Time to Spring Clean Your Finances!

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While you’re busy preparing for the warm summer months, why not clean your finances this spring as well? Spring is the perfect time to prepare your finances for the upcoming year! Here are some common areas to spend some time on:

Take a Good/Fresh Look at Your Budget and Financial Position

• Your Monthly Budget – Your budget ultimately needs to give you three numbers: how much is coming in, how much is going out, and what’s left over. There are lots of ways to arrive at those numbers. What’s important is that you have them and that you keep them updated. As a Clover Leaf Wealth Strategies client, you have access to free budgeting software inside your financial plan. Ask for help if you do not know how to access this great tool!
• Your Emergency Fund – An emergency fund is our buffer against disadvantaged borrowing, like from credit cards or investment accounts or unexpected loss of income. It’s the first thing we check when we evaluate a new client’s finances. That’s because it’s the first step in building a sustainable household cash management plan. We recommend at least three months of your expenses in one account you can easily access if the need arises. Another 3 months of expenses can be less liquid, but available!
• Debt – Request your annual credit report to see your credit score and check for any outstanding accounts with balances (or accounts you don’t recognize). If your balances are more than three times your monthly expenses, try this strategy. First, write down the lender, the total amount borrowed, and each loan’s interest rate. Prioritize unsecured loans (like credit cards) over secured loans (like a mortgage or car payment) because the interest rates tend to be higher. Then, start paying off the accounts with the highest interest rates first.

Insurance Isn’t Something to Purchase and Forget About Until We Need It

Spend a morning making a list of each policy, then be sure you can log in to check that the personal information is correct for each. Then, bookmark each policy’s page on your web browser so you can find it again!

Here are some common insurance policies to check:

• Life Insurance – As a rule of thumb, it’s best to reassess your life insurance coverage annually and make sure beneficiaries are up to date. Everyone who pays a mortgage or has dependents should have some life insurance. Life insurance can help cover mortgages, college tuition, funeral expenses, and even income in the event of premature death. You can read more on Life Insurance in a previous article on our website: September is National Life Insurance Awareness Month – Clover Leaf Wealth Strategies
• Homeowners Insurance – An annual check-in on your homeowners’ insurance is always a great idea. Nearby home sales, a renovation, new fixtures, and a whole lot more can impact the value of your residence. If it’s not documented, it could lead to a gap in coverage if something happens to your house or belongings.
• Car Insurance – There are a few ways to save some money on car insurance. First, see what discounts you qualify for if you bundle. If you and your spouse have different car insurance companies, see what value you may get if one company coves you both. See what raising your deductible does for your premiums. More out of pocket usually lowers your rates. Also, try paying semiannually rather than monthly. Lastly, update your annual mileage estimate! Car insurance premiums are based, in part, on the number of miles you drive.

Take a Look at Recurring Subscription Fees

Whether it’s a wine club, a streaming service, or a discount flight finder, subscription services have propagated over the last few years. Take a close look at your monthly budget to find any recurring subscription fees. Here are three ideas for spring cleaning your subscription services and helping your budget:

• Review your monthly entertainment subscriptions – With so many streaming services to choose from now, it’s easy to have your monthly entertainment bill meet or exceed your old cable bill! Go through your budget to find all your entertainment subscriptions and add them up. Based on the total, see if it makes sense to keep them all, cut a few, or cut them all.
• Review your Meal-in-a-box services – Preparing your own meals with ingredients purchased at the local grocery store is cheaper but takes more time. Meals-in-a-box services like Blue Apron, Home Chef, HelloFresh, and Purple Carrot have all sprouted up over the last few years. These services can help you save money if you eat at restaurants frequently (over three times a week) but can add up quickly. If you subscribe to more than one, pick your favorite and cancel the rest. The same goes for wine clubs!
• Choose your news – Some premium or add-on subscription services can look like their parent subscription. Audible is a good example. Other news and information subscriptions often have low introductory rates that increase later on. Newspapers, online magazines, and other news and information subscriptions can quickly add up! Pick your favorite and cancel the rest.

Spring is the perfect time to get your household’s finances in pristine condition. We hope you will spend some time reviewing the areas above. Maybe you will even find some extra cash for a summer vacation? Please reach out if you have any questions. As always, we are here to help!

**The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.