It’s that time of year again, the perfect opportunity to sort through your closet, clear out clutter, and downsize. While many may think “spring cleaning” just applies to their home, the concept can be used in all areas of your life! If you think your finances may benefit from a refresh, now is a great time to give it one. If you need help getting started, here are some things you may want to include in your financial spring cleaning:
- Consolidate Accounts
When’s the last time you did a comprehensive look at all your accounts? If it’s been a while, this may be the perfect time to do a full review and combine old or inactive accounts so you can see and manage everything together in one place in the future. For example, if you have 401(k)s from previous jobs, consider rolling those over into your current retirement account, or if you are 59-1/2 or older, there may be even more options. Likewise, you may be able to reduce fees by eliminating duplicate investments or streamlining bank accounts. While reviewing your investment and retirement accounts, you’ll also want to double-check that these accounts still align with your financial goals.
- Declutter Your Debt
Consider paying off high-interest debt first to save money and get started toward eliminating debt, or you may want to look into refinancing or consolidating loans for better terms. If you haven’t already, this may be a good time to set up a structured repayment plan to stay on track.
- Insurance Policy Update
Review your life, health, and home insurance coverage and adjust your policies if there have been life changes like income, dependents, or assets since your last review. Remember, the people you name as beneficiaries on life insurance policies (and retirement accounts for that matter!) take precedence over estate planning documents in most states. Also, make sure to check for any gaps in coverage so you have the most comprehensive coverage for your situation.
- Organize Financial Documents
For those who keep hard copies of financial documents, sort and store tax returns, bank statements, and investment records. Shred outdated or unnecessary paperwork. Also, consider going digital with a secure cloud account to help you easily store and access all your documents in the future if it makes sense for you.
- Portfolio Review
This is a great time to see if your portfolio needs a rebalance. Since your last review, assess if your risk tolerance and goals have shifted and if your portfolio accurately reflects that. Also, consider current market and economic conditions. With tariffs and inflation on the rise, you may want to consider moving some assets into lower-risk investments.
Spring cleaning, whether it’s sorting a tucked-away junk closet or doing a thorough financial account review, can be overwhelming. If you need help with spring cleaning your finances, we’re here! You can reach California Wealth Advisors at (805) 941-0444.
