5 Financial Tips for Spring

Before heading out to the grocery store, do you make a list?

I’m betting that you do.

That’s because 70 percent of Americans make a list every time they go to the market.[1]

Nothing too unusual about that.

But what’s the motivation behind list making?

According to a Harvard Business School study on accomplishment, writing lists and setting goals helps you get important things done[2]. (Of course, compiling a list also helps you remember what to buy.)

But in the big picture, list making does a lot more than merely support your memory. Writing things down:

  • Makes your task official
  • Underlines your commitment
  • Reminds you to follow through
  • Gives you a visible deadline
  • Reinforces the task in your brain

So, what about making a list to help yourself financially?

If lists and goals can be used to help you organize yourself, doesn’t it seem natural to use them to help you achieve your financial goals, or to save money?

There are a few times each year that we see a major uptick in the number of callers to both our radio show, Money Matters, and to our firm, Allworth Financial. The first big increase occurs, predictably, right after the New Year.

But the second uptick is a little less obvious. We tend to see an increase in calls and appointments just after the first really nice day of the year. I assume that’s because people are physically and emotionally emerging from hibernation, and infused with a sense of urgency to get important things done.

5 Spring Cleaning Financial Essentials

Aside from getting ready for April 15th, Tax Day, what are some simple goals that I recommend you add to your spring list so you can focus on getting your financial house in order? Here are five:

1. Check your Credit Score

Each of the major credit bureaus (Experian, TransUnion and Equifax) is required by law to provide you with one free credit report a year (go to their websites to request). I would highly recommend you utilize this service, perhaps even spacing them out so you receive an updated report every 4-5 months.

Not worried about your credit because you pay your bills on time? According to Equifax, 42 million Americans have serious errors on their credit reports. These errors can take months to clear up, and in the meantime they lower your score and make car and home loans both more expensive and harder to get.

2. Consolidate Your Bank Accounts and Credit Cards

I once met with someone who had five active checking accounts and five active savings accounts, but actually only used one of each. The problem was that the various account guidelines had changed over the years, and she was being charged for low balances, paper statements, and who knows what else? For years she’d even been transferring money into these accounts just to cover the fees!

My advice is to sit down for an hour this week and review all your accounts, and then choose the ones you have to keep, and then consolidate and eliminate the rest. Add to your spring cleaning list the goal of closing all your unneeded bank accounts, and then the following week do the same thing (consolidate and close) all your unnecessary credit card accounts.

3. Shop Around for Better Rates

Nearly every time I call my cable company or cell phone provider, they lower my rate. I know of someone who recently got satellite radio in her car for an entire year for nearly the same amount she’d been paying each month. If you took an hour or two, and called each and every provider you have, including car insurance, cable, cell phone, water delivery, ALL your recurring monthly services, you could potentially save yourself hundreds or even thousands of dollars a year.

4. Get an Insurance Check Up

We don’t typically sell insurance, but we are licensed to. This makes our advisors good resources for unbiased insurance recommendations. When was the last time you evaluated your life insurance and homeowner policies? Are you nearing (or in) retirement? Are your kids out of the home? You may no longer need life insurance. What about homeowners? With the rise in home prices, will your current policy cover you in case of an emergency?

5. Review Your Investment Allocations

Your investment allocations should evolve as your life changes. If you’re thinking of buying a new house, switching jobs, transitioning into retirement, or if you’ve been retired and are drawing down your accounts, it’s important to have them reviewed regularly to make certain they are keeping pace with our ever-changing world.

For those readers with retirement accounts: Did you know that the beneficiaries on those accounts (such as a 401(k)) supersede the people you have listed in your will? When I tell people this, many simply can’t believe it. If you have retirement accounts, add “check my beneficiaries” to your financial spring cleaning list so your loved ones will be protected.

Do you have any questions or concerns about your finances?  Talk with an advisor today.

[1] CreditDonkey January 6th, 2016
[2] The Boston Business Journal September 11th, 2014