Spring-Cleaning for Your Finances

"Part of your heritage in this society is the opportunity to become financially

independent."

Jim Rohn

Spring is the perfect time to clean out your life.

Why not consider spring-cleaning for your finances? We all accumulate financial clutter that needs to be dealt with if our finances are going to stay in top condition.

This spring, spend some time getting your finances back on track.

Develop and Maintain a Filing System

Maintaining finances is easier if you maintain good records and have an intelligent system to keep everything organized.

Develop your filing system as you work through the rest of your financial spring-cleaning. All spring-cleaning involves putting things in the proper place. This is the perfect time to develop a filing system that works for you.

Develop and Maintain a Filing System

Develop and Maintain a Filing System

Evaluate Your Spending

Getting an accurate picture of your spending is one of the most important things you can do.

Without extra money left over at the end of the month, you simply have nothing to save, invest, or help to handle inevitable financial challenges, retirement planning, and so on.

“It is a kind of spiritual snobbery that makes people think they can be happy without money.”

-Albert Camus

Evaluate Your Spending

Evaluate Your Spending

Review Your Debt Debt is a real financial challenge, but it’s not

complicated.

Sit down and look over your debt. Develop a plan that will eliminate it as quickly as possible.

Most importantly, develop habits that prevent your debt from growing larger.

“Our incomes are like our shoes; if too small, they gall and pinch us; but if too large, they cause us to

stumble and to trip.”

-John Locke

Develop a Budget

Since you’ve already done a detailed analysis of your spending, it’s a simple matter to create a new and improved budget.

Hopefully, you found several places to save some money and can increase the amount you save and invest each month.

Regardless of how much money you make, everyone needs a budget. Living without any financial boundaries is a recipe for disaster.

Develop a Budget

Develop a Budget

Develop a Budget

Insurance Nobody seems to like thinking about insurance. It’s a

considerable amount of money for something that rarely gets used.

Banks require us to have insurance when we have a mortgage or a car loan. And there are so many types of insurance.

What do you really need and how much do you need?

“Owning a home is a keystone of wealth - both financial affluence and emotional security.”

-Suze Orman

Determine Your Life Insurance Needs

Determine Your Life Insurance Needs

Disability Insurance

Many people opt out of disability insurance, but consider how you will survive if you’re unable to work for an extended period of time.

Social security pays relatively little and only in the event you are completely unable to work. It doesn’t pay for the first 5 months.

Think about how much you need to pay for your critical expenses and consider getting a policy that will cover that amount.

Insurance Tips

There are numerous policies available. Not every type of policy makes sense for every one. But insurance is important. Perform the following at least once a year:

Go over all your policies: Life Home/renters Auto Business policies for business owners Disability Medical Liability

Insurance Tips

Get a few quotes to ensure that you’re not overpaying. Some companies have much lower premiums for certain types of insurance or for certain parts of the country. See if your premiums are the best you can do.

Are you getting all the discounts you’re entitled to? For example, if you have multiple policies through a company, you should receive a discount in most cases.

Insurance Tips

Review your beneficiaries. Life circumstances change and your insurance needs and beneficiaries will change, too. Ensure that the right people will be getting your assets when the time comes.

Savings and Investments

Many people make the mistake of saving and investing whatever is left over at the end of each month. The smart approach is to ‘pay’ into your investment/savings accounts each month just like you would for a bill.

Try this process for spring-cleaning your savings and investments:

Savings & Investments – Emergency Fund

Savings & Investments – Investing Plan

Savings & Investments – Investing Plan

Savings & Investments – Investing Plan

Savings & Investments – Making Changes

Savings & Investments – Invest Automatically

Savings & Investments – Get Expert Help

Credit

Reviewing your credit report and making the necessary corrections is important. A poor credit score results in higher interest rates on loans, including home loans.

A poor credit report can even inhibit your ability to find a job. More and more employers are looking at credit reports before making hiring decisions.

Take these steps once a year to keep your credit report in good shape:

Credit

Get copies of your credit reports. The three major credit bureaus will provide one free copy of your credit report each year. You’re also entitled to a free copy if you’ve recently been turned down for a loan or credit card.

Get your credit scores. Your credit report typically doesn’t include your scores. Get your official scores instead of estimations. The best interest rates go to those with credit scores above 720.

Credit

Nearly every credit report contains errors.

Challenge any negative information in writing. While the credit bureaus provide a means to challenge your credit online, this helps them, not you.

Don’t make things easy on them. Send your change requests in writing and use delivery confirmation.

Credit

Be persistent. Credit bureaus want to make money by selling credit reports. They don’t want to deal with your correspondence, which only costs them money.

Keep challenging the negative information and you’ll see your credit scores improve.

Fixing your credit report errors is only half the battle. Add positive credit and develop good habits to take your credit score to a higher level.

“Adhering to budgeting rules shouldn't trump good

decision-making.”

-Emily Oster

Credit – Boosting Your Score

Credit – Boosting Your Score

Credit – Boosting Your Score

“If saving money is wrong, I don't want to be right!”

-William Shatner

Estate Planning

Who wants to think about dying? It’s not a fun topic, but it’s important. Estate planning is best done with the assistance of an expert.

An estate plan helps to ensure that your family’s financial needs are met after your death.

Review your estate planning each spring.

Estate Planning – Review Your Will

Estate Planning – Review Your Assets

Estate Planning – Other Components

Estate Planning – Other Components

Estate Planning - Taxes There are 2 primary taxes that affect estates:

Estate Planning Ensure that everyone is on the same page. Squabbles

are common when inheritances are doled out. Be sure that your wishes are clear.

The details of estate planning are best determined with an attorney that specializes in the field.

“As a novelist, I tell stories and people give me money. Then financial planners tell me stories and I give them

money.”

-Martin Cruz Smith

Conclusion

Use the spring cleaning season to get a better handle on your finances.

Start with your filing system and then work through the other aspects of your finances.

Think about how your financial situation will change for the better if you can get organized and deal with all the elements of financial planning listed here. How would your life change?