Financial review: Spring clean your finances
With the warming weather and extra sunlight every day, comes the need to spring clean more than just your home. Now is also a great time to dust the cobwebs off your financial strategy.
1. Start with a full financial review
Conducting a financial review is different than looking at your monthly budget. Instead, you should look at all your income, expenses, holdings and debts. During this review, you can establish short- and long-term financial goals. You can also use this review to ensure your family is all on the same page financially and understands your savings and retirement strategies. A financial advisor can also help you review your financial picture.
2. Understand where your money is going
As you get started on your review, look at your monthly expenses and understand where your money is going. There might be extra services you are paying for that you forgot about, or an opportunity to call your cell phone or internet provider to see if they have any discounts available. In addition, depending on your lifestyle changes since the pandemic started, you might have some expenses that have changed like eating out or getting a daily coffee on the go. These extra funds could be reallocated to different aspects of your budget now.
3. Check in on your savings
Your emergency savings might have taken a hit during 2020 because of the impact of the pandemic so now is a great time to check your account balances and reset your savings goal. It is recommended families have around six months of expenses in savings in case of an emergency. So, if you had to dip into your funds, see if you can start to add a little bit back now. Now might be good time to reassess if you can refinance your mortgage and save some money or talk with your insurance provider to ask if your monthly bill can be lowered because you are doing less driving.
4. Check in on your debt
Take some time to review your different debts like credit cards, medical bills or student loans. Be sure to take a look at the latest legislation as some student loan payments have been delayed because of the pandemic. As you review your debt, look at your monthly budget to see if you can start making additional payments to pay down your debt faster. It is also important to stay in contact with your creditors to see if you can create payment plans or consolidate debt to make paying it off easier.
Checking on your financial picture should be a regular part of your family routine. This is a fluid plan that should change along with the twists and turns of your life. There is never a bad time to start planning and organizing your finances.
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