Spring Cleaning

Spring is the air and it’s time for thinking about things associated sunshine and warmth such as sandals, floppy hats (for us southern women), and spring cleaning. Yes, spring cleaning, that age-old tradition of cleaning and airing out everything from the storage closet to the attic in order to let the fresh air and sunshine lift our spirits and cleanse our souls. A little cheesy sounding, yes, but admit it, you know exactly how good it feels to open the windows and just soak it all in!

This year spring cleaning was and continues to be on the top of my “to-do” list. However, my spring cleaning list was doubled due in part to my husband’s and my Georgia rental home being vacated by the tenant and our decision to put the home up for sale. Faced with the overwhelming task of cleaning two homes, I needed to prioritize my action list into what I needed to clean up, clear out/throw away, or organize for future use.

The same spring cleaning action list applies to our finances. If you don’t already have a plan or work with someone who has helped you create a plan, here are a few simple spring cleaning tips to get started:

1. Clean up:

• Review your savings plans and automate your monthly savings. Participate in available employer retirement plans (try to contribute the minimum amount needed to get the full company match, if available.
• Review your portfolio allocations and rebalance according to your targeted stock to bond ratio. Also look to see if it makes sense to clean up your investment accounts by reviewing all of your accounts as one “family allocation.” Does it make sense to own the same 10 funds in all 5 accounts?
• Clean up your estate plans by ensuring the named guardians, beneficiaries, executors, and trustees are still appropriate.

2. Clear out/throw away:

• Consider clearing out small debts, especially small debts with high interest rates. This also cleans up your monthly cash flow.
• Consider throwing out old credit cards that are no longer used and could be targets for identity thieves. Send a certified letter to the creditor, and then cut up the card after receiving confirmation that the account was closed.
• Shred old financial records. Some records need to be held longer than other, but many can be thrown out after one year (click here for a good list).

3. Organize for future use:

• Create summaries of assets owned/debts owed, insurance policies held, and estate plans. Put together a list of agents to contact.
• Tell a trusted person the location of your documents including a way to locate password protected online accounts.

There is a peace of mind that comes with spring cleaning our homes and our personal finances. It might not smell of sunshine and lemonade, but an annual review provides a clear financial picture and hopefully allows you to fully enjoy your summer plans.

Amanda Howerton, CFP® CDFA® is a Financial Advisor for Rather & Kittrell.