There’s no better time to audit your financial and digital life than tax time.
Having these two things orderly and up to date not only helps you stay organized but also gives you an opportunity to review your progress.
Review your budget
First things first. Review your budget.
Have any line items changed? Have there been additions? Maybe you paid off a debt and that line item can be dropped off?
If that’s the case, you can adjust your debt repayment plan. Whatever money was going to that paid off debt, funnel it a different one. You can do that by using one of two strategies.
One, the debt avalanche, where your dollars go to the debt with the next highest interest rate. Two, the debt snowball, where you focus that money on the debt with the next lowest balance.
Related: Your Go-To Budget Guide, How to Pay Off Credit Card Debt
Increase savings rate
If it’s been a while since you adjusted your savings rate, now is the time to see if you can tolerate an increase. Bump up your salary reduction plan an additional 1%. If you’re saving $50 per month for emergencies or your kid’s college fund, can you do another $10?
Review investment portfolio allocation
Is your current portfolio allocation still suitable? Whether or not you rebalance can hinge on two things. One, did your risk tolerance or time horizon change enough to warrant an adjustment? Or two, did your investments perform so that you’re no longer where you started?
Asset allocation tends to get out of whack when stocks perform well. 2018 is a good example, where the S&P 500 index finished up over 20%. More than likely, some rebalancing took place at the beginning of 2019.
Related: Why Asset Allocation Matters
Tighten up your expenses
Sell items you no longer have use for. You get rid of some clutter and can make a little money in the process.
Review your subscription list and get rid of things you don’t need. With so many subscription-based offerings, it’s easy to keep saying yes until you’re shelling out too much money each month. Audit these subscriptions and get rid of the ones you don’t need.
Call your internet provider. It’s more costly to acquire a customer than it is to retain a new one so they should work with you a little.
Do the same thing with your credit card company. They want to collect on the debt you owe them, so if that means lowering your APR by a percentage point or two, they’re more willing to help you out.
Related Reading: Quick and Easy Ways To Save Money
Digital
As our devices become more and more embedded in our way of life, we accumulate various types of accounts. Email, social media, and the like; this leads to endless different amounts of information that can be used against you. Time to purge (not like the movie).
- Destroy or recycle old devices – This will clear up space that can be better used by something else. Make sure you wipe the device before recycling it.
- Change passwords – Complex passwords are vital in our data-driven society. Long passwords with numbers and special characters must be used to protect your data.
- Remove old accounts. Social media, email, and apps that you no longer use can be deleted and removed. Make sure that you delete the data from those accounts before you remove them, however. Just in case the owners of the site/app/program use the data from those apps for their personal gain.
- Make sure your devices are up to date – This is elementary data protection. Up to date devices have patches for bugs and possible holes in their system. Your operating system is your first line of defense.
Keeping your life organized and performing a regular review/audit is imperative, whether we’re talking about your digital or financial life.
Related Reading:
Top Technology Trends That Will Dominate The Banking Industry
Three Ways To Cut Business Expenses
Jacob Sensible is a financial advisor with decades of experience in the financial planning industry. His journey into finance began out of necessity, stepping up to support his grandfather during a health crisis. This period not only grounded him in the essentials of stock analysis, investment strategies, and the critical roles of insurance and trusts in asset preservation but also instilled a comprehensive understanding of financial markets and wealth management. Jacob can be reached at: jake.sensiba@mygfpartner.com.
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