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Todd Villarrubia

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Spring Cleaning the Business of Your Life

Posted On: June 26, 2024

By: Todd Villarrubia

Todd M. Villarrubia, an authority in wealth planning and preservation, brings over 30 years of in-depth, experience to the complex challenges of safeguarding familial and individual wealth. Based in New Orleans, Louisiana, his expertise is not only recognized in the local community but also reverberates within the legal industry.
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Spring can be a good time to organize your financial life—right up there with summer, fall and winter.

There’s no bad season for spring cleaning—although most of us tend to feel the need to get things in order when spring arrives. What should be on your list? The article “7 spring cleaning and other annual steps to get your financial life in good shape” from AZ Central gives some valuable suggestions.

Address the paper problem. Piles of paper bills, statements and other documents can easily become overwhelming. Streamline your paperwork by organizing files better and reducing what you keep. For instance, keep one end-of-year statement from your bank and investment accounts if you still get paper statements. Even the IRS is doing it—recommending keeping only three years of income tax returns on hand.

Do you need so many different accounts? If you’ve got credit cards you don’t use, do you need to have them? Don’t close the accounts if you’re about to take out a loan, as the activity could affect your credit score. However, if you can, do your spring cleaning and get rid of any excess cards. Visit big credit reporting companies to learn how to close the accounts without creating a financial hiccup.

Is it time for an annual portfolio review, too? Set up a meeting with your financial advisor to review your accounts once a year to be sure they are properly balanced. The old 60% stocks/40% bonds ratio is being challenged by many. However, it may be your best option, protecting you from downturns in the market while still having some investments poised to benefit from upswings. One asset management company’s analysis says the traditional 60/40 mix could have generated a 9.3% average annual return in a portfolio first started in 1950.

Check what you’re paying in fees and other expenses. This may take some digging, but you may be (unpleasantly) surprised at what you find. How much are you spending on fees on mutual funds or exchange-trading funds? If the amount you’re paying in fees is the same or more than you’re earning, you’re losing money. You can’t control the market, but you can manage fees and expenses.

Update or create your estate plan. This is key in spring cleaning the business of your life. If you don’t have an estate plan and have minor children, make an appointment with an experienced estate planning attorney as soon as possible. Wills are used to name guardians for children. Without a will, the court will decide who should raise your children. Your will is also used to name an executor who administers your estate after you pass. It can be your spouse, partner, or whoever you feel would be best suited. Without a will, a court-appointed administrator will be named. Be careful about online wills, which can create more problems than they solve. If the will doesn’t comply with your state laws or isn’t executed properly, the court could deem it invalid.

Check beneficiary designations. Beneficiary designations are used for life insurance policies, retirement, and investment accounts, some bank accounts and other assets. The person named your beneficiary will receive the asset when you die, regardless of your will. Beneficiary designations supersede any will instructions, so ensure that they are up to date.

Taking care of these matters isn’t as much fun as planting a garden or planning your summer vacation. However, doing a spring cleaning for the business aspect of your life ensures it is well cared for and will give you peace of mind so you can relax and enjoy the coming season.

Reference: AZ Central (May 19, 2024) “7 spring cleaning and other annual steps to get your financial life in good shape”

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