Time for Financial ‘Spring Cleaning’
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor Caleb Bowman
Now that we’ve put winter behind us—at least on the calendar—it’s time for us to think about sprucing up our homes, inside and out. But it also may be time to do some financial spring cleaning.
Some of the same ideas involved in tidying up your home can also be used to help put your financial house in order. Here are a few suggestions:
• Dust off your investment strategy. As you look around your home, you might find that many items—tables, desks, bookshelves, and computer and television screens—could benefit from a good dusting. And, once you’ve accomplished this, you’ll get a clearer view of all these objects. Similarly, your investment strategy needs to be “dusted off” every so often, so you can see if it’s still working to help you move toward your financial goals, such as a comfortable retirement. Over time, your personal circumstances and risk tolerance can change, and these changes may lead you to reexamine your future financial and investment decisions.
• Declutter your portfolio. If you took a survey of your home, would you find duplicates or even triplicates of some things—brooms, vacuum cleaners, toasters, and so on? If so, it may be time to do some decluttering. And the same could be true of your portfolio—you might have several identical, or substantially identical, investments taking up space. If so, you might want to replace these redundancies with investments that can improve your diversification. While diversification can’t guarantee profits or protect against losses in a declining market, it may help reduce the impact of market volatility on your holdings.
• Get organized. If your closets are overstuffed, with clothes and miscellaneous items crammed on shelves and the floor, you may well have trouble finding what you’re looking for—both with a little straightening up, your searches will become much easier. And when you’re trying to locate financial documents, such as investment statements or insurance policies, you’ll also benefit from having everything organized in one central location. Even if you get most of these documents online, you can save what you need and keep them in a file on your desktop, laptop or tablet. (And it’s also a good idea to tell your spouse, adult child or another close relative how these documents can be accessed, just in case something happens to you.)
• Protect yourself from dangers. If you look around your garage, shed or other storage area, you may well find some objects—such as gardening tools, paint thinners, engine fluids and leaning ladders—that could be dangerous if they aren’t stored properly. As part of your spring cleaning, you’ll want to remove these hazards to safeguard yourself and your family. But have you addressed the various financial risks that could threaten your loved ones? For example, if something were to happen to you, could your family members maintain their lifestyle? Could your children still go to college? To guard against this risk, you may want to discuss protection strategies with a financial professional.
Spring cleaning can pay off—in a cleaner, safer home environment and in helping ensure your financial strategy continues to work hard for you.