“Spring Cleaning” Your Personal Affairs This Summer

Vested Partners A Multi-Family Office Blog

Now is the time to organize your financial life

In summertime, life tends to slow down. Why not hide out from the heat, pull out your personal files, and take stock of your financial future? What should be on your list? The article “7 spring cleaning and other annual steps to get your financial life in good shape” from AZ Central gives some valuable suggestions.

Address the paper problem. Piles of paper bills, statements and other documents can easily become overwhelming. Streamline your paperwork by organizing files better and reducing what you keep. For instance, keep one end-of-year statement from your bank and investment accounts if you still get paper statements. Even the IRS is doing it—recommending keeping only three years of income tax returns on hand.

Do you need so many different accounts? If you’ve got credit cards you don’t use, do you need to have them? Don’t close the accounts if you’re about to take out a loan, as the activity could affect your credit score. However, if you can, get rid of any excess cards. Visit big credit reporting companies to learn how to close the accounts without creating a financial hiccup.

Is it time for an annual portfolio review, too? Set up a meeting with your financial advisor to review your accounts once a year to be sure they are properly balanced. Don’t have a financial advisor, or haven’t heard from your financial advisor lately? We can help you review your accounts, and if you are our client, help you allocate your investments in accordance with your goals. Don’t hesitate to contact us for help.

Check what you’re paying in fees and other expenses. This may take some digging, but you may be (unpleasantly) surprised at what you find. How much are you spending on fees on mutual funds or exchange-trading funds? If the amount you’re paying in fees is the same or more than you’re earning, you’re losing money. You can’t control the market, but you can manage fees and expenses.

Update or create your estate plan. If you don’t have an estate plan and have minor children, make an appointment with us as soon as possible. Wills are used to name guardians for children. Your will appoints a guardian for your children and names an executor who administers your estate after you pass. It can be your spouse, partner, or whoever you feel would be best suited. Without a will, a court-appointed administrator will be named and your property passes to those designated by state law. Further, using trusts in addition to wills better addresses many of our clients’ goals of avoiding administrative hassles, taxes and fees after death while providing privacy about financial and family matters. You should review your documents to keep them up to date every three to five years.

Check beneficiary designations. Beneficiary designations are used for life insurance policies, retirement, and investment accounts, some bank accounts and other assets. The person named your beneficiary will receive the asset when you die, regardless of your will. Beneficiary designations supersede any will instructions, so ensure that they are up to date.

Taking care of these matters isn’t as much fun as planting a garden or planning your summer vacation. However, knowing the business aspect of your life is well cared for will give you peace of mind so you can relax and enjoy your summer.

Reference: AZ Central (May 19, 2024) “7 spring cleaning and other annual steps to get your financial life in good shape”

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