It’s Time To Give Your Finances A Spring Cleaning!

It’s finally starting to feel like spring here in the northeast. My fiancé spent the entire weekend giving our house a good spring cleaning, so this week I’m going to spring clean our finances. It’s a good idea to review your finances a few times a year, and if the change in season is what reminds you to do it, then it’s as good a time as any!

With all the changes that will be happening in our lives this year we have a bit more to take care of than normal. Here’s what I’m tackling in our financial spring cleaning for this year:

Filing Our Taxes - Yeah, yeah…shouldn’t a guy who writes a finance blog have his taxes done already? Normally, yes, but I’ve been unusually busy this year and just haven’t had time to sit down and do them! While we all know we have to file our taxes in the spring time, another good idea is to review your tax withholding for the upcoming year after you file and find out how much you owe or are getting refunded. I’ve talked about why I don’t like getting a big tax refund, so if I end up getting a huge refund check I’ll adjust how much gets held out of my paychecks for the coming year.

Update Beneficiaries - Most of the time you set your beneficiaries when you set up your accounts and never have to think about changing them again. Well, since we’re getting married this year we’re going to be listing each other as the beneficiaries on our insurance policies and retirement accounts. So while my brother and sister will be gaining a new sister, they’re losing the money in my 401k and IRA’s if I meet my demise do to an unfortunate scuba diving accident on the honeymoon. Sorry guys!

Rebalance Your Portfolio - I try to rebalance my investment portfolio twice a year. Once in January and once in June or July. It doesn’t matter when you rebalance, but I definitely recommend doing so at least twice per year. If you’re already looking over all the other aspects of your financial life for a spring cleaning, what better time than now to rebalance as well?

Make A Last Minute IRA Contribution - If you haven’t filed your taxes yet, you have until April 15th to open or contribute to an IRA for the prior year and reduce your taxable income by $5500. If you haven’t started saving for retirement yet, now is the time to start! Kill two birds with one stone by opening an IRA and getting started today.

Close Inactive Accounts - Last year a checking account I hadn’t used in quite a while started charging a monthly fee. I kept the account open after switching banks out of pure laziness and hadn’t given it a second thought since. Thankfully when I was doing my spring cleaning last year I noticed I was charged a $5 fee in the account in March. I sprung into action and closed the account ASAP. Luckily the fee was only implemented the month prior, but if I hadn’t been looking things over I probably wouldn’t have noticed and would have unnecessarily paid them several months worth of fees on an account I wasn’t even using.

Check For Better Rates - For whatever reason, shopping around and checking that I’m paying the best rates for my insurance coverage is something I just never think of doing. If only insurance companies would put a commercial on TV every now and then to remind us! Recently I’ve made this part of my spring ritual. You’d be amazed at how often rates change. Even if you don’t change your car or home insurance, going around and getting a few free quotes from places like Geico or Esurance can show you if you’re paying too much or getting a good deal with your current insurance.

Automate Your Finances - Set up your automated system for saving money, paying your bills and even investing your money. I hate having to worry about what the due dates on my credit card bills are and if I remembered to schedule the payment. By setting up a system to automate your finances you can free up your time and your conscience to worry about more important things. Not only does it make your life less stressful, but it makes saving and investing so much easier once you have regular automatic transfers set up.

Just like it feels great to give your house a good spring cleaning and emerge from the weight of the winter, spring cleaning your finances can make you feel better prepared and more in control of your financial life. So take the time over these next few weeks to simplify and optimize your finances, and get yourself on track to reach all the goals you set for yourself in the beginning of the year.

Readers: Are there other steps or rituals you go through when spring cleaning your finances? What are some of the changes you made this year?

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16 Responses to It’s Time To Give Your Finances A Spring Cleaning!

  1. I’ve been updating my bank account yesterday and registered into an online banking. It’s easier to pay bills through online with just one click.

  2. Nice tips! I really like the one about closing old accounts.
    May I suggest another: Download the ItsDeductible app to make keeping track of donations easier for when you do taxes this time next year. If taxes are a pain, get a system together NOW to make them easier in the future.

  3. Thanks for your article Jay. The new year is time for my wife and I to make new goals and to streamline our finances (like the closing of inactive accounts you mentioned). We also make our Roth contributions for the current year, as we never run up against the max income level.

  4. Mr. SFZ says:

    Nice post Jay. This year I started off with reviewing last year’s finances, seeing what I did good on and what I would like to improve and then making new financial goals for the year. I’ve found setting goals early in the year really helps me stay on track.
    From your list I also switched car insurance companies to save on my premium and started automating finances through setting up more bills to be paid online with a debit card and an automatic savings deposit each week.

  5. My wife and I sat down at the start of the year and decided that we want to save over 60% of our income. So much of our “spring cleaning” of the finances happened already. But there are still some things to review, like our asset allocation for investing.

  6. Jef Miles says:

    Hey Jay,

    What are your thoughts on automating this whole process and have someone do all of this for you?

    As much as I’m a hands on kind of person, it does take time and could be spending time on earning more than I would save if this was all outsourced.. Great idea though :)

  7. Thanks for the tips! I especially like about checking better rates for insurance. I never thought about it before!

  8. Saving 40% of my monthly income is what I’m planning this year. So far I am on track and doing it well. I’m curious about the automated way of handling your finances. I might try doing it this year.

    • It makes things so much easier and less stressful when you don’t have to worry about all the due dates for bills etc… Just automate it and get on with life!

  9. I cut $15 off my monthly cell phone bill with a quick trip to Verizon – talk about your excellent hourly rates!

  10. brent says:

    While I’m saddened to lose the dibs on your 401k id much rather gain a sister. Also it is a great idea to check on all your contract/subscription services. Nearly all can be moved or negotiated into lower rates. Worst case, you may gain a few extra Tv stations out of it!

  11. Ruth Caforio says:

    So, I’m the person that when a store says, save 20% today by opening a store card, I do it. I have a few store cards I dont use anymore. In the past I’ve been told it hurts my credit to close them myself and I’m better off to wait for the company to close them on me because I’m not using them. What’s your advice on accounts like this?

    • If you don’t use them, go ahead and close them. It might drop your score a little bit right off the bat, but long-term it won’t have much effect. As long as you’re not planning on taking out a loan in the next few months it won’t make a difference if you close them.

  12. I’m rebalancing my portfolio now and getting more defensive.

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