Spring is here. It’s time to dust those shelves, clean out those drawers, and wash those drapes. While you’re at it–why not take a look at some of the ways you can clean up your finances too?
Think of it this way, the purpose of spring cleaning your home is to give it a fresh, new start for the warmer months. Your finances may not accumulate the same dust and cobwebs that your home does, but they do need to be rechecked, rebalanced, and adjusted routinely based on changes in the economy, your holdings, and your goals.
Rework Your Budget
No budget stays good forever. We need to adjust in order to accommodate changes in our lifestyle, goals, and income. By reworking your budget every spring, you can make it more efficient and more fitting with your current lifestyle and needs.
Question All Charges
How often do you pay your bills — insurance premiums, utility bills, credit card bills, and so on — without really analyzing the charges and finding out if there’s a way to get cheaper rates? Once a year you should go through all your bills and make sure that there aren’t any sneaky extra monthly charges you need to stop and start comparison shopping to see if there are any cheaper rates you can get.
Rebalance Your Portfolio
When you initially set up your portfolio, you will choose investments based at least in part on your risk tolerance. Over time, as the value of those various investments change, so might the weights of the various risk classes within your portfolio. In the end, this could make your portfolio over-invested in positions that aren’t suitable for your risk tolerance. When rebalancing your portfolio, it is wise to consult a professional.
Reassess Financial Goals
Over time, our goals change. Ten years ago, you might have thought 50 was a good age to retire, but now you might be thinking 65 sounds better. Five years ago you might have wanted to buy a house, but now you might be happy living where you are. Reassessing your goals each spring allows you to not only determine what still rings true for you but also what doesn’t seem as practical or as important.
When it comes to your money, you should never be happy with maintaining the status quo. With an annual financial spring cleaning, you can get the most out of every dollar you earn.
This is a guest post from Dixie Somers. She is a freelance writer from Arizona. She writes for finance, business, and family niches. Dixie is the happy wife to a wonderful husband and a proud mother to three girls. An expert from Family Financial Partnerswas consulted for this article.