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It’s Spring, time to clean up your finances

It's possible that more than your house that can use Spring cleaning. If you are like most people, your finances could probably use a little work as well.  Now is a great time to start and the most of the items on a financial Spring cleaning list can be completely in less than 30 minutes.
What is one of the most likely areas that needs a little Spring cleaning?
For almost everyone it is their budget and it primarily comes from being new to budgeting or they haven’t really updated their budget since creating it several years ago. No gets a budget right the first time and your budget does change through your lifetime.
What advice do you have for cleaning up the budget?
It starts with an honest evaluation of your spending which can only come by reviewing your past history.  Use your past performance as a guide for where your budget numbers should really be.  If you are spending $100 per week eating out, then budget that amount. Don’t set it at $25 if you are really not going to change your habits.
Should consumers review the rates on their loans regularly?
It is always a good idea to check rates, especially if your credit score has improved in the last couple of years. Make sure the cost of refinancing any debt is covered by the savings you will get with the lower rate.  This applies to all of your debt: mortgage, auto loan, credit cards.
What is an area this most overlooked in someone’s financial life?
Without question it is auto and homeowners or renters insurance premiums. We often shop for the initial quote and then never review our policy to get additional discounts or shop the coverage to see if our rate is still the best.  It is very easy to comparison shop and this is something that doesn’t require significant time to save a lot of money.
Are there any Spring cleaning chores for someone’s investments?
There are two very important annual tasks for your investments. The first is portfolio re-balancing. Most people have a diversification strategy for their investments, however, over time the planned mix of investments is often not reflected in their portfolio holding.  Rebalancing requires you to shift your holdings to match your planned diversification percentages.
The second important investment task is…
This one can be done every 3 – 5 years because it involves reviewing your risk tolerance and making sure your investments reflect how risky you want your investments to be versus the reward you will receive. Life changes and life stages often drives the level of risk we are willing to accept in our investments.
Are there any estate planning items that should be part of this Spring cleaning effort?
The most important are related to changes in your family situation, if you have gotten married, divorced, added children – then you should make sure you have updated your will and also updated your beneficiaries on your investments and life insurance.
Are any of these activities time consuming?
Most of them can be rather quick, maybe 15 to 30 minutes of your time.  There are a couple of items on this list that will be more time consuming but they are probably the most important to make sure that you complete on a regular basis.

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