Lynn MacNeilManaging Your Money

 Springtime brings out in many people the urge to clean and refresh. The natural world revives and reinvigorates after the colder winter months. It’s a season that symbolizes starting fresh and starting over. For some, this will mean cleaning out the closet, Tupperware cupboard or even the whole house. For others, it could mean resetting and refreshing their health habits and taking advantage of the extra sunlight and increased energy to get more active. But it’s also a good time to Spring Clean our finances!

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Clean up your accounts

Fraud has become so rampant in our digital world that everyone can be a target. It’s never been more important than now to keep on top of your accounts – from bank accounts to credit card accounts to investment accounts. An annual financial spring cleaning can help with this process. Take inventory of all that you have. Holding several bank accounts or credit cards at different institutions can make your financial life feel disorganized. It can make it harder to spot fraudulent transactions quickly. Consider consolidating your accounts with fewer institutions to gain a clearer picture of your finances and overall wealth.

If you have multiple debts, it could be a good idea to think about debt consolidation. In addition to saving you money, paying off all of your debts with a single loan at a fair interest rate gives you one easy payment date every month. As a result, there may be less stress related to money.

“Insurance is something we buy hoping we’ll never need it, but we are extremely grateful to have it when the unexpected arrives.”

Reduce the paper

More and more financial institutions are making the switch to “paperless” statements – and it’s a win-win decision. Go digital and save money (some banks charge small fees for paper options), be eco-friendly and reduce the paper clutter in your home. You can choose paperless options for credit cards, loans, brokerage accounts, and even bills. Since your statements are all in one spot when you receive them online, keeping track of your finances is much easier.

For anything that you continue to receive in paper form, consider scanning it to reduce clutter.  To determine how long particular documents and statements should be kept, refer to our “Document Organization Checklist” on the Useful Tools page of our website.

Review your monthly expenses

Go through your bank and credit card statements and dump monthly subscriptions and memberships that you’re no longer using.  While you’re at it, take notice of any areas where you may be overspending or wastefully spending, and make a point to cut back.

Springtime is as good a time as any to review your budget and look ahead to upcoming expenses.  Need a new roof or air conditioning unit? Is your mortgage renewing soon at a higher rate? Big vacation coming up? Check-in to see how cash flow looks for the rest of the year and make necessary adjustments. Refer to our Lifestyle Expense Worksheet under Useful Tools on our website. If you’re pre-retirement, more money needs to be coming in than going out. If you’re post-retirement, you want to ensure the money going out is not going out too fast relative to what you have.  Running out of money tends to be one of the biggest concerns as people age, regardless of how much money they have.  A comprehensive retirement plan can eliminate or ease that type of financial anxiety.

“Go digital and save money, be eco-friendly and reduce the paper clutter in your home.”

Put excess cash to work

As you’re taking inventory of your bank accounts, notice if you have excess cash. Whether it’s for an emergency fund, vacation, or simply a rainy day, make sure it’s working for you. In today’s high interest rate environment, you should be able to get close to 5% on a guaranteed high interest savings account. For more on high interest savings accounts, see my November article.

Plan for next tax season

You may be wrapping up this year’s tax season, but there’s no better time to start preparing for next year’s tax season. Trust me – you’ll thank yourself next year! Start with an envelope or file folder labeled ‘Taxes 2024’ and use it to collect all the miscellaneous receipts and slips you get throughout the year, especially medical, educational, deductible expenses, etc.

Last month’s article discussed some intermediate tax strategies. Don’t wait until tax season to implement strategies to reduce taxes – by then it’s too late.  Implement tax strategies now, to reap the rewards at tax time.

Take inventory of your insurance coverage

If you haven’t done it in a while, take the time to review your different insurance coverages, from your home and car insurance to your life and disability insurance. At each stage of life, there are different types of insurance coverage that a family may require. Take the time regularly to check in and see if you’re properly protected with an Insurance Needs Analysis. And while you’re at it, it’s a good opportunity to review the beneficiaries on your life insurance policies to ensure that they are still valid.

Of course, insurance is something we buy hoping we’ll never need it, but we are extremely grateful to have it when the unexpected arrives. Two years ago, I did a review of my home insurance and realized that I only had basic water damage coverage. I added an additional protection rider, and less than nine months later it was that rider that covered a flood in my basement.

“Springtime is as good a time as any to review your budget and look ahead to upcoming expenses.”

Spring Cleaning our homes generally leaves us feeling a sense of lightness and freedom.  Financial Spring Cleaning can multiply that feeling exponentially, but also protect us from financial loss and reduce financial anxiety.  Take the opportunity to check in with your banker or wealth manager to ensure your financial house is tidy and well-organized.

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Lynn MacNeil, F.PL., CIM®, is a Wealth Advisor, Portfolio Manager and Investment Advisor with Richardson Wealth Limited in Montreal, with over 29 years of experience working with professionals and pre-retirees. For a second opinion, private financial consultation, or more information on this topic or on any other investment or financial matter, please contact Lynn MacNeil at 514.981.5796 or [email protected]. Or visit our website at www.EphtimiosMacNeil.com.

The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson Wealth Limited or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. Richardson Wealth Limited is a member of Canadian Investor Protection Fund. Richardson Wealth is a trademark of James Richardson & Sons, Limited used under license.