Spring Cleaning for Your Finances- 6 Steps to Get Your Financial Household in Order - United Benefits

Spring Cleaning for Your Finances – 6 Steps to Get Your Financial Household in Order

While the cold of winter is not over for many regions of the country, spring is officially here on the calendar anyway. The season of spring is a time for rebirth, and many people use this time to do deep cleaning of their homes or perhaps to refocus on their health through diet and exercise. But it’s also a great time to review your financial life by reviewing your goals and objectives while organizing your finances.

Importance of Annual review.

When was the last time you reviewed your financial plan? Or maybe it’s time to write down your goals and develop a financial plan for you and your family. Whether you have one or not, reviewing all of your financial accounts at least once a year is essential.  

Six steps for spring cleaning.

  1. Set your Goals – When would you like to retire? Are you saving for a new home or automobile? Maybe it’s time to pay off some debt. What about a college savings plan if you have children? Before you develop a plan, you must know where you’re going. So ask yourself these questions, then write out your primary financial goal for the year along with any secondary objectives.
  2. Gather and organize all your financial statements – Now, it’s time to look at some numbers and see where you are in your financial journey. Locate a recent copy of your Leave & Earnings statement and review your pay and deductions. Is there anything that stands out? Maybe you need to put more into your retirement plan, or perhaps you’re paying too much for FEGLI life insurance. Some of these costs increase every five years, so it’s important to know what you are paying and if it’s still what you need. Next, we want to look at annual statements from all your other accounts. TSP & 401k/IRA, Savings accounts, Life insurance, mortgage, and any others related to your financial life. This is also an excellent time to review each account’s beneficiaries and ensure they are up to date.
  3. Financial Inventory – Next, we want to do a financial inventory, basically what you “own” and “owe.” On one side of a paper or electronic spreadsheet, list everything you own that has value. Your home, checking/savings, retirement accounts, land/rental properties, etc. On the right side, you will want to list everything you owe (mortgages, car loans, credit cards, student loans, and any other debt.) Now, add up the left side and subtract the right, and this will give you a basic breakdown of your current net worth.
  4. Income Planning – what is coming in vs what is going out. This is the budgeting step, and it’s often overlooked. Again, let’s take a sheet of paper or spreadsheet and list all monthly income on one side (salary, disability benefits, pension, rental income, etc.). Conversely, we want to list all expenses (mortgage or rent, utilities, debt repayments, insurance, food, medicine.) Are there any areas that you need to cut down? Or maybe you have money left- where could that go into savings or investments?
  5. Adjust your Savings Goals – Now that we know where you are financially and where you want to be in the future, it’s time to make some adjustments. You should have all the information necessary to formulate or adjust your financial plan based on the prior steps. 
  6. Don’t go it Alone – Having someone to help you formulate your plan and implement it is vital to your success in achieving your financial goals. So reach out and tell us where you need help.

Reach Out for Expert Assistance

If you are needing budgeting or financial planning assistance, United Benefits is here to assist. Contact United Benefits for expert guidance and support.

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