Second only to the arrival of the New Year -- which for most of us is now a distant memory -- spring offers a fantastic opportunity to make a fresh start with our finances.
Leverage these six ideas as you embark on your own financial spring cleaning:
1. Review your allotments and systematic investments. I'm a huge fan of paying yourself first. In other words, schedule a payroll-deducted investment in your Thrift Savings Plan (TSP), or set up an allotment to your savings, IRA or other investment accounts. Saving and investing "the first dollar in" makes a lot of sense, especially because most of us have little left over at the end of the month. And you may be able to do more, depending on whether you've gotten a pay raise or a promotion since you last adjusted your systematic savings. Take a fresh look with an eye on bumping up what you're doing. In 2019, basic IRA and TSP contribution limits increased to $6,000 and $19,000 respectively, so that alone could create an opportunity for you to save more.
2. Do a 360-degree inspection of your insurance. When was the last time you took a comprehensive look at your insurance coverage? If you've moved, bought a house or had a child and your coverage doesn't reflect those life changes -- or other big ones, now is the time to get things squared away.
3. Revisit your financial goals. According to the Schwab 2018 Modern Wealth Index, less than 40% of Americans have any tangible financial or savings goals. If that's you, sit down with your spouse and map out your short-, medium- and long-term financial goals.
4. Dust off your spending plan. If you're struggling to find money to save, invest, pay down debt or fund your fun, take a close look at your budget. Tracking your expenditures for 30 to 60 days may be enough time to identify opportunities to cut back. In other words, you might be in synch with the season and find a little of your own green.
5. Review your credit reports. Last week, one of my 20-something kids asked me to sit down with her and review her credit report. As a financial planner-parent, it warmed my heart, but it also reminded me of how it's important to periodically ensure the data the credit bureaus have associated with you is actually yours. Is the data that is used to generate your score accurate? Better to find an error during a little spring cleaning than after you've applied for credit. Visit www.annualcreditreport.com for your free report.
6. Generate some income. Turn your traditional spring cleaning into a revenue generator. As you're sifting through the piles of unutilized stuff at your house, think sale. Whether you go the garage sale route or use one of the many apps designed to help people unload their unwanted stuff, don't miss out on the chance to create this win-win: Declutter your home and bulk up your savings.
This spring, clean up more than your garage with a focused effort to fine-tune your finances.
