Ready for spring cleaning? Your budget and financial goals could use a good scrubbing

Spring is here, the time of awakening and starting fresh. It’s the reason we also start to think about spring cleaning. This could mean tidying a garage that was stuffed with all the yard items from last summer or scrubbing areas of our house we often ignore. But now would also be a great time to think about spring cleaning your finances.

Are you ready to rethink some budget items, get your affairs in order and start fresh for the rest of the year and beyond with a spruced up financial focus?

Starting with one of the obvious financial chores we sweep under the run, spring brings about tax season.

If you’re going to be looking at a potential refund, you’ll want to determine the best place to invest those funds. Is your emergency fund fully funded? Are you facing any debt? Maybe you always add refunds to your IRA or maybe you look at goals or pre-planned expenses you’re behind in funding.

Having a plan in place can be helpful when receiving any large amount, whether it’s a refund, bonus or inheritance.

Another thing to consider is making estimated federal income tax payments. While traditional workers often have this handled by their employer, self-employed workers or those with outside income might need this option. If you have a new venture that meets this situation or if you were penalized last year for underpayments, you’ll want to have your tax affairs in order moving forward.

One last thing: How easy was tax preparation for you this past year? Were you scrambling for receipts, calculating things into the wee hours before deadlines? If it didn’t go smoothly, now is the time to develop a new system for next year.

OK, now let’s get some bins ready to organize your budget.

How has your budget been working for you this past year? Are you sticking to it or did it become a jumbled mess? Are you saving enough in the accounts you earmarked to fund your future goals, or do you feel like your savings needs to ramp up?

If you don’t have a budget or it’s gotten out of hand, start by using a method for viewing and updating your budget. The right method is always the one that works for you.

Next take a look at the categories where you’ve been spending within your budget and those where you’ve been spending outside of your budgeted amount. What are some actions you can take to clean up those areas of overspending? This doesn’t always mean tightening up in those areas. You could have the budget for certain categories set too low and others too high so sometimes just adjusting the buckets can help you stay on track.

Take a look at bills you pay monthly, including property casualty insurance, lawn services or life insurance. Some might offer discounts if you pay them annually rather than splitting it up into monthly payments. If your budget allows you can take advantage of these discount opportunities (perhaps with your tax refund).

You might also dedicate time for reviewing your home mortgage escrow to make sure you’re adding enough to keep up with the increase in property taxes tied to the value of the home (which has also been increasing over the last few years).

Now let’s discuss an actual spring cleaning consideration: patio furniture.

have heard time and again that people don’t realize how much of an investment outdoor furniture is, and that it can cost thousands of dollars. This is the time to consider pre-funding major purchases. Not only could this tip help if patio furniture is in your future, but it could help you with any goal.

Perhaps you’re thinking bigger, like a brand new patio or adding a screened-in porch to your home. Start by determining an estimated cost of the project or item, then divide the cost by the number of months before you need to make the purchase. That is the number you need to save every month in order to avoid using debt for whatever it is you want to buy. For example, if I want new patio furniture by April of 2024 and the cost will be $3,000, I’ll save $250 per month until I make that purchase.

Just as spring cleaning the tiniest area of your home can feel like a huge personal success, spring cleaning any piece of your financial plan can also feel like a big win. I encourage you to start somewhere, even if you just pick one piece to tidy up this spring.

Marc C. Shaffer is a CERTIFIED FINANCIAL PLANNER professional and member of the Financial Planning Association of Greater Kansas City. Shaffer is the chief financial officer of Searcy Financial Services Inc., a fee-only registered investment advisory and financial planning firm located in Overland Park.