It has been a long winter, and the last thing anyone wants to think about is spring cleaning; however, an annual deep clean of your house is a chance to start fresh, get organized and get back on track.
The same is true for your “financial house.” By taking this time once a year to review your financial well-being and creating clean and organized finances, you may be able to gain confidence while freeing up more time to enjoy the warm spring weather just around the corner.
Use the following S-P-R-I-N-G acronym to get motivated as you review components of your “financial house.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
S—Shred old financial documents.
Keep your tax returns, canceled checks, and any records that support tax deductions for auditing purposes. But, it may be time to get rid of those old pay stubs, financial records and documents that you’ve been saving for years. The IRS recommends keeping tax documents anywhere from three to seven years depending on your specific tax situation. Visit www.irs.gov to learn more and determine how long you should retain your tax documents. And remember, it’s important to shred, not throw away old financial documents to help protect your identity.
P—Prioritize your expenses.
Review your savings goals and spending habits. If you have never tracked your spending or set a budget, you may be surprised at how much small purchases add up. Consider using online resources to establish a budget and provide personalized financial reminders. These sites also provide expenditure comparisons, such as the average cost of auto insurance, to help identify additional savings opportunities.
R—Review your estate plan.
Creating an estate plan is a way to efficiently pass on assets to your loved ones and to help avoid the stress and cost of probate after you pass away. If you already have an estate plan, do an annual review to make sure designations are all still current. If a major life event has occurred ,— such as marriage, divorce, birth or death — since the last time you updated your estate documents, take action and meet with a qualified attorney to help you make the necessary revisions.
I—Investigate your insurance coverage.
Now is a great time to review all of your current insurance policies to make sure you’re still paying the best rates and have the appropriate amount of coverage. This review includes home, vehicle, health, long-term care, life insurance and more. If you have had a policy in place for a number of years, there may be enhanced benefits or better rates available in the marketplace than in years past. Consider bundling policies and shopping rates to find the best deal for you.
N—Negotiate your rates.
Every year, make it a priority to look at your outstanding debts and the interest rates you’re paying. Compare rates so that you have a realistic expectation of a possible rate reduction. If your rates are on the high side, contact the loan provider or credit card company and start negotiating a lower rate.
G—Go over your retirement plan.
If you already have a retirement savings account, review the plan and consider contributing the maximum amount possible or, at a minimum, taking advantage of any employer-matching programs available to you. If you do not have a retirement savings account through work or want to contribute even more, consider opening an individual IRA or a Roth IRA as a way to save for retirement.
Remember, your finances should be top-of-mind all year long; but take some extra time this spring to review your progress and get your financial house in order. If you are feeling unsure about your retirement, be sure to consult a qualified financial professional.
Steve Post contributed to this article.
-
Seven Local Social Security Offices Are Suspending In-Person ServicesA departure from closing locations, seven local Social Security offices will temporarily stop all in-person service and will only be available by telephone.
-
The Explosion of New AI ToolsThe Kiplinger Letter Workers and consumers soon won’t be able to escape generative AI. Does that mean societal disruption and productivity gains are right around the corner?
-
Don’t Make These Five Mistakes on Your Tax ReturnTax Filing The IRS warns taxpayers to watch out for these common errors as they prepare to file.
-
This Underused IRA Option Offers Tax Benefits and Income SecurityLooking to avoid running out of money in retirement? Consider longevity protection provided by a QLAC as a component of your retirement income plan.
-
These Four Books Explore How to Leverage Our Outrage PositivelyThe authors offer some powerful tools to help us find solutions to discord rather than remaining silent or blowing up in anger.
-
Financial Pitfalls to Avoid in Your 30s, 40s and 50sAs you pass through each decade of working life and build wealth for retirement, watch out for the financial traps that can hinder your progress.
-
Five Key Retirement Challenges (and How to Face Them Head On)Life will inevitably throw challenges at you as you get older. But making a flexible retirement plan — and monitoring it regularly — can help you overcome them.
-
Four Action Items for Federal Employees With $2M+ SavedIf you can't stand the chaos, maybe you can walk off into the sunset of retirement. Here are some thoughts on how to figure out if that would work for you.
-
How to Help Accelerate Support for Women's EqualityInternational Women's Day was earlier this month, and the theme this year is Accelerate Action. Here's how we can all pitch in to help drive gender parity.
-
How Tariffs Could Impact Affluent RetireesThe wealthier you are, the less price increases on groceries and cars will hurt you, but if markets dive or we enter a recession, that's a different story.
