Spring Cleaning for Your Personal Finances

By: Chris Hostetler and Kali Whitaker

You’ve cleaned out the garage and straightened your closet, but when was the last time you organized something that truly mattered? Too many of us accumulate the debris of one-time financial decisions and never clean up: an old 401(k) that you haven’t rebalanced in years, 15-year-old tax documents sitting in your desk drawer, a permanent life insurance policy that hasn’t been properly funded and the list goes on…

The good news for you financial hoarders is that with a few simple steps you can do away with a lot of the clutter. Here are some ideas to get you started:

  1. Check your credit – Most people check their credit when applying for a loan or when there’s an incident, such as the 2017 Equifax data breach. But taking a periodic look at your credit reports, spending just a few minutes a few times a year, you can prevent big headaches with an early catch of any misreported accounts or identity theft. For tips on how to monitor and protect your credit, see our previous post, “Equifax Data Breach – How You Can Protect Yourself.
  2. Update your personal budget – Yes, we said the “B” word. Budgets don’t get a lot of love, but technology allows you to set goals and monitor your spending pretty easily these days.  As an example, our Hilltop Wealth Portal, based on the eMoney Advisor platform, allows you to aggregate information from your checking and credit accounts. This enables you to track all of your spending activity in one place, with most transactions being automatically categorized for you. This takes the gruntwork out of budgeting, to give you more time to think about whether you should reduce your food/beverage spending (maybe fewer happy hours out and more at-home wine tastings with friends?).

The reward of following your budget is that you can take control of your savings (i.e. giving money to your future self).  Spending tends to happen on its own; but the act of saving needs a little bit of discipline and intention.

  1. Use a safe online document storage tool – We mentioned that spending has a way of happening on its own … well, paperwork has a way of accumulating on its own too. Whether it’s your 2002 tax return, this month’s credit card statement, or that receipt from Gonza Tacos y Tequila, you need a way to proactively cut through the clutter and develop a system that works for you. Decide which documents you need to keep and then select an online document storage tool that works for you. PCMag has a helpful overview of ‘The Best Cloud Storage and File-Sharing Services of 2018’. An online storage system will enable you to easily sort and categorize your documents, and it will save you a great deal of time collecting everything you need at tax time. It also acts as a kind of insurance in the event of a disaster like a hard-drive crash or house fire.

When using online tools, its important to follow online safety best practices, such as selecting unique passwords and changing them often.

  1. Set up automatic payments – There are few things in life more frustrating than being charged for a late fee, so why not avoid fees and penalties by setting up automatic payments for recurring expenses like your wi-fi bill or your mortgage. Aside from needing to update your payment card info when you receive a new debit or credit card, auto-payments require little to no maintenance, so you don’t have to worry about the craziness of life getting in the way; in the words of Forrest Gump, “that’s good, one less thing.”

       5. Use calendar reminders to help you keep track of recurring tasks, such as the following:

Annually Check your credit reports, review your estate planning documents, evaluate your insurance coverage, meet with your tax advisor to do some planning (helpful hint - not in early April, the middle of their peak season), check the beneficiary on your accounts and insurance policies
Quarterly Pay estimated taxes, if necessary
Monthly Check your budget, scan your checking and credit account for any suspicious activity, review your investment statements




*Note – Some financial advisors will have a proactive schedule for helping you take care of many of these activities.If you can get somebody to make life easier for you, do it.Delegate the stuff you don’t like to do.

spring cleaning tips for financial planning

This material is provided as a courtesy and for educational purposes only.  Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.