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With spring just around the corner, it’s the perfect time to start planning a spring clean, not just for your home but for your finances as well.
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GOBankingRates interviewed David Smallwood, a financial advisor at Northwestern Mutual, to get some insight on how to organize your finances this year.
Update your budget
The best budget is the one that benefits you, so you need to make sure that your budget changes as your spending and goals change.
“Take time to review your income and expenses to ensure you’re meeting your financial goals,” says Smallwood. “Set clear, healthy, and realistic financial goals for this year. Break them down into small, achievable steps.
“For example, if you have outstanding debts incurred over the holiday season, consider using first-quarter bonuses or tax refunds to aim to resolve them before the year’s midpoint. And don’t forget that financial professionals are here to help.”
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sponsor: Protect your wealth with a Gold IRA. Take advantage of gold’s timeless appeal with a Gold IRA recommended by Sean Hannity.
cleanse your financial habits
Forgotten subscriptions can really add up and suck money out of your budget that could be better spent elsewhere.
“Identify subscriptions and expenses that can be consolidated or eliminated to save money,” Smallwood recommends. “If you have one or two debit cards that you use for the majority of your subscriptions, consider canceling them and re-signing up for only the subscriptions you need. We also recommend that you regularly check your Android app subscriptions to make sure the trial you signed up for doesn’t unknowingly become a recurring subscription.
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organize documents
Staying organized is an important part of financial management.
“Gather important financial documents such as bank statements, tax returns, and insurance policies,” says Smallwood. “Keep it in a safe place so you can easily access it when needed. Make sure you have physical copies of all your documents and keep them in your home safe or a safe deposit box at your local bank. It’s recommended, and it’s also a good idea to keep a secure, encrypted copy of all the same documents somewhere in the cloud.
“Make sure you have at least one trusted confidant who has access to your documents, both digital and analog. Having your financial documents in one place will help come tax season. Get ahead of this. To do this, create a specific digital or physical folder at the beginning of each year to store your tax-related receipts and documents.
Streamline your investments
Smallwood recommended reviewing your investments to see if adjustments need to be made to stay on track with your financial goals.
“It’s always good to review your investments around tax time, as there may be opportunities for tax savings based on the performance of your investments in the previous year,” he said.
Smallwood’s other suggestions for streamlining your investments include:
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“Diversify your portfolio: Diversifying your investments across different asset classes, industries, and geographies can reduce your risk and potentially improve your returns.
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Consolidate your investments. By consolidating your 401(k) and IRA accounts in one or more locations, your minimum distribution will be easier to track and access.
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Automate your investments. Set up automatic contributions to your investment account. It helps you stay disciplined and consistent with your investment strategy.
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Rebalance regularly. Regularly review and adjust your investment portfolio to maintain your desired asset allocation. It also helps optimize revenue and manage risk. ”
Use the right tools
“Finally, there is no substitute for a financial professional,” Smallwood said. “If you’re solid, you’ll do well at each of these steps. Talk to someone who can work with you to build your path to financial prosperity. The right financial professional will help you make strategic breakthroughs. We act as a trusted partner and help our clients achieve their wealth building goals.”
And even if you’re not ready to work with a financial advisor yet, Smallwood said there are online platforms, robo-advisors and financial apps that can help with tasks like analyzing performance and making informed decisions.
“What I recommend is finding an interest in the financial profession and a desire to work with them,” he said. “While there are useful tools, there is no substitute for a partner who can directly address an individual’s needs.”
GOBankingRates Details
This article was originally published on GOBankingRates.com: Spring Cleaning: 5 Ways To Tidy Your Finance for 2024
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