3 Unique Ways to Spring Clean Your Finances Spring cleaning doesn't always mean wiping up the dust bunnies. When it comes to finances, it could be as simple as making a few donations and planning future trips. BY KIMBERLY FOSS, CFP
While the rest of your house gets put in order, make sure your finances are given a good dusting too.
“ During this season, I suggest that couples take a page from their grandmothers’ books and give their financial household a good sprucing-up.”
Traditional spring cleaning seems to have gone the way of the drive-in movie. But for those of us of a certain generation, I’m sure we all can remember our mothers cleaning out the cupboards and closets as though it were yesterday, to begin the season with everything fresh and clean.
Ironically, many of us associate cleaning with drudgery, but clearing out can be a terrific stress reliever. The same spring cleaning mindset can be said about finances. Yes, many of the necessary organizational tasks—from developing a plan to pay off your credit cards to constructing an aggregate view of your net worth—can seem onerous, but once you do the work, you’ll be surprised at the satisfaction and confidence you experience.
During this season, I suggest that couples take a page from their grandmothers’ books and give their financial household a good sprucing-up. Why not follow the lead of an app I enjoy using, HomeRoutines, which breaks down chores by "focus zones" to help people target specific cleaning tasks each day. Couples can list duties for each week and identify a few "financial focus zones" to center on.
When it comes to spring cleaning ideas, sure the more traditional tasks (like reviewing your 401(k) accounts) are important. However, after these long winter months, I encourage couples to spend their time on some more engaging and rewarding financial chores. Consider the below:
Plan a summer vacation. Vacationing requires balancing your short- and long-term goals. Yes, your peak earning years should also be peak saving and investing years, but we always seek to balance saving and spending. And it could be that vacationing enables you to work longer, resulting in more opportunity to save in your 401(k)s, more company match dollars and more time on the company’s health plan. It might also mean delaying filing for Social Security—your benefit grows approximately 8 percent a year from age 62 to 70. A recent analysis by T. Rowe Price illustrates how saving during the transition years to retirement has less of an impact on your nest egg than working longer.
Many couples will decide to take a financially-manageable family trip. One family I know rented a beach house for a month. The rent seemed expensive, but when they figured that their three college-aged children could get jobs, even just for that month, the cost didn’t seem as high. Plus, the small cottage kept everyone close together.
Invest in your health. Your health is your most important financial asset. If you have failed to keep your New Year’s resolution to live better, now’s a good time to jumpstart your effort. If you haven’t joined that gym yet, check whether your health plan offers a discount or financial reimbursement for hitting the gym a certain number of times per year. Your plan might also offer discounts for acupuncture, chiropractic and massage therapy, eye care products and services, over-the-counter vitamins and supplements and weight-loss programs. Many of these extra are detailed in correspondence from insurance companies, so take a look.
Clean out your closets and drawers. Donating clothes you have not worn in years to a worthy charity simplifies your life and helps those in need, but it also gets you a valuable tax deduction. Just be sure to get a receipt and keep careful records of what you donate, including the fair market value. In addition, local childcare centers may take toys your children have outgrown. Don’t forget the garage; you can find places to donate sporting equipment, lawnmowers and snow blowers, even your son’s old car from college.
Kimberly Foss is a Certified Financial Planner and personal finance expert with 30 years of industry experience. Kimberly is the founder of Empyrion Wealth Management (Roseville, Calif.) and author of "Wealthy by Design," a best-selling book.