Spring is often associated with renewal and rejuvenation, and as the season approaches, it’s not just your home that could benefit from a thorough cleaning — your finances could use some tidying up too. David Smallwood, a financial advisor with Northwestern Mutual, shared some valuable insights with GOBankingRates on how to whip your finances into shape this year.
Tips for Financial Organization
Refresh Your Budget
Your budget should be a dynamic tool that evolves with your changing expenses and financial goals. Smallwood advises taking the time to review your income and expenses regularly to ensure they align with your objectives. Set clear, achievable financial goals for the year, breaking them down into manageable steps.
If holiday debts are lingering, consider using Q1 bonuses or tax refunds to tackle them before mid-year. And don’t hesitate to seek guidance from a financial professional if needed.
Purify Your Financial Habits
Small, forgotten expenses like subscriptions can quietly drain your budget. Identify and consolidate or eliminate unnecessary subscriptions to free up funds for more important priorities. Regularly review your digital subscriptions to avoid getting locked into ongoing payments for forgotten trials.
Organize Your Documents
Maintaining financial organization is crucial. Gather essential documents like bank statements, tax returns, and insurance policies, keeping physical copies in a secure location at home or in a bank safe-deposit box. Additionally, store encrypted digital copies in a secure cloud storage system. Designate a trusted confidant with access to these documents for added security and convenience, especially during tax season.
Streamline Your Investments
Regularly review your investment portfolio to ensure it aligns with your financial goals. Smallwood suggests taking a closer look at your investments around tax time to identify opportunities for tax savings based on their performance over the previous year.
Use the Right Tools
While online platforms, robo-advisors, and financial apps can be helpful, Smallwood emphasizes the importance of working with a financial professional. A knowledgeable advisor can provide personalized guidance and support tailored to your individual needs and goals.
If you’re not ready to engage with a financial advisor yet, leverage these tools to analyze performance and make informed decisions while considering partnering with a professional in the future.
Setting Yourself Up for Financial Success
Following these steps and seeking guidance from a trusted financial advisor can lay a solid foundation for your journey toward financial prosperity. With careful budget refreshing, purifying your financial habits, organizing essential documents, streamlining investments, and utilizing the right tools, you can set yourself up for success.
A financial advisor offers personalized insights and strategies tailored to your unique financial situation, helping you navigate challenges and capitalize on opportunities. By taking proactive steps and leveraging expert advice, you can confidently manage your finances and ensure they remain in optimal condition throughout the year, paving the way for long-term stability and growth.
