With spring officially underway, April is a great time to get outside, tackle your spring cleaning, and revisit some financial basics (it is Financial Literacy Month, after all). These five tasks will not only help you better manage your money, but they’ll also help you work toward your future financial goals. Here are five ways to improve your finances in April.
Review your budget
Some financial tasks only need to be addressed once in a while, like filing your taxes. But there are others that you’ll want to attend to more frequently. Keeping tabs on your budget is one of them.
When you review your budget on a regular basis, you’re able to get a better sense of where your money is going. You’re also able to make real-time adjustments based on your needs and habits. Let's say you started off 2022 by earmarking $300 for entertainment, and $400 for dining out as part of your monthly budget. Since then, you’ve noticed you only spend $150 on entertainment, but $450 on dining out each month. Had you not checked in, you may not have realized that you had an extra $100 that could be put into savings or toward another goal. The better you get to know your budget, the easier it will be to find one that works for you and stick to it.
Prioritize saving for retirement
While retirement may be many years down the road for you, older you will thank current you for starting to save for it sooner rather than later. Because the earlier you start to save, the more time that money has to grow, thanks to what’s known as compound interest.
While every little bit you can save counts, it’s also a good idea to periodically evaluate if you can afford to save a little more and increase the amount when you can (remember that extra $25?) Whenever you get a raise or bonus, see if you can get into the habit of using the extra windfall to boost your contributions, even if it’s just by 1 percent.
Check your life insurance coverage
Life is unpredictable and there’s no way to plan for all of it. But if you have loved ones who depend on you, it’s important to have insurance in place. With life insurance, you’ll ensure your family is protected, and depending on the type of life insurance you get, your policy may also provide value that you can use throughout your life.
If you already have a policy in place, take some time to review if you have enough coverage — big milestones like getting married, having a child, buying a home or starting a business are all reasons to consider increasing your level of coverage.
Take stock of your debt
Just like it’s smart to keep regular tabs on your budget, you’ll also want to manage any debt you may be carrying.
Managing your debt can be a bit intimating, but when you have a good grasp on just how much you owe, you’ll have an easier time figuring out next steps. Start by writing out each of your debts, including the total amount, monthly minimum payments, and the interest rate. From there, you’ll want to prioritize — typically you’ll want to focus on the debt with the highest interest rate first (oftentimes credit card debt).
Keep taxes top of mind
Hopefully you’ve already wrapped up your taxes for the year (if not, move this task to the top of your to-do list, as Tax Day is April 18).
As you wait for your refund (if you haven’t already received it), it’s not too early to start thinking about next filing season. That might include starting to make your 2022 IRA contributions (you can contribute up to $6,000 if you’re 50 or younger until April 15, 2023). Or, if you recently experienced a change that will affect your income tax withholding, look into updating your W-4 form now while it’s top of mind, so you don’t run the risk of facing an unexpectedly large tax bill next year.