Turning to Spring Cleaning? Add Your Finances

April 30, 2020

Maybe you haven’t noticed that Spring is upon us.   In social isolation,  though, perhaps you have taken on even more spring cleaning this year to keep you active and busy.   What a perfect opportunity to clean-up your finances, too!  Here are a few simple tasks to help with getting your finances in good order before you start making those summer vacation plans.


Check Your Withholding

Are you getting a large tax refund this July?  Well you just gave Uncle Same an interest-free loan.  Now may be a good time to adjust your withholding.  Receiving a refund is not a bad thing but if you find that it’s a large refund, you could be adding more to your paycheck.  You also don’t want to owe a significant amount of money to the IRS.  Ideally your goal should be to get as close to breaking even as possible.


Consolidate Retirement Accounts

Have you accumulated a number of retirement accounts? Throughout your career, you may have switched employers and acquired multiple retirement accounts. You’re not alone: Many people have aging 401(k)s, IRAs and other retirement accounts of convenience.  Now is a great time to consolidate these. IRAs, SEP IRAs, SIMPLE IRAs and 401(k)’s can all be consolidated into a single IRA.  Roth IRAs can only combine with other Roth IRAs.  Be sure to review the investment options and expenses in the 401(k) as compared to what is available in your IRA. Combining multiple accounts, may save you fees and most certainly will save you paperwork. Most importantly, you and your advisor can more easily and strategically invest your retirement account for today and the future. When it comes time to take withdrawals, calculations and taxes will be much easier as well.


Review Your Budget

You may be spending less these days, and you may have less coming in too.  Now is the perfect time to review and possibly update your budget.  Maybe you want to pay down debt, eliminate unnecessary expenses or review your financial goals; you still have a significant part of the year to put a game plan in place.  Start by reviewing your expenses for the first quarter and identify any large or unexpected expenses.  Determine if your current budget needs to be adjusted or maybe you are you able to put a little extra into savings.


Clean Up The Paper

We all tend to accumulate piles of important documents and statements. Now is the time to look through your financial documents and consider which to keep and which to discard. Keep recurring documents, such as investment and bank statements, property and casualty insurance renewals or social security and retirement statements, for one year. You need only keep household bills and credit card statements until you have a record that the bill was paid (unless you need these statements as evidence for tax filing or proof of purchase). Shred all outdated and unnecessary statements.

Try organizing your saved documents into a folder with the newest date on top. This way, if you go looking for a specific document, you won’t shuffle through a year’s worth of back up. Maybe, you prefer storing everything digitally. If so, consider naming folders starting with the year, followed by the two-digit month and ending with the name of the institution or document. This keeps the files sorted in an easy, chronological order. Remember, all electronic files should be backed up regularly, whether stored locally or in the cloud. These days, there are plenty of services that will sync your devices and securely back up your storage.


We hope these few easy tasks will help you with getting your financial affairs in good order before heading into the summer and hopefully getting back to more activities.  Remember this doesn’t have to be a long drawn out process.  If you are looking for more easy and great ideas, contact us today.

By Susie McLane