As the seasons change and winter turns to spring, it is a great time for you to reset and clean out for the new season. While it is a great time to catch up on household chores you might have neglected, it is also a great time to revamp your finances.
Here are three ways you can add your finances to your list of things for spring cleaning.
1. Pare down
A lot of people are guilty of building up their investments and not knowing exactly what they even have. As you spend the springtime getting rid of excess things around the house, you need to apply the same principle to your finances. Make sure you are making good decisions to positively affect your financial position.
The first step is to take a good look at what you own and how you use each item. After going over your financial goals, both short and long-term, you will be able to identify which investments will help you achieve each goal. If the investments you have don’t serve any purpose or help you get closer to your goals, consider getting rid of them in your quest to de-clutter.
2. Check the fit
As you clean out your closet, you often times have a pile of clothing items that you aren’t sure if they fit or not anymore. You can apply the same idea to your finances, and take the time to make sure each investment you have still fits with your goals and your budget. The best place to start is by looking at an overview of your finances. As life happens, oftentimes our plans change. If your allocations no longer “fit” with your long-term goal, then get rid of them or change things up.
Some investors use the same exact plan for years at a time. The simple fact of it working in the past does not mean it is right for the future or the year to come. You need to constantly be reevaluating and changing things up so that you are making relevant financial decisions to your situation at hand.
3. Embrace the new
In the springtime, flowers are blooming and the new and freshness is appealing to just about everyone. Apply this same idea to your financial situation. You should be constantly working to put money away for retirement or college funds for your family. A good rule to go by is to save 10% of your gross income for various savings purposes. If you are not used to putting money aside, perhaps it is time for you to embrace this new way of dealing with your finances. Research and make choices that will help you along your financial journey, and be open to trying new things along the way.
Paring down, checking the fit and embracing the new are a good starting platform for your financial spring cleaning. Be sure to talk with a professional if you need help or guidance on your journey to being more successful and prepared for life. Having your finances in order is necessary in keeping your stress levels low and living your best life possible.