Spring Cleaning for Your Finances: Five Easy Steps

by Landon W. Buzzerd, CFP

April 15, 2025

As the warm spring weather approaches, many people will engage in annual spring cleaning. That may include planting flowers, cleaning areas of the house that are often neglected, or digging out clothing and household items that have been packed away for months. However, spring cleaning should also involve your finances. Planting seeds for future growth, tidying up your budget, and revisiting old investment accounts are a few parallels to the usual tasks. Reviewing these items on an annual basis can provide clarity to your overall wealth picture. Here are the top five items to include in your financial spring cleaning:

1. Take Care of Your Taxes

If you have yet to file your taxes, move this item to the top of your list. You can still use this time until the tax deadline to make IRA contributions for 2024. Alternatively, if you have completed your taxes and were caught off guard by the amount you owed or were refunded, review your W-4 form to adjust your tax withholdings and avoid any surprises next year. Many people enjoy receiving a refund, but this is actually the equivalent of providing the IRS with an interest-free loan. They were able to keep your earnings and pay them back to you later. If you're self-employed or have side income, taxes are not withheld from your pay as they are with W-2 income. Consider setting aside an appropriate percentage of your self-employment earning for taxes to avoid having to dip into your emergency fund to pay your tax bill.

2. Consolidate Investment Accounts

If you have ever made a career change, you may have had a retirement plan with your previous employer that you were unsure how to handle. Many ex-employees leave their retirement plan with their previous employer because it’s easy to do so and they don’t know the options available to them. This results in an account that is often ignored, not rebalanced, and almost certainly not integrated into your overall strategy as an investor. Additionally, it requires keeping track of yet another statement or login to check the current balance instead of being incorporated with other investment accounts you may have. Consolidating those old retirement plans should be at the top of your to-do list, and you may be able to merge your old retirement plans into an existing IRA. Some advisors may even be able to incorporate your current workplace retirement plan into your overall investment strategy. In most cases, a 401k or 403b you're currently contributing to is your largest investment asset and with our holistic approach at Grant Street, we can link this account to help monitor and report on positioning while managing the portfolio. Working with an experienced wealth advisory team to accomplish this consolidation effort can help simplify your overall financial picture.  

3. Update/Create a Budget

Understanding where your money is going is the first step in managing it. There are various apps available that make creating a budget very easy, but a simple spreadsheet also works just fine. Take note of how income and expenses have changed since you last visited your budget and determine where revisions may be necessary. Remember to pay yourself first. Establishing automatic deposits to your savings and investment accounts can help you stay disciplined in your wealth building journey. We recommend saving at least 15% of your gross income across retirement, taxable, and savings accounts. This amount could be higher if you are anticipating a large purchase in the near future, such as a home. Contribution limits for 2025 have increased for most types of retirement plans.  For example, the maximum employee contribution for a 401(k) this year is $23,500. If you are age 50 or older, you are eligible to contribute an additional $7,500 for a total contribution of $31,000. New to 2025, the super-catch-up allows those ages 60-63 to contribute $11,250 instead of just $7,500, for a total contribution of $34,750. If you have not updated your 401(k) contributions yet, be sure to check that your current contribution rate aligns with your goals. If your employer offers a match, you should contribute at least enough to maximize that benefit.

 4. Revisit Your Emergency Fund

After you have addressed your new budget and determined your overall expenses, including your savings goals, you should revisit your emergency cash stash. The purpose of an emergency fund is to provide a safety net, or buffer, that will protect you from unexpected costs and prevent the impulse to take on additional debt in a pinch. A rule of thumb for this fund is 3-6 months' worth of essential living expenses, which includes housing, utilities, groceries, transportation, and outstanding debt repayments. Your emergency fund should be in a checking account or even a high-yield savings account, so it is easily accessible and not subject to market fluctuations.

5. Review Your Debt Repayment Plan

If you are in a situation where you need to tap into your emergency fund to supplement your living expenses, ensure you can at least make the minimum required payment on those loans. This will help you avoid late fees and penalties, while keeping your credit score intact. However, if you have additional income beyond your expenses and you are trying to determine the best place for that surplus cash, consider the interest rate on your debt versus what you may be able to earn elsewhere such as stocks or bonds. For example, if you are currently paying extra toward your monthly mortgage, which may have a rate below 4%, it may be prudent to invest that surplus into stocks to potentially earn a greater return on those additional funds. While reviewing the interest rates on various sources of debt (mortgage, auto, student loans, etc.), research current market interest rates to determine if you would benefit from refinancing those loans. You may even be able to consolidate your debt into one loan.

For over 32 years, Grant Street has served as a strategic wealth advisory partner to clients across the country. By taking the time to understand each client’s unique needs and aspirations, we customize personalized strategies that align with their long-term vision. Whether it's saving for retirement, purchasing a home, or managing debt, the key is to guide clients through every step of their financial journey with the right tools, resources, and support. At Grant Street, our goal is to empower our clients to make informed decisions, stay focused, and ultimately achieve financial success and peace of mind.