{"id":13102,"date":"2024-04-10T14:25:42","date_gmt":"2024-04-10T14:25:42","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13102"},"modified":"2024-04-10T14:25:43","modified_gmt":"2024-04-10T14:25:43","slug":"how-to-spring-clean-your-finances","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/how-to-spring-clean-your-finances\/","title":{"rendered":"How To “Spring Clean” Your Finances"},"content":{"rendered":"\n

Eva M. from Independence, MO asks:<\/em> Hello Mitch, I\u2019m one of those people who uses the transition to spring to do some deep cleaning and life organizing. This year I\u2019m adding my financial life and investments to the list of items I want to tidy up. Do you have any tips to guide the process along? Thank you, and have a wonderful spring season!<\/p>\n\n\n\n

Mitch\u2019s Response:<\/p>\n\n\n\n

I love your thought process here. In my view, it\u2019s always a good time to review your finances and investments to make sure everything looks good and on track. And while you seem like the kind of person who has already done her taxes, this time of year offers a good opportunity to get your financial life out on the table to see what adjustments you can make. As the saying goes, there\u2019s always room for improvement.1<\/sup><\/p>\n\n\n\n

Below, I\u2019ll lay out four ideas that apply to people of any age, since it\u2019s unclear if you\u2019re still working and saving or are retired, perhaps.<\/p>\n\n\n\n

    \n
  1. Scrutinize Your Cash Flow and Spending<\/strong><\/li>\n<\/ol>\n\n\n\n

    Most people should have a clear understanding of money-in and money-out each month. There are several ways to gather this data, whether by maintaining a spreadsheet, using a budgeting app or website, or simply working with a financial advisor to map out your budget.<\/p>\n\n\n\n

    Protecting Your Portfolio Long-Term<\/a><\/span><\/strong><\/p>\n\n\n\n

    Navigating market changes can be difficult for every investor, but particularly for those trying to build their retirement portfolio. I still believe it is possible to avoid the damage of economic downturns and achieve your retirement goals.<\/p>\n\n\n\n

    To help you, I am offering a step-by-step blueprint of our customized investing process to potentially help you build a sound retirement portfolio of your own. You\u2019ll get insight into key retirement planning details including:
    \u2022 Accurately forecasting your retirement income needs
    \u2022 The two phases of determining your asset allocation
    \u2022 Developing an investment discipline that allows you to get good results over time
    \u2022 Avoiding self-sabotage\u2014what you need to know
    \u2022 Plus\u2014our views on key steps to create and maintain the ultimate retirement portfolio<\/strong><\/p>\n\n\n\n

    If you have $500,000 or more to invest, download our guide today!<\/p>\n\n\n\n

    Get our FREE guide: 7 Secrets to Building the Ultimate DIY Retirement Portfolio2<\/sup><\/a><\/span><\/strong><\/p>\n\n\n\n

    The objectives here are two-fold. First and foremost, as a baseline, you need to ensure that you\u2019re living within your means. Second, I subscribe to the strategy of saving 20% of your income each month and then allocating the remaining 80% to your monthly expenses and lifestyle needs. In other words, you should be able to live comfortably off 80% of your monthly income, whether you\u2019re working or retired.<\/p>\n\n\n\n

      \n
    1. Review Your Asset Allocation<\/strong><\/li>\n<\/ol>\n\n\n\n

      Once you\u2019ve \u2018tidied up\u2019 your budget and feel good about income and spending for the next year, I\u2019d recommend reviewing your asset allocation.<\/p>\n\n\n\n

      Reviewing asset allocation every year ensures that your portfolio aligns with your short and long-term goals, risk tolerance, and current market conditions. It also offers the opportunity to rebalance investments in the event that your portfolio has strayed from your target allocation. I would also work with a financial advisor to run a Monte Carlo simulation against a broad set of returns, inflation, and cash flow scenarios to \u201cstress test\u201d your portfolio against your long-term cash flow needs and growth objectives. Zacks Investment Management could help you with this.<\/p>\n\n\n\n

        \n
      1. Check the Box of Emergency Savings<\/strong><\/li>\n<\/ol>\n\n\n\n

        In my view, everyone should have about 9-12 months\u2019 worth of income in cash\u2014whether that\u2019s in a savings account, a money market, or some other very liquid and risk-free security. If you don\u2019t have this level of cash savings, this item should jump to the top of your list of goals for the rest of the year. This cash is your hedge against the uncertainties that life surely brings from time to time, and allows you to avoid tapping your investments if an unexpected expense arises.<\/p>\n\n\n\n

          \n
        1. Establish and\/or Review Your Estate Plan<\/strong><\/li>\n<\/ol>\n\n\n\n

          In my view, everyone should at minimum have a will and a healthcare directive, but power of attorney also makes sense in many cases. Failure to create even a basic estate plan can subject your assets to probate and potentially higher-than-necessary taxes, neither of which is a desirable outcome. In addition to mitigating taxes and legal complications, estate planning protects assets from creditors and can designate guardianship for minor children or dependents. In the spirit of spring cleaning, estate planning can ensure your \u2018house is in order.\u2019<\/p>\n\n\n\n

          To further help you with your portfolio, I recommend downloading our guide, 7 Secrets to Building the Ultimate DIY Retirement Portfolio3<\/sup><\/a><\/em><\/span><\/strong>, which provides a step-by-step blueprint of our customized investing process to potentially help you build a sound retirement portfolio of your own. In this guide, you\u2019ll get insight into key retirement planning details including:<\/p>\n\n\n\n

          \u2022 Accurately forecasting your retirement income needs
          \u2022 The two phases of determining your asset allocation
          \u2022 Developing an investment discipline that allows you to get good results over time
          \u2022 Avoiding self-sabotage\u2014what you need to know
          \u2022 Plus\u2014our views on key steps to create and maintain the ultimate retirement portfolio<\/strong><\/p>\n\n\n\n

          If you have $500,000 or more to invest, download our guide today!<\/p>\n","protected":false},"excerpt":{"rendered":"

          Spring is a good time to tidy up your finances as well your home. Mitch offers some great ways to get your budget and portfolio organized and in great shape. <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-13102","post","type-post","status-publish","format-standard","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=13102"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13102\/revisions"}],"predecessor-version":[{"id":13104,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13102\/revisions\/13104"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}