cooking food and cleaning the house? Maybe a cleaning company or a food delivery service is worth your investment.

5. Review your investment and insurance needs

Rarely do our financial lives stay the same year after year. From an investment perspective, everything from your asset allocation to your risk tolerance should be reviewed regularly to see if adjustments need to be made. Insurance policies need to be reviewed for several reasons; a term policy could be on the verge of expiring, and your coverage needs might have changed as a result of increased age, income or health concerns. For both investment and insurance, check the listed beneficiaries to ensure that the proceeds of any accounts are distributed correctly in the event of your death.

6. Set a savings goal and automate it

Automating your savings keeps us away from our worst enemies when it comes to finances: ourselves. If you try and force yourself to have the discipline to save, you may not stay on track. But taking steps like setting weekly transfers from your checking to your savings, or asking your employer to divert some of your paycheck into a savings account can help you keep pushing forward to your goal. If your problem is that you save but you always dip into the account, consider putting the funds in a place like a brokerage account or a credit union savings, where it can take a longer period of time to get your money if you make a withdrawal. Hopefully, the added time will discourage you from using those funds to splurge on unecessary purchases.

7. Increase your retirement contributions

If your employer matches retirement contributions but you’re not taking advantage, increase your contributions this year. Owners of IRAs should try and max out their contributions or, at the very least, increase their savings compared to last year. With the decline of pensions in America, more and more people will be responsible for funding their retirement, and an annual commitment to retirement savings is an important part of a financial plan.

8. Pick a cause to support

In addition to volunteering your time and effort, pick a cause worth contributing to financially in the year ahead. Whether a charitable organization, a school endowment or a religious organization, these contributions won’t only make you feel good; they’ll help on your taxes as well! Contributions to 501(c)(3) organizations can offer a valuable deduction come tax season.

9. Find a helper 

If you haven’t already found them, search for professionals that can help manage the portions of your finances that you don’t have the time to address. Financial planners, C.P.As, realtors; all can assist in areas that aren’t your expertise. If you’re the type that likes to do it yourself, websites like www.mint.com and others can help manage day to day financial matters, lightening your burden going into the new year.

10. Adjust as life changes

While an annual review is great, life doesn’t wait until the beginning of the year to change. If you experience a significant life event, address its impact on your financial plan sooner rather than later. Whether an opportunity or an unfortunate event, coordinating your financial affairs as things evolve is important. Make sure your plans are always up to date, and keep things moving forward!

Representatives of Signator Investors, Inc. do not provide tax and legal advice.  Please consult your tax advisor or attorney for such guidance.