To get financially whole and organize your money life, we canvassed finance and investment experts to uncover the top priorities when undertaking that spring cleaning: Open a Roth IRA. John-Paul Valdez, a personal finance expert at Pearl.com and a former finance radio talk show host, advises opening a Roth IRA account (or converting a traditional IRA to a Roth IRA) to set up yourself and your heirs for a sound financial future. "A Roth offers many options later in life -- it will allow you to make after-tax contributions, and your earnings will grow tax free," he says. "You will also be able to make withdrawals tax free, during retirement, for example -- and unlike with traditional IRAs, you will not be required to make annual withdrawals after you turn 70.5 years old." "Essentially, this move will help you pay as little income tax as possible in the future," he says. "And if you plan on leaving money to your heirs, the Roth account will give you many more options on when and how much you take in distributions from the account according to your needs." Realign and "insure" your investment portfolio. Tim Biggam, chief market strategist at MoneyBlock, says a financial spring cleaning should drill down to two aspects: readjusting and rebalancing portfolios after large run-ups in prices; and buying puts as downside protection to your 401(k)s or portfolios.
"Given that the stock market is at all-time highs and the S&P 500 is almost there, this spring is not a bad time to take a look at trimming out of some winners at these levels to readjust allocations," he says. "This has been shown to be a proven strategy for minimizing volatility over the long term, as stocks tend to be mean reverting."
Slash expenses, especially the small ones. Howard Dvorkin, CPA and founder of the nonprofit ConsolidatedCredit.org, advises cutting small expenses. "It's crucial to understand that small purchases add up over time," he says. "Eliminating the morning coffee or bottled water from consumers' monthly budgets can save individuals hundreds in a year. Saving loose change and bringing lunch to work are also great strategies consumers can implement to reduce spending." Taking a once-a-year look at your personal financial situation is a no-brainer (actually, most financial advisers want clients to check on their finances on a quarterly, or a semi-annual basis).