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While you're doing your usual spring cleaning routine, don't forget to do a financial "spring clean" as well! This is a great time to check in and make sure there aren't gaps in your financial plan. For those of us still quarantined at home, what else are you going to do?!
Your finances deserve routine attention (likely doing a monthly budget), but there are some aspects we rarely think about. Taking time to check in once a year can pay off substantially in the long term.
Carve out a few hours, and let's get to work.
TAKE A LOOK AT YOUR...
1. OVERALL SAVINGS RATE
- Review your past budgets. If you don't know what your overall savings rate is, now is the time to calculate it. If it's not where it needs to be (everyone should be hitting a minimum of 15%), figure out where you can make changes moving forward.
2. HOME AND AUTO POLICIES
- Make sure you aren't underinsured. If you're comfortable with your current policies, shop around for new quotes again. You may be surprised with how much you can save.
3. LIFE INSURANCE
- You should absolutely be insured if you're married or have any dependents (until you have a large enough nest egg that your family would no longer need your life insurance). This should be 10-12x's your income in term life insurance. While you're at it, make sure your family knows where important documents like your will and life insurance policies can be found.
4. OVERALL INVESTMENTS
- You should know what funds you are invested in, what percentage of your investments are stocks vs bonds, and the rates of return you are getting. Review your retirements accounts, and anywhere else you hold investments.
5. "IMPORTANT DOCUMENTS"
- Review your files. If you're done with your taxes, shred what you can from the previous year. Make sure you are keeping relevant paperwork in a safe place, especially papers you will need when it is time to file your taxes (I use TurboTax).
6. MONTHLY SUBSCRIPTIONS
- Americans have TONS of monthly subscriptions between streaming services, gym memberships, shopping services, grocery delivery, wine of the month club, etc etc. If you aren't using it, discontinue it. If you find you're still in debt and struggling to make ends meet, discontinue everything you can live without (which is probably all of them).
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