Life’s cycles are wonderful & mysterious. Throughout each season we experience the changes that the earth brings us in all its wonderment & splendor. With great expectation we prepare our households. Gathering and storing throughout the fall to prepare for the winter. Clearing and planting in preparation for the spring & summer. The understanding of these events will determine our mode of preparation for them.Spring is a time of renewal. As we clear the clutter in our home we should also clear the clutter in our financial lives. With tax season fast approaching, this is the opportune time to review & organize all records. Set up categories for all your expenditures & file your receipts based on these categories in a tickler file. The best approach is to automate your process. There are various programs, such as Quicken, Peachtree, & Microsoft Accounting, which are very user friendly and require minimum to no accounting knowledge. To manage the input of your receipts even further, utilize software for expense management such as Neat Receipts. This product will streamline the entire process and is easily integrated with other programs. Another important financial area to review would be insurance policies & retirement accounts. For your homeowner’s /renter’s policy, spring is a good time to take inventory, especially after the Christmas holiday purchases. If your policy does not provide a manual inventory spreadsheet, create one in Excel. It’s a good idea to update your inventory sheet quarterly, to cover purchases made throughout the year. Let’s not forget auto insurance. With summer fast approaching, this is the time to consider major repairs, in preparation for summer travel. Check your policy to make sure you have adequate coverage. If your vehicle is financed and will be paid off this year, you may consider changing from full coverage to only liability coverage. Consider factors such as the overall condition of your vehicle, listed drivers, & total mileage. A change in your premium could have a significant impact on your monthly budget. As for your retirement investments, the best practice is to review your investments monthly for performance, but try not to make changes to your portfolio more than on a quarterly basis. However, expect an annual review from your insurance agent or financial advisor. As experts in their fields, your Advisor will determine the best possible balance of securities in their corresponding industries. Your investment style & history, which is generally gathered prior to you initiating the account, is the basis of all decisions made by your Investment Advisor. A good Advisor will operate under your discretion and comfort level.What about your taxes? Because this subject can be very expansive, I will only mention briefly some important points to help you manage the “mayhem” during this period. Most people operate under the mindset to file their taxes in a manner to produce the largest refund. This is not necessarily a good idea. Don’t depend on your tax refund to cover living expenses. That’s what a savings account is for. The IRS does not pay you interest for the money it refunds to you. Technically, you are giving the IRS an interest free loan throughout the year. Wouldn’t you rather have those funds available to use at your discretion? Maintaining an effective budget will help to alleviate the stress of unwelcomed financial disasters. So, here are some simple guidelines to follow that can minimize your refund. Monitor your exemptions claimed on your W-4. The more exemptions you claim, the less taxes your pay into the system, and vise versa. If you decide to claim more than required exemptions for your situation, only do it for 6 months. Therefore, every six months you should be reviewing your W-4 exemptions. This may help to level the playing field a little. Also, be sure to maximize your deductions & tax credits. Most people miss out on common items such as educational deductions, capital losses on investments, retirement contributions, etc. The best way to gain a little knowledge and insight into taxes is to purchase a tax manual from your local book store, such as the “Dummies” series. These guides are an easy read, and clearly break down all categories of deductions & tax credits possibly available.Well, now that we’ve cleaned out the ember s of our attics, let’s get to work on our financial success!
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