WASHINGTON — You work so hard for others: your boss, your business and your clients. Why not hire yourself for an afternoon and spend some time working for your own benefit?
This spring, get in financial shape with the following program, which is designed to clean up your finances and set you on the right path for the rest of the year:
Look for recurring credit card charges
It’s shocking that plenty of AOL customers continue to pay $25 each month for their email account. When is the last time you looked at your credit card statement to see what recurring charges you no longer need? With more businesses switching to a subscription model, these recurring charges can add up, and oftentimes go unnoticed.
Review your will and estate documents
Your family, financial circumstances and wishes evolve over time, so your estate documents should change as life changes. If you’ve had children, tied the knot, filed for divorce, moved to a different state or any of your close relatives have passed away, now is a good time to revisit the language in your will or any trust documents. Federal and state laws also change over time, which could impact your estate plan.
Check your retirement beneficiaries
Retirement assets, such as those in an IRA, Roth IRA, or 401(k), are passed to designated beneficiaries after the account holder’s death. These beneficiaries are chosen when you first open the account, but if you didn’t pick anyone and don’t have a will, the fate of those assets could be decided by the state. Do yourself a favor and make sure that 1) there is a beneficiary listed on your retirement accounts and insurance documents, and 2) it corresponds to the person who you want to receive the assets if you die.
Pay yourself first
Many people already save money automatically through their retirement plan at work. Fewer have an automatic method to save their leftover money each month. Rather than letting cash build up in your checking account, which you may or may not feel tempted to spend, set up a high yield savings account to keep those funds segregated. Through your bank, set up recurring transfers to the savings account each month. You may be surprised how quickly the account grows.
Sign up for Mint.com
If you don’t already use a financial tracking and budgeting tool like mint.com, you’re missing out on a big opportunity to recognize and change your financial habits. Responsible spending starts with good financial habits, and Mint offers great tools for tracking and visualizing your spending over time so you can see where those dollars are going. Create a budget for each spending category (like groceries, clothing, fast food), and add alerts so that you know when you’re spending too much.
Set up auto-pay on your credit card
You can set up your credit card to automatically pay the full balance (or at least the minimum payment) each month. This can help you pay down debt or avoid any late payments that negatively impact your credit. Just make sure you keep a sufficient balance in your checking account to cover the monthly payment. It’s also a good idea to check your credit report on an annual basis. A service like annualcreditreport.com can help facilitate that. See The secret recipe inside your credit score to get a better idea of what to look for when you check it.
Review your investment allocation
Now that we’re 7-plus years into a bull market for stocks, the stock portion of your portfolio may have grown substantially. While growth is a good thing, you want to avoid taking too much risk by diversifying your investments. Consider rebalancing your portfolio to make sure you aren’t overly exposed to stock market risk. Many retirement plans offer target-date funds that can do this for you and get more conservative as you approach retirement.
You spend plenty of time working on growing your salary and furthering your career aspirations. This spring, carve out some time to examine the other areas of your finances. These steps should be simple enough to take in less than a day, and could save you plenty of time, money, and potential problems down the road.
