5 Easy Steps to Spring Clean Your Finances

The signs of spring are all around us: it’s finally getting warmer, flowers and trees are starting to bloom and the NCAA basketball tournament is in full swing.

With spring comes the annual ritual of spring cleaning that has diligent homeowners repairing damage left from the harsh winter, getting rid of unnecessary belongings and scrubbing their homes from top to bottom. It sounds awful, but it’s an annual rite that all homeowners have to do. Right?

Wait...you don’t do an annual spring cleaning at your house?

Well, I’ll let you in on a little secret: we don’t either. My wife and I try to keep our house in good shape year round, eliminating the need for major spring cleaning. Yes, we still have to do a few chores like changing window screens and the typical yard work, but no major effort is required.

This year-round plan also applies to keeping your personal finances in order.

If you have a solid financial maintenance plan in place, you may not need a massive spring cleaning of your finances. But if you don’t, here are some tips to make your financial spring cleaning easier and more effective:

Review your Financial Goals

Now’s the time to review your financial plan and make sure your goals are still valid and reflect your current life situation. If they are still applicable, update your progress and increase (if possible) your contributions in areas you are lagging.

Now's also a good time to check on your investments and make any changes to maintain the proper risk/return balance.

If you don’t have a goal-based financial plan, now’s the time to create one. There are many online tools available to help create a plan for you or find a fee-based, independent advisor to help you.

Review/Update Your Wills, Life Insurance Policies

Nobody really wants to do this, so once a year pull out your will and your life insurance policies and make sure everything is in order and still accurately reflect your desires and needs.

For your will, check to see that you have the most appropriate individuals designated to serve as your executor and your trustee--especially if you have children. (NOTE: you may need to talk to an attorney if you want to make changes)

For your life insurance, check to make sure the amounts in force will still provide adequate coverage, and make sure you have the appropriate beneficiaries designated. Contact your insurance company if you need to make any changes.

Review Your Credit Reports 

Pull your credit report and review it carefully, you might be surprised at what you find.

Check for inaccurate information like debts that are listed as outstanding rather than paid, as well as out-of-date credit cards or loans that haven’t been reported as closed.

Check for any negative reports from creditors-- if you have any, do your best to remove them if they are incorrect or resolve legitimate claims.

Do Your Taxes and Review Monthly Withholdings

Don’t wait until April 14 to do your taxes, it causes unnecessary stress and the rush may lead to errors on your return.

Do your return now so you can see if you overpaid or underpaid on your taxes during the last calendar year. If you’re getting a big refund, you probably overpaid on your withholdings, so think about reducing the amount you have held from your paycheck each month and direct that money toward your financial goals instead. Don’t make an interest-free loan to Uncle Sam if you don’t have to.

Review Your Charitable Giving Plan

Anytime you review your broad financial goals, you should also reassess your charitable priorities. If you already have charities you support, evaluate your commitments for the coming the year: should you increase/decrease donations? Do you have new priorities?

If you don’t already have one, create a charitable giving plan. These plans are easy to create: identify causes and charities that are important to you and form a realistic plan for how you can donate time and money. 

Bryan Link is the CEO and co-founder of SimpliFi, an online consumer financial planning service designed specifically for middle-class consumers. SimpliFi has won several awards and was named Fast Company’s Top 10 Most Innovative Companies in 2010. Bryan’s expertise in personal finance has led to him being featured in a variety of print and broadcast media, including ABC News, FOX Business and The Wall Street Journal.