When the brighter days of spring reveal the dust around the house, it’s also a great time to take a closer look at your finances. A yearly financial “spring cleaning” helps ensure your spending, savings, and investment plans are still aligned with your goals.
Your financial spring cleaning should include both simple reviews of spending activities and more strategic discussions around tax planning and investment strategy. Your financial advisor can be an invaluable guide through this process, so here are a few ideas to get started.
Cash flow
Everyone should have a clear idea of what their monthly cash flow looks like. It is the starting point for everything financial, from saving and investing to debt repayment and vacation planning. Whether you use financial planning software, budgeting apps, or simply track it on a spreadsheet, your cash flow model will usually come down to four areas:
- Monthly income from all sources after tax
- Fixed monthly expenses like rent, mortgage, insurance, and utilities
- Variable or discretionary expenses such as dining, travel, and entertainment
- Your regular investment or savings contributions
Use the spring season to go line by line through these items. For most households there are only 30–40 regular expenses, so it’s not as overwhelming as it sounds. If some expenses have increased, update them. If there are services you rarely use such as subscriptions, streaming platforms, or memberships, it may be time to reconsider whether they’re still worthwhile.
A cash flow model isn’t meant to be a strict budget, but it is a powerful guide to understanding how much you need to support your lifestyle and what you have left to save and invest each month. Most importantly, make sure your long-term investment contributions are included and prioritized. Paying yourself first remains one of the most effective financial habits.
Asset allocation plan
For long-term investors, the asset allocation plan is the roadmap to achieving long-term financial goals such as retirement. It is one of the few aspects of investing that investors and advisors can directly control.
Together with your advisor, review your current plan and assess whether any adjustments may be appropriate. In many cases, changes will be incremental, trimming areas where profits have run and adding to areas where market conditions have created opportunities.
Your wealth advisor may also provide insight on broader economic and market conditions that could influence planning positioning. Spring can be a useful reminder to revisit these discussions and ensure your investment strategy still reflects your goals and time horizon.
Another important part of this review is making sure you are taking full advantage of tax-efficient investment accounts available to Canadians. For many investors, this includes the TFSA and RRSP.
Think of the TFSA as a long-term tax-free growth account, where investment gains and withdrawals are not taxed.
The RRSP, on the other hand, allows contributions to be tax-deductible today while creating income during retirement when withdrawals are made.
In recent years, Canadians may also consider the First Home Savings Account (FHSA) if saving toward a first home, as it combines the tax deduction benefits of an RRSP with the tax-free withdrawal benefits of a TFSA.
Checking contribution limits each spring can help ensure you are making the most of these opportunities.
Total Net Worth (TNW) Tally
Your Total Net Worth (TNW) statement is to you what a balance sheet is to a company, a clear snapshot of your financial position. It lists all of your financial assets and liabilities and calculates your net financial worth.
Tracking your net worth over time can provide valuable insight into whether you are accumulating wealth, maintaining stability, or simply treading water financially.
Many mark-to-market assets, such as investment portfolios, can easily be updated. Other assets such as vehicles, real estate, or private investments may need to be revisited periodically to keep valuations realistic. The goal is not precision down to the dollar, but a reasonable estimate that reflects your true financial position.
A well-maintained net worth statement can also be useful when applying for credit or determining eligibility for certain investment opportunities.
List of accounts
We have all heard the expression “less is more,” and this can also apply to financial accounts. Managing too many accounts across different platforms can create unnecessary complexity and administrative costs.
Use your spring review as an opportunity to consolidate accounts where appropriate and create a clearer overview of your finances. Many financial institutions and advisor platforms now offer secure dashboards that allow you to view multiple accounts in one place.
This can make it easier to monitor your overall investment allocation, track progress toward financial goals, and make informed decisions alongside your advisor. Consolidation can also simplify transfers, reduce administrative fees, and eliminate the need to manage multiple logins and passwords.
Digital Financial Check-Up
Today’s finances extend beyond bank accounts and investment portfolios. Many people now have multiple subscriptions, digital payment tools, and online financial platforms.
A quick annual review can help ensure everything remains secure and efficient.
Consider reviewing:
• Recurring subscriptions and automatic charges
• Beneficiary designations on investment and insurance accounts
• Credit reports and fraud alerts
• Password security and two-factor authentication on financial accounts
Small improvements in these areas can help prevent problems and reduce unnecessary spending.
If you have questions about any of these steps, your wealth advisor can help review your financial plan and identify opportunities to keep you on track. Reach out to us anytime.
