Give your finances a spring cleaning
12 economic moves you can make this year
Spring cleaning can mean tidying up your wallet or pocketbook, as well as your closet.
In the spirit of renewal, here are 12 financial moves you should make this spring. Some are annual rituals, or should be. Others are tasks we tend to put off, but shouldn’t.
Revisit your resolutions
Many of us set New Year’s resolutions for 2024 around spending and saving, borrowing and earning, but fewer of us followed through on them.
“For a lot of people, a top money goal was paying off credit card debt or starting an emergency fund,” said Kimberly Palmer, a personal finance expert at NerdWallet. Spring is “the perfect time to see if you’re making any progress,” she said.
And what if you’ve made zero progress?
“For those of us who fell off track, there’s something called a reset button,” said Ashley Folkes, a certified financial planner in Birmingham, Alabama. “Spring offers the perfect opportunity to restart where we left off, without dwelling on regrets.”
Clean your financial ‘junk drawer’
Spring offers a chance to sort through that drawer – or box, or unused corner of the dining room table – where you stash financial paperwork to deal with on some unspecified future date.
Working through the neglected papers is a great way to ease financial stress, he said. Throw some away. File some away.
Start a 2024 tax folder
Speaking of papers: If you haven’t already, consider setting up a folder to stow all your tax documents for 2024: receipts, donation forms, and anything else you need to report or plan to deduct. Better still, set up one real folder, and another on your laptop, says Jeff Farrar, a certified financial planner in Shelton, Connecticut.
Watch that withholding
While you’re at it, look at your W-4 form and make sure you are withholding the right amount of your paycheck.
“Since taxes are on our mind, with April 15 coming, why not get better prepared for next year’s taxes?” Farrar said.
Talk to your tax preparer
More broadly, spring is a great time to have a conversation with the person who prepares your taxes.
“Aside from housing, taxes are most people’s largest annual expense, so it deserves more attention than pulling together your W-2 and 1099s” and sending them in, said David Flores Wilson, a certified financial planner in New York.
“Our advice is to have a thoughtful, proactive conversation with an accountant, CPA, or financial planner after the spring tax deadline so that you can strategize what you can do the rest of the year to lower your taxes prior to next spring,” he said.
Max out your retirement plan
You can contribute to an IRA up to April 15 and have the money count toward your 2023 savings. The contribution limit for 2023 is $6,500 if you’re younger than 50, $7,500 if you’re older.
Even better, get an early start on contributing to your IRA for 2024. The longer the money sits in your retirement account, the longer it can accrue interest.
Spring is also a good time to challenge yourself to contribute to a workplace 401(k), Wilson said.
Not saving for retirement? Now is a good time to start.
Name your beneficiaries
Most retirement plans and life insurance policies include beneficiaries: The folks who get the money if you die.
Many of us procrastinate in naming them. In the spirit of spring cleaning, why not name them now?
Dust off your estate plan
Speaking of beneficiaries: Anyone with an estate plan should review it every year, or at least any year when a major life event plays out, experts advise.
“An estate plan isn’t something you can set and forget,” Ryan said.
Consider whether you need to update any part of the plan, including your beneficiaries.
Book your 2025 vacation
Setting up vacation plans a year early saves money and gives you more choice of flights and lodgings, experts say. And then there’s the psychological value.
“Studies have shown the anticipation of a vacation is half the psychic value you get out of it,” said Terri Fiedler, president of retirement services at Corebridge Financial, a financial services company in Houston. “So, enjoy this summer’s family vacation, but put next year’s on the calendar, as well.”
Review your investment portfolio
“You don’t need to monitor your portfolio on a daily basis,” Farrar said, but spring is an ideal time to review your asset allocation and make sure it suits your needs.
“Check to see if your allocation of stocks vs. bonds is where you want it to be,” said Maureen Demers, a certified financial planner in North Andover, Massachusetts.
Invest in high-yield savings
Yields on savings accounts, certificates of deposit, money market accounts and other savings vehicles have been up for the last year or two, along with interest rates generally.
If your savings isn’t earning 5% annual interest, or close to it, consider transferring the balance into a highyield account.
Check your credit card
Credit card debt is rising, along with credit card interest rates. Now is a good time to take a good look at your card, especially if you carry a balance from month to month, Palmer said.
Credit card rates change over time, and lately, they’ve been going up.
If the APR on your card is rising, Palmer said, then it might be a good time to shop around for a new card.