Time to Spring Clean Your Finances

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Spring clean your finances

Spring Clean Your Finances

 With Daylight Savings approaching, spring is just around the corner. While you plan to dust and declutter your home, take the same care with your finances. Here are some tips to get you started.

  1. Declutter your financial life.
    1. Consolidate old accounts-review your finances. More accounts don’t mean more diversification, just more statements.
    2. Fifty-one percent of Americans have subscriptions they don’t use or have forgotten about. Look through your account registers to identify recurring charges you’ve overlooked.
  2. Prioritize paying down debt. Wipe away all toxic debt-these hurt your finances. These are loans with a variable rate, like HELOCs, credit cards, etc. Next, focus on unnecessary auto loans. Finally, make it a goal to be fully debt-free by retirement.
  3. Pay close attention to your cash, money markets & CD accounts. Banks are struggling to pay competitive interest rates, while money markets at Pershing, Schwab and TD Ameritrade are all paying above 3.5%. As with all money markets, these rates are variable and subject to change.
    1. For longer-term money, consider US Treasuries. Both the 6-month and 1-year notes are paying over 5%. These are issued and backed by the US Government.
  1. Improve your emergency fund. If you receive a tax refund this year, use it to boost your emergency fund. Work towards 6 months’ worth of expenses.
  2. Reassess your budget and retirement contributions. Take another look at your monthly budget and adjust your expenses based on your year-to-date spending. Consider increasing your retirement savings and think about the Roth option in your 401k/ 403b.
  3. Review your life or long-term care insurance. Contact an insurance brokerage and shop the best rates. Or if you own an old cash value policy you no longer need, it can be sold or transferred tax-free into another solution (ex.- guaranteed income).
  4. Shred old financial documents. The IRS recommends keeping at least three years of tax returns. You should also keep documents related to your house, car, finances or stocks. The rest can be shredded.