Spring Refresh for Finances, Budget, Invest, and Plan Smarter

If you are already in spring-cleaning mode, your finances might be the next thing that could use a refresh. Spring is a great opportunity to take the time to tidy up your finances and optimize them to have better money management, increased tax savings, and a more secure plan for the future. Here are a few steps to get started:

A budget is your financial blueprint - it helps you understand where your money is going and ensures you’re on track to meet your goals. Begin by reviewing your sources of income and tracking your expenses. We recommend taking one month to track every expense and see if your current budget needs to be adjusted at all based on that spending. Once you have done this, it allows you to cut any unnecessary expenses or evaluate areas where you have overspent.

As life evolves, so do your financial priorities. Determining a sustainable budget allows you to reallocate any unused funds toward different goals, whether it’s saving for a vacation, investing more toward retirement, or paying down debt. Setting clear and realistic goals for you and your family will help keep you motivated and focused throughout the year.

Investment accounts can often get overlooked as life gets busy, especially if you’ve set them up years ago. There are a few questions you should ask yourself as you evaluate your investments:

Are my investments still aligned with my goals and risk tolerance?
Maybe you’ve changed jobs, got married, started a family, or are looking to retire. It’s important to ensure your investment accounts align with your current goals and make adjustments if needed. This often begins with making sure you have the right asset allocation mix between stocks that offer more long-term growth and bonds that provide stability during market volatility.
Are my investments well diversified?
Diversification ensures you have a mix across various asset classes, industries, and geographies to reduce risk and volatility. There are times when large-cap stocks outperform small-cap stocks, or times when international stocks outperform domestic stocks. By having a diversified portfolio, you are able to take advantage of the areas of the market that have outperformed and limit the exposure to the areas that have underperformed. In addition, over time, some of your investments may have grown more than others, leading to an unbalanced portfolio.
What are my fees inside my investment account?
Some accounts (or funds inside the account) have higher management fees that eat into your returns. If you find fees that seem too high, consider moving to more cost-effective funds or investment options. At Straight Path, we believe in full transparency when it comes to fees. You’ve worked hard to save your money, and you deserve to know exactly what you’re paying within your account.

A solid financial plan acts as your roadmap to ensure you are on track for retirement while also looking for hidden opportunities to save taxes both now and in the future. There are a few questions to think about as you consider taxes and your financial plan.

Am I still contributing to the right type of accounts?
When saving inside retirement accounts, you often have the option of contributing pre-tax (traditional 401ks and IRAs) vs. after-tax (Roth 401ks and Roth IRAs). Whether you should take the tax deduction or pay the taxes now depends on your income now compared to your expected income in retirement. As your income changes, you should be re-evaluating what vehicle you are saving inside to make sure you are making the most tax-efficient decision.

When was the last time I reviewed my financial plan?
Your retirement goals may shift over time, so it’s important to evaluate them regularly to make sure they’re still in alignment with your current life circumstances. When do you want to retire? How much money do I want to spend in retirement? Do I need to be saving more now to reach my goals for retirement? These are all questions that can be answered by reviewing your financial plan.

Am I maximizing both current and future tax savings in retirement?
If you are currently in retirement, make sure your withdrawal strategy out of your accounts is set up to minimize your tax bill. There are 3 different types of taxation depending on what type of account you are taking withdrawals from - ordinary income, capital gains, and tax-free income sources. The order and amount you should pull from each account vary based on your situation. At Straight Path we do proactive tax planning to strategically lower your overall income tax liability both now and in the future.

Spring cleaning for your finances doesn’t have to be overwhelming. Small, intentional steps—like reviewing your budget, tidying up your investment accounts, and refreshing your financial plan—can put you on the right path toward long-term financial success. If you have questions or need guidance, Straight Path is here to help you make informed decisions and uncover tax-saving opportunities. Schedule an introductory call with one of our advisors today to take the next step toward a more secure financial future.

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