February’s Financial To-Dos

February’s Financial To-Dos

Inspired by Morningstar’s Financial To-Do List, we’re offering a few tasks each month for tackling what can seem like an overwhelming project: getting or keeping your financial house in order.

By focusing on just a few tasks at a time, a seemingly impossible battle can be won. Choose one or more of the following things to get done this month.

Review investment strategy

If it’s been awhile since you last checked in with your investment strategy, February is a great time to take stock again. Reviewing strategy is much more than simply looking at portfolio performance; you should examine your accounts at several levels:

  • Do I have the right asset allocation for my long-term goals?
  • Am I diversified appropriately across asset classes, sectors, countries, and risk types?
  • Are my assets located across the right type of accounts to minimize tax impact?
  • Am I holding any investments now that I wouldn’t repurchase if starting over today?
  • Are there any assets I should sell now for shorter-term goals, such as lifestyle spending or major purchases?

Gather tax documents

Now is a great time to make sure you have all your tax documents in order for spring filing. You should have received 1099s, W-2s, and nonprofit contribution receipts for last year. Review these to make sure they are correct before delivering to your CPA or storing them for easy access if filing returns yourself.

Compare savings interest rates

Interest rates have been so low for so long, that many savers have completely ignored the amount of interest their cash accounts receive. But even though the rates are low compared to historical numbers, opportunities for higher interest rates are available. Review your cash reserve and emergency fund accounts to make sure you’re earning at least 1.0% for your balances. Sites like www.NerdWallet.com and www.BankRate.com can help you locate the best rates available online, or call banks in your area to find brick-and-mortar options.

We’ve also recently written about maximizing interest rates on your cash reserves, which can be read here: Where To Park Your Emergency Fund.

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