The Financial Spring Clean: 5 Accounts to Review for a Prosperous Year
Much as we refresh our living spaces, it is also important to refresh our financial lives. A “Financial Spring Clean” can give us an opportunity to reflect on where we have been, and where we want to go in the new year. In this article, we will outline 5 key accounts to review when planning a successful financial spring clean.
Review your Bank Accounts
Begin with your checking and savings accounts. Are you receiving the best available rates of interest? Does your bank charge you fees which you can avoid elsewhere? Many individuals continue to utilise the same bank for many years simply because of convenience, and miss out on better terms and features.
In addition, now is the ideal time to evaluate your account structure. Do you need to create a separate savings fund for vacations or home repairs? Or perhaps you should combine several accounts into one to make budgeting easier? Consider looking at alternative banking options such as digital banks, which provide transparency, automatic savings tools and lower hidden fees.
Assess Your Investment Portfolio
Investments should be tailored to your investment goals, risk tolerance, and time horizon. Have you evaluated your portfolio recently? There is a good possibility that your asset allocation has shifted since you last did. What was suitable for your risk profile in the past may not be suitable today.
Take a look at how your shares, funds, or pensions are performing. Are they aligned with your present-day objectives? Are you over-weighted in one sector and under-weighted in others? While a portfolio evaluation does not always require major changes, sometimes just minor adjustments can have long-lasting impacts. If you are uncertain about whether you should rebalance your portfolio, a professional financial advisor can assist you in doing so, while minimising disruption to long-term returns.
Evaluate Subscriptions and Memberships
Households spend hundreds of pounds each year on services they don’t regularly utilise. Take a few minutes to review your direct debit and standing order records. Perhaps you’ve subscribed to a streaming service that you haven’t used in months, a monthly subscription to a beauty box, or your gym membership, which you only use a couple of times a year because you took up running instead. Eliminate those services that no longer fit your lifestyle and redirect the funds towards savings or experiential uses. You may also discover better package deals or discounts by contacting your existing service providers to inquire about potential loyalty rewards.
Assess Your Insurance Coverage
Typically, insurance coverage is established and then forgotten. However, your requirements evolve throughout your lifetime. For example, you may have had children, moved to a different location, or replaced your vehicle. These changes should be reflected in your insurance policies.
Verify that your home, auto, health and life insurance policies still apply to your present-day situation. Additionally, now is the ideal time to verify that your life insurance beneficiaries remain up-to-date. Your estate planner can help you complete this task efficiently and ensure that your assets are transferred outside of probate. Keeping your policies current provides you with comfort and can minimise potential delays or disputes in the future.
Review Credit and Debt
Lastly, conduct a thorough examination of your outstanding debts, including credit cards, personal loans and student loans. Are you currently paying more in interest than you have to pay? Are you eligible to consolidate or refinance some of these debts at better interest rates?
While eliminating high-interest debt should be a top priority, this process is not merely about reducing expenses. The objective of a debt assessment is to regain control and make conscious decisions regarding your finances. By establishing automatic payment arrangements, you can significantly increase your chances of achieving debt freedom over time.
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