Ryan A. Dunn, CFP®
How to Kickstart Your Financial Spring Cleaning
Updated: May 19, 2022
Make sure insurance policies and estate plans are up to date and have no gaps.
Consider ending those subscription you haven’t used in a while.
With interest rates raising, be more aggressive about paying off debt.
Check your credit report for errors at least once a year.
Now that taxes are behind us, you’re probably doing some landscaping, cleaning out the garage and getting the house ready for summer. But many people don’t think about another important spring-cleaning chore that can prevent thousands of dollars in damage if done regularly -- your financial spring cleaning. For many people, the hardest part is just getting started. Once you do, you’ll enjoy the same peace of mind you get from having a tidy lawn, well-organized garage and well-maintained home. Here are some areas to consider reviewing every year:
1. Review your estate plan.
It is good practice to review your estate plan documents every year or so to make sure your wishes have not changed. Have you changed your mind about giving to certain charities? Have agents on your healthcare directive or power of attorney moved away to where they might not be able to have an active role in making decisions if you become incapacitated? Have thoughts on your guardians for your children changed? Those are some things you may want to consider and discuss with us or your estate planning attorney if a change needs to be made.
2. Review your subscriptions.
If have subscriptions or memberships you’re not using much, this may be an area to look for saving. Haven’t turned on Netflix in a few months? Haven’t been to the gym in a year? Take some time to seriously consider if you want to continue to use these services. If you’re not getting enjoyment from them or not regularly utilizing them it may be time to hit the cancel button.
3. Consider large expenses.
Do you have any major trips planned for later in the year? Need to replace the fridge or other appliances? Planning on doing renovations around the house? Make sure to let us know so we can ensure you have sufficient cash is available for your upcoming cash needs.
4. Unclaimed property.
Not many people are familiar with unclaimed property and the benefits it provides. Think of it as a lost & found for financial assets. Each state’s treasury manages their own unclaimed property division which allows you to search for property of your own or loved ones that have passed away. Let's say a loved one owned stock in a reinvestment plan. They moved away and forgot about this stock. If the reinvestment company was not able to contact them after a period of time, this stock would be sent to unclaimed property. If they since passed away you can file a claim to receive these benefits. If you’d like more information, the NJ Unclaimed Benefits search can be found here - https://www.unclaimedproperty.nj.gov/. Other states can be found by typing “unclaimed property [your state]” in your favorite search engine.
5. Insurance policies.
It’s good practice to review your homeowners, automobile and umbrella policies every few years. If it seems like your rates have been going up consistently, year-over-year, it might be time to shop around. 6. Bank accounts.
Periodically check your bank accounts to make sure you’re not paying unnecessary fees for services you don’t use or for not having a certain minimum balance. With interest rates rising, your bank should be adjusting the interest it pays you commensurately. On the flip side, if it seems like you have an excess amount of cash in your bank account let us know and we can discuss how to deal with that additional cash.
7. Potentially pay off variable interest debt more aggressively.
Keep an eye on variable interest rates tied to your home equity line, adjustable-rate mortgage and other loans that adjust when the Fed Funds rate is revised. If you have a large balance on a HELOC we will want to review your options at our next meeting.
8. Shred outdated financial documents. Shred important documents (e.g. tax returns/bank statement, brokerage statements) after X years. Don’t just toss them in the trash since you have account numbers, birthdays, Social Security numbers exposed. Don’t have a shredder? Don’t worry. Shredding documents is just one of the many concierge services we provide free of charge to our clients.
Download our document retention guideline for more insights on what to keep and how long to keep it.
9. Review your credit reports. You should check your credit report every year to correct any factual errors and to make sure hackers are not using your identity to set up phantom credit in your name. More often than not there are errors – and not in your favor. Services such as Annual Credit Report.com will provide you with the ability to check your credit report at the 3 credit agencies, Experian, Equifax and TransUnion.
Conclusion Now is a great time of year to do some pruning on the many branches of your financial life. If you or someone close to you has concerns about any of the 9 areas above, don’t hesitate to reach out. We’ve helped many clients like you in similar situations.
RYAN A. DUNN, CFP®, is a Wealth Manager at Novi Wealth