10 Ways to Spring Clean Your Finances

ways to spring clean your financesSpring could not get here fast enough.  Here in the Chicago area, we have experienced quite a winter.  In my lifetime, this has been the most extreme one that I’ve seen.  This winter has yielded a snowfall total that is in the top 5 ever recorded here, and I don’t recall a season with as many below-zero days.

With the upcoming thaw comes the annual ritual of spring cleaning.  I know that in my home, there is some purging of “stuff” that is needed, as well as reorganization of things. That, with some deep cleaning while the windows are open, just seems like a good thing to do around this time of the year.

Did I already say that spring could not get here fast enough?

Well, this time of year could also be a good time to take stock of our finances as well.  Now, many of us do this at the end of the year or at the beginning, as a part of resolutions and then taxes.  But that’s often a matter of gathering information, setting goals, and getting ready for tax time.

How about actually getting into the nuts and bolts of our money?  There are plenty of things that we can do to spruce up our finances and get a better handle on things during this time of year.  Along those lines, here are 10 ways that we can spring clean our finances:

  1. Rebalance our investments.  It’s a good idea to periodically rebalance your investments.  Let’s say that you target 60% of assets to be in stocks.  If there has been a run-up in stock prices, your mix will likely be even more weighted toward stocks.  For example, you might find your 60% allocation becoming more like 70% since the other asset classes might not have performed as well.  Rebalancing can help get things back in line to where you want them.
  2. Review your insurance policies.  Are your coverage amounts meeting your current needs? Can you get a better deal elsewhere? Taking some time to go over your existing policies and making sure they work for you is a worthwhile exercise.
  3. Take stock of your professional network.  Wait, what?  What does this have to do with money?  Well, I think it can have quite a big role in your finances.  Building up a network is something that many people don’t pay attention to, but I’ve seen some people accumulate a ton of wealth by being very good at networking.  It can only help you, and at times and places you might not otherwise imagine ahead of time.
  4. Get a copy of your credit report.  You don’t want to be held back by any mistakes on there.  It’s good to keep an eye on things and be proactive.
  5. Take inventory of your possessions.  While many of your big-ticket items may be the same from year to year, you may make some notable purchases from time to time anyway.  The ultimate goal here is to have an accurate accounting of possessions for insurance purposes.
  6. Review your college savings for your kids.  Whether it’s a 529, other accounts, or a combination – you should pay attention to how the money is growing.  Adjustments in your allocations can be made as necessary.
  7. Review your estate plan.  If you don’t have one, depending on your age you may want to consider developing one.  What you want to do is make sure that you have everything protected as well as possible, to account for different events, while ensuring that assets can ultimately be distributed according to your wishes.  It’s not fun to think about, but it would seem to be a good thing to review from time to time.
  8. Organize your tax documents.  Once tax season is over, make sure that you file away your final documents in a safe and secure place.  Don’t let papers sit around for an extend period of time, as you never know what could be lost.  With prior year tax returns, it’s good to be organized.
  9. Review your 401(k) contributions.  If you’re maxing out your contribution, it’s hard to go higher than the limit!  But if you’re contributing below the limit, it can be helpful to take another look at things periodically to make sure you’re not leaving money on the table.
  10. Collect unwanted items to sell or donate.  Hey, if you’re going to do a real spring cleaning anyway, why not get something for your unneeded or underutilized stuff?  You can sell on craigslist or some other avenue, or simply donate to those who might truly need it.  Either way, you’ll be a little bit richer for your efforts.

My Questions for You

Do you do any “spring cleaning” of your finances?

If so, which of the tasks above do you periodically do?

Do you have any other suggestions?

Comments

  1. says

    This year I’m trying a quarterly approach to “spring cleaning” my finances that seems to be working for me. I set new goals, tweak a few things with savings and budgeting, then work on achieving those goals by the end of the quarter. As for the long winter in the mid-west and east coast – I feel for you! Hopefully, spring will come soon and you’ll enjoy a wonderful summer!

    • Squirrelers says

      It nice that it’s working out for you, I’ve read some of your prior updates and it seems like you’re doing well with your goals! Yes, it’s been a really long winter this year as you said (though I’m sure it’s been great by comparison there). That’s history now! Though this first week of spring will see a number of days only in the 30′s, so I suppose it’s not completely past yet. Soon enough!

  2. says

    These are great suggestions, and I have to admit I’m delinquent in all! I’m of course forced to organize tax documents, but the others, not so much. When an insurance premium is due, I typically review our coverage and re-shop. Removing things from our home to sell or donate is more or less a continuous process for me (much to my wife’s consternation). The rest of you ideas, I procrastinate on.

    • Squirrelers says

      Well, it’s better late than never if you get started on them! I’m sure you have a good handle on everything as it is though :)

  3. says

    Good list. My wife didn’t set her 401(k) contributions high enough last year until she noticed it in November 2013. She drastically increased her contributions to 40% to catch up of the remaining pay periods. Of course, she forgot to reset her contribution amounts in the new year, even after I asked her to check on it twice. She finally changed it back to a lower monthly amount after I sat down with her, and we discussed it.

    As far as rebalancing, I always do that on my birthday, which is in the Fall. I check my credit report for free three times a year, one credit bureau every 4 months.

    • Squirrelers says

      Good work! A birthday seems like a consistent, reliable date to remember to do things. Maybe the day after the birthday might be more fun :)

  4. says

    We are meeting with our insurance agent this weekend to review our policies and coverages. I rebalance the portfolios at the end of the year, so I don’t have any spring cleaning there. The only other item is to run through our budget and see if we need to adjust it and review our annual goals.

  5. says

    I am currently in the process of re-organizing my tax documents since I have to finish up our taxes this weekend. Besides that,we’ll be ordering a credit report (long overdue) and reviewing our insurance policies to see whether we need to tweak them at all. It should be productive!

    • Squirrelers says

      That’s a good example for others to take notice of, that checking a report regularly can help identify errors. They can happen!

  6. says

    I’m in the process of finishing up my taxes and keep a folder for each years returns and records. I typically check my credit reports once a year but I do need to order a credit report for this year. I have most of my savings with Vanguard and one of the tools I use to make sure I am on track with asset allocation is the portfolio analysis. I check it at least once every quarter to see how I am doing and rebalance when appropriate.

    • Squirrelers says

      Sometimes it’s good to revisit our approach to things, to make sure we’re doing it effectively. Efficiency is a good thing.

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