Each spring, I find myself clearing out closets and drawers, getting rid of clutter and rediscovering long-lost things. And every year, it reminds me how easy it is for things to become easily forgotten, and it’s important to not let this happen when it comes to our finances.
This is a great time to intentionally take the time to review your financial plans and how you’re progressing towards your goals. As part of that process, it’s important to evaluate your readiness to meet potential future challenges and unforeseen events, ensuring your financial affairs are up to date and prepared for any event.
Here are a few tips to consider when partaking in your financial spring cleaning:
Evaluate Your Goals: Our lives are constantly evolving, from our income, position or employment changes through work, our families, to our health. Any of these changes can shift our priorities and, in turn, our goals. Our goals are the keystone of our financial plans, so it’s important to evaluate as these changes occur to ensure things like your savings, investment contributions, major purchase goals or retirement dates are aligned with your current circumstances.
Create or Update Your Budget: With time, our changing circumstances can shift, resulting in new or added costs that can affect our cashflow, so it’s important to review our budget, or create a budget, to ensure your expenses are in line with your current situation and future goals.
Review Your Investments: Regularly reviewing your portfolio, at least annually, is crucial. Changes in your goals, such as nearing retirement, can affect your portfolio’s structure and income needs. Assessing your net worth helps track wealth growth, while reviewing your budget and cash flow can guide adjustments in your investment amounts to better meet your objectives.
Up to Date Key Financial Documents: Regularly reviewing your key financial documents, especially after major life events, ensures they reflect your current priorities and circumstances. Key documents can include:
- Will: Update to reflect changes in estate settlement, executors, beneficiaries, and legacy management.
- Power of Attorney (PoA): Choose someone trustworthy to manage your financial affairs if you’re ever incapacitated and clearly communicate your wishes.
- Healthcare Directive: Specify your health care preferences if you become incapacitated, including end-of-life decisions.
Spring isn’t the only time we should be checking in on our finances, it’s important to regularly review, and update accordingly—but this time of year serves as a great reminder! Be sure to check in with your financial professionals if you have any questions or need any guidance or assistance.
