Spring Cleaning Your Financials

Inflation, especially food costs, are likely using up more of your income. Being aware of just how much may
be useful.

Spring isn’t just about budding plants, changing the clocks, or paying your tax bill. It can be the perfect time to refresh financial tasks and dust off your long-term goals. Here are three mistakes to avoid.

Mistake No. 1: Budgeting for 2023—Not 2024

A great first step to revitalizing your budget is a moment of reflection on this year’s goals. Inflation, especially food costs, are likely using up more of your income. Being aware of just how much may be useful.

• Think vacations, purchases, new subscriptions — has your vision changed since 2023?

• Many companies have increased costs for streaming services. Maybe now’s a good time to cut one of them. Savings will add up.

• What do you envision for yourself this year?

In doing some simple fine-tuning of your budget, you may identify some fresh opportunities and a renewed motivation to stick to your plan.

Tip: Go to betterplanningllc.com to download a budget worksheet you can use to get started. It’s the same one I ask my clients to use during the fact finding process.

Mistake No. 2: Automatically Renewing Insurance

Automobile and home insurance are going up. Renewing your insurance every year doesn’t guarantee the same coverage. Don’t just accept rate increases!

• Now may be a good time to
check rates to see if you can get a better deal. Many companies give discounts for “bundling” multiple types of coverage into one payment.

• You also don’t need identical coverage for
your vehicles, your home, your health, and other insurable items.

• Take a look at your insurance coverage and your premiums before renewing in 2024. Check out the terms of your policies and ask your insurance provider about any changes from last year.

Tip: Take a look at what you can bundle and/or what incentives other insurance companies offer. If you’ve been loyal to a particular company and your premiums have gone up (yet again), now could be a great time to explore some new quotes and consider any “new customer” discounts you may qualify for.

Mistake No. 3: Losing Sight of Your Savings

• What are your biggest financial regrets?

• Most of us say not saving enough for retirement or a rainy day tops the list.

• Maintaining your previous savings and retirement contributions may be becoming more challenging as non-discretionary expenses take up more of your budget. By planning ahead, you may be able to continue saving at the same rate. If that’s not possible, you may have to reduce savings. Don’t let it get you down but keep saving some amount. Even a small amount of automatic savings adds up over time.

• This year, consider a deeper dive into your accounts, whether that means earmarking more for savings, leaving some bad habits behind or boosting your financial knowledge.

Tip: Set up automatic payroll deductions to retirement accounts and bank into your savings account every week or month. Going the automated route can help you stay the course.  Inflation, especially food costs, are likely using up more of your income. Being aware of just how much may be useful.

 

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